Diversified Energy Company (DEC) H2 2025 earnings summary

Executive summary

• Achieved record operational and financial results in 2025, surpassing guidance for Adjusted EBITDA and free cash flow, driven by transformative acquisitions and portfolio optimization.

• Integrated ~$2 billion in accretive acquisitions, including Maverick Natural Resources, Canvas Energy, and announced Sheridan Production Partners deal.

• Marked 25th anniversary with NYSE primary listing, US incorporation, and enhanced access to US capital markets.

• Maintained disciplined capital allocation, systematic debt reduction, and robust shareholder returns.

Financial highlights

• 2025 revenue reached $1.83 billion (up 142% YoY), Adjusted EBITDA $956 million (up 103% YoY, 58% margin), and net income $342 million (up 432% YoY), all exceeding guidance.

• Adjusted free cash flow was $440 million (up 110% YoY), including $55 million in transaction costs.

• Operating cash flow totaled $465 million; capital expenditures were $185 million.

• Net debt at year-end was $2.8 billion, leverage improved by ~23% to 2.3x net debt/EBITDA.

• Liquidity stood at $577 million, supporting ongoing acquisitions and operations.

Outlook and guidance

• 2026 guidance: production 1,170–1,210 MMcfepd, Adjusted EBITDA $925–$975 million, free cash flow ~$430 million, and capital expenditures $135–$155 million.

• Leverage target maintained at 2.0x–2.5x.

• Expects continued operational synergies, portfolio optimization, and strong cash generation.

• Asset sales guidance for 2026 is $100 million, with a normalized run rate of $40–50 million post-2026.

• Non-op partnerships expected to offset about half of net production decline in 2026, with potential for further expansion.