Diversified Energy Company (DEC) Q3 2024 TU earnings summary

Executive summary

• Strategic acquisitions totaling $585 million in 2024 expanded production scale, with over 350 MMcfepd of high-margin output added and a focus on low-decline, mature U.S. energy assets for resilient cash flows.

• Vertically integrated operations, in-house well retirement, and environmental credit sales enhance sustainability and stewardship.

• Expanded into coal mine methane capture and signed a fixed-price LNG supply contract, diversifying revenue streams.

• Maintained low corporate decline rates and scaled through acquisitions, supporting consistent free cash flow and shareholder returns.

• On track to retire over 200 wells in 2024, with 165 operated wells retired year-to-date.

Financial highlights

• Q3 2024 average net daily production was 829–830 MMcfepd, with over 50% from the central region.

• Total Q3 revenue was $239 million, with $130 million in year-to-date hedge gains and YTD revenue of $685 million.

• Adjusted EBITDA for Q3 was $115 million (49%–50% margin); free cash flow was $47 million in Q3 and $139 million YTD.

• Net debt as of September 30, 2024, was $1.64 billion; borrowing base reaffirmed at $385 million.

• Net loss of $1 million for Q3 2024, with YTD net income of $15 million.

Outlook and guidance

• On track to deliver 2024 goals, focusing on debt reduction, shareholder returns, and accretive acquisitions.

• Expects further value from undeveloped acreage sales, coal mine methane, and additional production from recent acquisitions.

• 60–80% of natural gas volumes hedged over the next five years, supporting cash flow stability.