Page | |
2 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Net debt-to-pro forma TTM Adjusted EBITDA | 2.8x | 2.4x | 2.3x |
Adjusted EBITDA margin | 49% | 52% | 52% |
Adjusted operating cost per Mcfe | $1.74 | $1.72 | $1.80 |
Net cash provided by operating activities | $161 million | $173 million | $238 million |
Actual wells retired: | |||
DEC wells retired(a) | 140 | 100 | 122 |
Wells retired by Next LVL | 118 | 87 | 95 |
3 |
Diversified Energy Company PLC Interim Report 2024 |
4 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | ||||
June 30, 2024 | June 30, 2023 | Change | % Change | |
Net production | ||||
Natural gas (MMcf) | 114,409 | 131,868 | (17,459) | (13)% |
NGLs (MBbls) | 2,829 | 2,981 | (152) | (5)% |
Oil (MBbls) | 730 | 738 | (8) | (1)% |
Total production (MMcfe) | 135,763 | 154,182 | (18,419) | (12)% |
Average daily production (MMcfepd) | 746 | 852 | (106) | (12)% |
% Natural gas (Mcfe basis) | 84% | 86% | ||
Average realized sales price | ||||
(excluding impact of derivatives settled in cash) | ||||
Natural gas (Mcf) | $1.83 | $2.54 | $(0.71) | (28)% |
NGLs (Bbls) | 25.07 | 22.53 | 2.54 | 11% |
Oil (Bbls) | 76.97 | 73.57 | 3.40 | 5% |
Total (Mcfe) | $2.48 | $2.96 | $(0.48) | (16)% |
Average realized sales price | ||||
(including impact of derivatives settled in cash) | ||||
Natural gas (Mcf) | $2.58 | $2.96 | $(0.38) | (13)% |
NGLs (Bbls) | 23.82 | 23.39 | 0.43 | 2% |
Oil (Bbls) | 70.49 | 68.44 | 2.05 | 3% |
Total (Mcfe) | $3.05 | $3.31 | $(0.26) | (8)% |
Revenue (in thousands) | ||||
Natural gas | $209,008 | $334,588 | $(125,580) | (38)% |
NGLs | 70,935 | 67,159 | 3,776 | 6% |
Oil | 56,185 | 54,294 | 1,891 | 3% |
Total commodity revenue | $336,128 | $456,041 | $(119,913) | (26)% |
Midstream revenue | 17,416 | 16,662 | 754 | 5% |
Other revenue | 15,130 | 14,602 | 528 | 4% |
Total revenue | $368,674 | $487,305 | $(118,631) | (24)% |
Gain (loss) on derivative settlements | ||||
(in thousands) | ||||
Natural gas | $86,035 | $55,741 | $30,294 | 54% |
NGLs | (3,561) | 2,569 | (6,130) | (239)% |
Oil | (4,725) | (3,785) | (940) | 25% |
Net gain (loss) on derivative settlements(a) | $77,749 | $54,525 | $23,224 | 43% |
Total revenue, inclusive of settled hedges | $446,423 | $541,830 | $(95,407) | (18)% |
5 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | ||||
June 30, 2024 | June 30, 2023 | Change | % Change | |
Per Mcfe metrics | ||||
Average realized sales price | ||||
(including impact of derivatives settled in cash) | $3.05 | $3.31 | $(0.26) | (8)% |
Other revenue | 0.24 | 0.20 | 0.04 | 20% |
LOE | (0.73) | (0.72) | (0.01) | 1% |
Midstream operating expense | (0.26) | (0.22) | (0.04) | 18% |
Employees, administrative costs and professional services | (0.30) | (0.25) | (0.05) | 20% |
Production taxes | (0.15) | (0.20) | 0.05 | (25)% |
Transportation expense | (0.31) | (0.32) | 0.01 | (3)% |
Proceeds received for leasehold sales | 0.05 | 0.04 | 0.01 | 25% |
Adjusted EBITDA per Mcfe | $1.59 | $1.84 | $(0.25) | (14)% |
Adjusted EBITDA margin | 49% | 52% | ||
Other financial metrics (in thousands) | ||||
Adjusted EBITDA | $217,787 | $282,864 | $(65,077) | (23)% |
Operating profit (loss) | $2,391 | $909,656 | $(907,265) | (100)% |
Net income (loss) | $15,745 | $630,932 | $(615,187) | (98)% |
