Diversified Energy Company ("Diversified", "DEC", or the "Company") (NYSE: DEC, LSE: DEC) is pleased to announce its financial and operational results for the three months ended March 31, 2026.

First Quarter and Recent Highlights

   -- Camino Natural Resources Acquisition: Innovative Carlyle acquisition 
      financing structure utilized for joint acquisition of $1.175B Oklahoma 
      asset, further expanding the Company's leading Oklahoma operations 
 
   -- Closing of Sheridan Acquisition: Acquisition closed on April 30th, adding 
      62 MMcfepd of production and $52M of NTM EBITDA contiguous to our 
      portfolio of assets in East Texas 
 
   -- Shareholder Returns: Returned $94M to shareholders in 1Q26, including 
      $72M in share repurchases in conjunction with the full exit of EIG, the 
      former primary owner of Maverick Natural Resources 
 
   -- Portfolio Optimization:  Recorded over $100M in proceeds from 
      optimization activities in 1Q26, further extending the Company's ability 
      to generate material free cash flow from its extensive portfolio of 
      assets 
 
   -- Expanded Non-Op Portfolio: Expanded to three non-op partnerships with 
      leading operators, including Mewbourne (Anadarko Basin) and Continental 
      Resources (Permian Basin), positioning the Company to increase future 
      production and reserves from highly profitable new wells 

First Quarter 2026 Results

   -- Average production: 1,198 MMcfepd (200 Mboepd) 
 
   -- Production exit rate(a): 1,228 MMcfepd (205 Mboepd) 
 
   -- Total Commodity Revenue: $556M 
 
   -- Net Loss: $161M, inclusive of $398M loss on non-cash unsettled 
      derivatives 
 
   -- Adjusted EBITDA(b): $287M 
 
   -- Operating Cash Flow: $169M 
 
   -- Adjusted Free Cash Flow(c): $160M after $11M of transaction costs 
 
   -- Capital Expenditures: $58M 

Rusty Hutson, Jr., CEO of Diversified, commented:

"We are off to a terrific start in our 25(th) year of business. In this year of celebration and reflection of our history, I am very pleased that our teams started 2026 by delivering another strong quarterly performance, and were able to produce year-over year adjusted free cash flow growth of 157%, while managing through a quarter that saw Winter Storm Fern and the war in Iran creating challenging operating conditions and nearly unprecedented commodity price volatility. Importantly, the robust cash flow generated by reliable production of our assets allowed us to further strengthen the balance sheet through $92 million of systematic debt reduction, returned $94 million to shareholders through a combination of dividends and share repurchases, and deployed capital into two strategic acquisitions.

Looking ahead, I am incredibly excited about the future of Diversified Energy. With the Sheridan acquisition recently closed and the innovatively structured Camino acquisition, with our partners at The Carlyle Group, expected to close in the third quarter, we are once again transforming our platform and enhancing our long--term positioning as the leading consolidator of cash-generating energy assets in the US. On a pro forma basis, these transactions increase our cash flow and expand our vast acreage position, creating significant optionality within our portfolio optimization program. Our scale positions Diversified to benefit from powerful, long--term demand drivers, including power generation, data center growth, LNG exports, and the continued importance of U.S. energy production amid global geopolitical uncertainty. As the largest individual shareholder in Diversified Energy, I believe our differentiated and proven business model, expanded footprint, culture of focused execution, and our ability to generate consistent free cash flow position us better than ever before to capitalize on these trends and drive sustainable, long--term shareholder value."

 
                      Financial and Operational Metrics 
 
                                    Three Months Ended 
             March 31,   March 31,                   December 
                2026        2025     1Q/1Q % Change  31, 2025   1Q/4Q % Change 
                         ----------  --------------  ---------  -------------- 
Production 
 (Mmcfe/d)        1,198         864             39%      1,198              0% 
Production 
volume mix 
  Natural 
   gas              71%         82%                        72% 
  NGLs              14%         12%                        14% 
  Oil               15%          6%                        14% 
Total 
 Commodity 
 Revenue 
 (millions)        $556        $329             69%       $429             30% 
Net Income 
 (Loss) 
 (millions)      $(161)      $(323)             50%       $196          (182)% 
Adj. 
 EBITDA(b) 
 (millions)        $287        $138            108%       $254             13% 
Adj. Free 
 Cash 
 Flow(c) 
 (millions)        $160         $62            157%       $130             23% 
 
 

Financial Strength and Shareholder Returns

   -- Liquidity: $529M of credit facility availability and unrestricted cash as 
      of March 31, 2026 
 
   -- ABS principal reduction: Retired $92M in outstanding debt under certain 
      ABS notes 
 
   -- Leverage ratio(d): 2.2x as of March 31, 2026; 
 