Six Months Ended | ||||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Henry Hub (Mcf) | $2.07 | $2.76 | $(0.69) | (25)% |
Mont Belvieu (Bbls) | 38.58 | 34.28 | 4.30 | 13% |
WTI (Bbls) | 78.76 | 74.96 | 3.80 | 5% |
(In thousands) | Natural Gas | NGLs | Oil | Total |
Commodity revenue for the six months ended June 30, 2023 | $334,588 | $67,159 | $54,294 | $456,041 |
Volume increase (decrease) | (44,346) | (3,425) | (589) | (48,360) |
Price increase (decrease) | (81,234) | 7,201 | 2,480 | (71,553) |
Net increase (decrease) | (125,580) | 3,776 | 1,891 | (119,913) |
Commodity revenue for the six months ended June 30, 2024 | $209,008 | $70,935 | $56,185 | $336,128 |
6 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands, except per unit data) | Six Months Ended June 30, 2024 | |||||||
Natural Gas | NGLs | Oil | Total Commodity | |||||
Revenue | Realized $ | Revenue | Realized $ | Revenue | Realized $ | Revenue | Realized $ | |
Excluding hedge impact | $209,008 | $1.83 | $70,935 | $25.07 | $56,185 | $76.97 | $336,128 | $2.48 |
Commodity hedge impact | 86,035 | 0.75 | (3,561) | (1.25) | (4,725) | (6.48) | 77,749 | 0.57 |
Including hedge impact | $295,043 | $2.58 | $67,374 | $23.82 | $51,460 | $70.49 | $413,877 | $3.05 |
(In thousands, except per unit data) | Six Months Ended June 30, 2023 | |||||||
Natural Gas | NGLs | Oil | Total Commodity | |||||
Revenue | Realized $ | Revenue | Realized $ | Revenue | Realized $ | Revenue | Realized $ | |
Excluding hedge impact | $334,588 | $2.54 | $67,159 | $22.53 | $54,294 | $73.57 | $456,041 | $2.96 |
Commodity hedge impact | 55,741 | 0.42 | 2,569 | 0.86 | (3,785) | (5.13) | 54,525 | 0.35 |
Including hedge impact | $390,329 | $2.96 | $69,728 | $23.39 | $50,509 | $68.44 | $510,566 | $3.31 |
(In thousands, except per unit data) | Six Months Ended | |||||||
Total Change | Per Mcfe Change | |||||||
June 30, 2024 | Per Mcfe | June 30, 2023 | Per Mcfe | $ | % | $ | % | |
LOE(a) | $98,511 | $0.73 | $111,637 | $0.72 | $(13,126) | (12)% | $0.01 | 1% |
Production taxes(b) | 19,993 | 0.15 | 31,307 | 0.20 | (11,314) | (36)% | (0.05) | (25)% |
Midstream operating expense(c) | 35,563 | 0.26 | 34,391 | 0.22 | 1,172 | 3% | 0.04 | 18% |
Transportation expense (d) | 42,045 | 0.31 | 49,964 | 0.32 | (7,919) | (16)% | (0.01) | (3)% |
Total operating expense | $196,112 | $1.45 | $227,299 | $1.46 | $(31,187) | (14)% | $(0.01) | (1)% |
Employees, administrative costs and professional services(e) | 40,482 | 0.30 | 38,497 | 0.25 | 1,985 | 5% | 0.05 | 20% |
Costs associated with acquisitions(f) | 3,724 | 0.03 | 8,866 | 0.06 | (5,142) | (58)% | (0.03) | (50)% |
Other adjusting costs(g) | 10,451 | 0.08 | 3,376 | 0.02 | 7,075 | 210% | 0.06 | 300% |
Non-cash equity compensation(h) | 3,669 | 0.03 | 4,417 | 0.03 | (748) | (17)% | — | —% |
Total operating and G&A expense | $254,438 | $1.89 | $282,455 | $1.82 | $(28,017) | (10)% | $0.07 | 4% |
Depreciation, depletion and amortization | 119,220 | 0.88 | 115,036 | 0.75 | 4,184 | 4% | 0.13 | 17% |
Total expenses | $373,658 | $2.77 | $397,491 | $2.57 | $(23,833) | (6)% | $0.20 | 8% |
7 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands) | Six Months Ended | |||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Net gain (loss) on commodity derivatives settlements(a) | $77,749 | $54,525 | $23,224 | 43% |
Net gain (loss) on interest rate swap(a) | 100 | (2,824) | 2,924 | (104)% |
Gain (loss) on foreign currency hedges(a) | — | (521) | 521 | (100)% |
Total gain (loss) on settled derivative instruments | $77,849 | $51,180 | $26,669 | 52% |
Gain (loss) on fair value adjustments of unsettled financial instruments(b) | (80,117) | 760,933 | (841,050) | (111)% |
Total gain (loss) on derivative financial instruments | $(2,268) | $812,113 | $(814,381) | (100)% |
8 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands) | Six Months Ended | |||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Interest expense, net of capitalized and income amounts(a) | $52,494 | $58,768 | $(6,274) | (11)% |
Amortization of discount and deferred finance costs | 8,087 | 8,968 | (881) | (10)% |
Total finance costs | $60,581 | $67,736 | $(7,155) | (11)% |
Loss on early retirement of debt(b) | $10,649 | $— | $10,649 | 100% |
Six Months Ended | ||||
(In thousands) | June 30, 2024 | June 30, 2023 | $ Change | % Change |
Current income tax (benefit) expense | ||||
Federal (benefit) expense | $4,568 | $1,993 | $2,575 | 129% |
State (benefit) expense | 4,217 | 2,128 | 2,089 | 98% |
Foreign - UK (benefit) expense | — | 17 | (17) | (100)% |
Total current income tax (benefit) expense | $8,785 | $4,138 | $4,647 | 112% |
Deferred income tax (benefit) expense | ||||
Federal (benefit) expense | $(98,109) | $172,067 | $(270,176) | (157)% |
State (benefit) expense | (8,722) | 21,119 | (29,841) | (141)% |
Foreign - UK (benefit) expense | 49 | — | 49 | 100% |
Total deferred income tax (benefit) expense | $(106,782) | $193,186 | $(299,968) | (155)% |
Total income tax (benefit) expense | $(97,997) | $197,324 | $(295,321) | (150)% |
9 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands) | Six Months Ended | |||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Income (loss) before taxation | $(82,252) | $828,256 | $(910,508) | (110)% |
Income tax benefit (expense) | 97,997 | (197,324) | 295,321 | (150)% |
Effective tax rate | 119.1% | 23.8% |
Six Months Ended | ||
June 30, 2024 (In thousands) | June 30, 2023 | |
Expected tax at statutory U.S. federal income tax rate | 21.0% | 21.0% |
State income taxes, net of federal tax benefit | 2.1% | 3.0% |
Federal credits | 96.9% | —% |
Other, net | (0.9)% | (0.2)% |
Effective tax rate | 119.1% | 23.8% |
(In thousands, except per unit data) | Six Months Ended | |||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Operating profit (loss) | $2,391 | $909,656 | $(907,265) | (100)% |
Net income (loss) | 15,745 | 630,932 | (615,187) | (98)% |
Adjusted EBITDA | 217,787 | 282,864 | (65,077) | (23)% |
Earnings (loss) per share - basic | $0.32 | $13.61 | $(13.29) | (98)% |
Earnings (loss) per share - diluted | 0.32 | 13.43 | (13.11) | (98)% |
10 |
Diversified Energy Company PLC Interim Report 2024 |
As of | ||
(In thousands) | June 30, 2024 | December 31, 2023 |
Cash and cash equivalents | $3,483 | $3,753 |
Available borrowings under the Credit Facility(a) | 103,088 | 134,817 |
Liquidity | $106,571 | $138,570 |
As of | ||
(In thousands) | June 30, 2024 | December 31, 2023 |
Credit Facility | 268,000 | 159,000 |
ABS I Notes | 90,847 | 100,898 |
ABS II Notes | 114,945 | 125,922 |
ABS III Notes | — | 274,710 |
ABS IV Notes | 88,418 | 99,951 |
ABS V Notes | — | 290,913 |
ABS VI Notes(a) | 273,805 | 159,357 |