          -- Consolidated debt consists of 72% in deleveraging non-recourse 
             ABS notes 
 
   -- 1Q26 dividend: $0.29 per share declared 

Strategic Execution and Transformational Growth

Camino Natural Resources: Carlyle Partnership in full-force, with joint acquisition of $1.175B Oklahoma asset

   -- Innovative acquisition financing structure that drives enhanced returns 
      for shareholders and bolsters the continuation of long-term growth 

Non-Op Platform Continues to Provide Additional Lever for Value Generation

   -- Continental Resources Permian Basin joint development program bolsters 
      Non-Op platform alongside Mewbourne JDA in Oklahoma and private operator 
      JDA in the Northwest Shelf 
 
   -- Oklahoma Joint Development Partnership continues to generate an estimated 
      60% IRRs with 135 wells drilled under the JDA in the last 3 years, with 
      160 wells remaining in JDA inventory 
 
   -- Non-Op development efficiently adds incremental production that offsets 
      an estimated 50% of natural decline (2026 estimated avg. 10,800 Boepd) 
      annually across three partnerships 
 
   -- DEC Oklahoma inventory includes 450 economic locations pro forma for 
      Camino 

Unlocking Value Through Portfolio Optimization

   -- Our Portfolio Optimization Program ("POP") realized over $100M from 
      non-core asset and leasehold divestitures 
 
   -- Our POP highlights optionality in DEC's expansive and diverse portfolio 
      to monetize our acreage position via Non-Op Partnerships or leasehold 
      divestitures 
 
   -- Generated $3M of cash flow from environmental credits related to Coal 
      Mine Methane (CMM) in 1Q26 

Operations and Finance Update

First Quarter Production

The Company recorded exit rate production as of March 31, 2026 of 1,228 MMcfepd (205 Mboepd)(a) and delivered average daily production of 1,198 MMcfepd (200 Mboepd) for the three months ended March 31, 2026. The Company's production volume mix was approximately 71% natural gas, 14% natural gas liquids ("NGLs"), and 15% oil, with approximately 66% of production volumes from the Central region and 34% from Appalachia for the three months ended March 31, 2026. Production for the quarter continued to benefit from Diversified's peer-leading, shallow decline profile.

First Quarter Margin and Total Cash Expenses per Unit

For the three months ended March 31, 2026, Diversified delivered per unit revenues of $4.87/Mcfe(e) ($29.22/Boe) and Adjusted EBITDA Margin(b) of 68%. Notably, these per unit metrics reflect an increase in both revenues and expenses from the incorporation of greater liquids production following the 2025 Maverick Natural Resources & Canvas Energy acquisitions. The Company's per unit expenses are anticipated to improve as the Company implements its playbook to achieve long-term, sustainable synergies and cost savings. For example, General and Administrative expenses decreased during the three months ended March 31, 2026 compared to prior period levels, despite the higher per unit costs of Maverick, supporting our progress on cost savings and synergy capture and highlighting our ability to profitability add assets due to our scale and existing capabilities.

 
                                       Three Months Ended 
                    -------------------------------------------------------- 
                     March 31, 2026     March 31, 2025    December 31, 2025 
                    -----------------  -----------------  ------------------ 
                     $/Mcfe    $/Boe    $/Mcfe    $/Boe    $/Mcfe     $/Boe 
------------------  ---------  ------  ---------  ------  ---------  ------- 
  Average realized 
   price(1)         $3.76      $22.56  $3.57      $21.42  $4.08      $ 24.48 
  Other revenue(2) 
   (e)               0.17        1.02   0.19        1.14   0.12         0.72 
  Proceeds from 
   divestitures(3)   0.94        5.64   0.03        0.18   0.15         0.90 
------------------   ----       -----   ----       -----   ----       ------ 
Total revenue and 
 proceeds from 
 divestitures, 
 excluding Next 
 Level Energy(4)    $4.87      $29.22  $3.79      $22.74  $4.35      $ 26.10 
 
  Lease operating 
   expense(5) (e)   $1.19      $ 7.14  $0.91      $ 5.46  $1.12      $  6.72 
  Production taxes   0.28        1.68   0.21        1.26   0.21         1.26 
  Midstream 
   operating 
   expense           0.19        1.14   0.24        1.44   0.18         1.08 
  Transportation 
   expense           0.26        1.56   0.34        2.04   0.22         1.32 
------------------   ----       -----   ----       -----   ----       ------ 
Total operating 
 expense(6)         $1.92      $11.52  $1.70      $10.20  $1.73      $ 10.38 
  Employees, 
   administrative 
   costs and 
   professional 

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May 06, 2026 16:17 ET (20:17 GMT)