ABS VIII Notes | 607,740 | — |
ABS Warehouse Facility | 71,000 | — |
Term Loan I | 98,023 | 106,470 |
Deferred consideration and miscellaneous(b) | 90,717 | 7,627 |
Total debt | $1,703,495 | $1,324,848 |
LESS: Cash and cash equivalents | 3,483 | 3,753 |
LESS: Restricted cash(c) | 54,976 | 36,252 |
Net debt | $1,645,036 | $1,284,843 |
11 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | |
(In thousands) | June 30, 2024 | December 31, 2023 |
Balance at beginning of period | $506,648 | $457,083 |
Additions(a) | 63,770 | 3,250 |
Accretion | 14,667 | 26,926 |
Plugging costs | (3,587) | (5,961) |
Divestitures(b) | — | (17,300) |
Revisions to estimate(c) | (65,407) | 42,650 |
Balance at end of period | 516,091 | 506,648 |
LESS: Current asset retirement obligations | 5,156 | 5,402 |
Non-current asset retirement obligations | $510,935 | $501,246 |
(In thousands) | Not Later Than One Year | Later Than One Year and Not Later Than Five Years | Later Than Five Years | Total |
Asset retirement obligations (undiscounted) | 5,156 | 22,389 | 1,930,307 | 1,957,852 |
Asset retirement obligations (discounted) | 5,156 | 19,629 | 491,306 | 516,091 |
(In thousands) | Not Later Than One Year | Later Than One Year and Not Later Than Five Years | Later Than Five Years | Total |
Asset retirement obligations (undiscounted) | 5,402 | 20,365 | 1,778,876 | 1,804,643 |
Asset retirement obligations (discounted) | 5,402 | 17,975 | 483,271 | 506,648 |
12 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands) | Six Months Ended | |||
June 30, 2024 | June 30, 2023 | $ Change | % Change | |
Net cash provided by operating activities | $160,810 | $172,566 | $(11,756) | (7)% |
Net cash used in investing activities | (183,648) | (250,017) | 66,369 | (27)% |
Net cash provided by (used in) financing activities | 22,568 | 74,330 | (51,762) | (70)% |
Net change in cash and cash equivalents | $(270) | $(3,121) | $2,851 | (91)% |
13 |
Diversified Energy Company PLC Interim Report 2024 |
(In thousands) | Not Later Than One Year | Later Than One Year and Not Later Than Five Years | Later Than Five Years | Total |
Recorded contractual obligations | ||||
Trade and other payables | $60,482 | $— | $— | $60,482 |
Borrowings | 211,574 | 890,810 | 601,111 | 1,703,495 |
Leases | 13,712 | 29,309 | — | 43,021 |
Asset retirement obligation(a) | 5,156 | 22,389 | 1,930,307 | 1,957,852 |
Other liabilities(b) | 122,173 | 4,491 | — | 126,664 |
Off-Balance Sheet contractual obligations | ||||
Firm transportation(c) | 30,057 | 67,234 | 187,696 | 284,987 |
Total | $443,154 | $1,014,233 | $2,719,114 | $4,176,501 |
14 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | |||
Notes | June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Revenue | 5 | $ | $ | $ |
Operating expense | 6 | ( | ( | ( |
Depreciation, depletion and amortization | 6 | ( | ( | ( |
Gross profit | ||||
General and administrative expense | 6 | ( | ( | ( |
Allowance for expected credit losses | ( | |||
Gain (loss) on natural gas and oil property and equipment | ||||
Gain (loss) on sale of equity interest | 4 | |||
Unrealized gain (loss) on investment | 4 | |||
Gain (loss) on derivative financial instruments | 8 | ( | ||
Impairment of proved properties | ( | |||
Operating profit (loss) | ||||
Finance costs | 12 | ( | ( | ( |
Accretion of asset retirement obligation | 11 | ( | ( | ( |
Loss on early retirement of debt | 12 | ( | ||
Other income (expense) | ||||
Income (loss) before taxation | ( | |||
Income tax benefit (expense) | 7 | ( | ( | |
Net income (loss) | ||||
Other comprehensive income (loss) | ( | ( | ( | |
Total comprehensive income (loss) | $ | $ | $ | |
Net income (loss) attributable to owners of the parent | ||||
Diversified Energy Company PLC | $ | $ | $ | |
Non-controlling interest | ||||
Net income (loss) | $ | $ | $ | |
Earnings (loss) per share attributable to owners of the parent | ||||
Earnings (loss) per share - basic | $ | $ | $ | |
Earnings (loss) per share - diluted | $ | $ | $ | |
Weighted average shares outstanding - basic | ||||
Weighted average shares outstanding - diluted |
15 |
Diversified Energy Company PLC Interim Report 2024 |
Notes | June 30, 2024 | December 31, 2023 | |
ASSETS | |||
Non-current assets: | |||
Natural gas and oil properties, net | $ | $ | |
Property, plant and equipment, net | |||
Intangible assets | |||
Restricted cash | 3 | ||
Derivative financial instruments | 8 | ||
Deferred tax asset | |||
Other non-current assets | |||
Total non-current assets | |||
Current assets: | |||
Trade receivables, net | |||
Cash and cash equivalents | |||
Restricted cash | 3 | ||
Derivative financial instruments | 8 | ||
Other current assets | |||
Total current assets | |||
Total assets | $ | $ | |
EQUITY AND LIABILITIES | |||
Shareholders' equity: | |||
Share capital | 9 | $ | $ |
Share premium | 9 | ||
Treasury reserve | ( | ( | |
Share-based payment and other reserves | |||
Retained earnings (accumulated deficit) | ( | ( | |
Equity attributable to owners of the parent | |||
Non-controlling interest | |||
Total equity | |||
Non-current liabilities: | |||
Asset retirement obligations | 11 | ||
Leases | |||
Borrowings | 12 | ||
Deferred tax liability | |||
Derivative financial instruments | 8 | ||
Other non-current liabilities | |||
Total non-current liabilities | |||
Current liabilities: | |||
Trade and other payables | |||
Taxes payable | |||
Leases | |||
Borrowings | 12 | ||
Derivative financial instruments | 8 | ||
Other current liabilities | |||
Total current liabilities | |||
Total liabilities | |||
Total equity and liabilities | $ | $ |
16 |
Diversified Energy Company PLC Interim Report 2024 |
Notes | Share Capital | Share Premium | Treasury Reserve | Share-Based Payment and Other Reserves | Retained Earnings (Accumulated Deficit) | Equity Attributable to Owners of the Parent | Non- Controlling Interest | Total Equity | |
Balance as of January 1, 2024 | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income (loss) | — | — | — | — | |||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | — | ( | |
Total comprehensive income (loss) | — | — | — | — | |||||
Issuance of share capital (equity compensation) | — | — | — | ( | — | ||||
Issuance of EBT shares (equity compensation) | 9 | — | — | ( | — | — | — | ||
Repurchase of shares (EBT) | 9 | — | — | ( | — | — | ( | — | ( |
Repurchase of shares (share buyback program) | 9 | ( | — | ( | — | ( | — | ( | |
Dividends | 10 | — | — | — | — | ( | ( | — | ( |
Distributions to non-controlling interest owners | — | — | — | — | — | — | ( | ( | |
Transactions with shareholders | ( | — | ( | ( | ( | ( | ( | ||
Balance as of June 30, 2024 | $ | $ | $( | $ | $( | $ | $ | $ | |
Balance as of January 1, 2023 | $ | $ | $( | $ | $( | $( | $ | $( | |
Net income (loss) | — | — | — | — | |||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | — | ( | |
Total comprehensive income (loss) | — | — | — | — | |||||
Issuance of share capital (equity placement) | 9 | — | — | — | — | ||||
Issuance of share capital (equity compensation) | — | — | — | ( | ( | — | ( | ||
Issuance of EBT shares (equity compensation) | 9 | — | — | ( | — | — | — | — | |
Repurchase of shares (share buyback program) | 9 | ( | — | ( | — | ( | — | ( | |
Dividends | 10 | — | — | — | — | ( | ( | — | ( |
Distributions to non-controlling interest owners | — | — | — | — | — | — | ( | ( | |
Transactions with shareholders | ( | ( | ( | ||||||
Balance as of June 30, 2023 | $ | $ | $( | $ | $( | $ | $ | $ | |
Balance as of January 1, 2023 | $ | $ | $( | $ | $( | $( | $ | $( | |
Net income (loss) | — | — | — | — | |||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | — | ( | |
Total comprehensive income (loss) | — | — | — | — | |||||
Issuance of share capital (equity placement) | 9 | — | — | — | — | ||||
Issuance of share capital (equity compensation) | — | — | — | ( | — | ||||
Issuance of EBT shares (equity compensation) | 9 | — | — | ( | — | — | — | — | |
Repurchase of shares (share buyback program) | 9 | ( | — | ( | — | ( | — | ( | |
Dividends | 10 | — | — | — | — | ( | ( | — | ( |
Distributions to non-controlling interest owners | — | — | — | — | — | — | ( | ( | |
Transactions with shareholders | ( | ( | ( | ( | ( | ( | |||
Balance as of December 31, 2023 | $ | $ | $( | $ | $( | $ | $ | $ |
17 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | |||
Notes | June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ | $ | $ | |
Cash flows from operations reconciliation: | ||||
Depreciation, depletion and amortization | 6 | |||
Accretion of asset retirement obligations | 11 | |||
Impairment of proved properties | ||||
Income tax (benefit) expense | ( | |||
(Gain) loss on fair value adjustments of unsettled derivative financial instruments | 8 | ( | ( | |
Asset retirement costs | 11 | ( | ( | ( |
(Gain) loss on natural gas and oil properties and equipment | 4 | ( | ( | ( |
(Gain) loss on sale of equity interest | 4 | ( | ||
Unrealized (gain) loss on investment | 4 | ( | ( | |
Finance costs | 12 | |||
Loss on early retirement of debt | ||||
Hedge modifications | 8 | |||
Non-cash equity compensation | ||||
Working capital adjustments: | ||||
Change in trade receivables and other current assets | ||||
Change in other non-current assets | ( | ( | ||
Change in trade and other payables and other current liabilities | ( | ( | ( | |
Change in other non-current liabilities | ( | ( | ||
Cash generated from operations | $ | $ | $ | |
Cash paid for income taxes | ( | ( | ( | |
Net cash provided by operating activities | $ | $ | $ | |
Cash flows from investing activities: | ||||
Consideration for asset acquisitions | 4 | $( | $( | $( |
Proceeds from divestitures | 4 | |||
Expenditures on natural gas and oil properties and equipment | ( | ( | ( | |
Proceeds on disposals of natural gas and oil properties and equipment | ||||
Deferred consideration payments | ( | ( | ( | |
Net cash used in investing activities | $( | $( | $( | |
Cash flows from financing activities: | ||||
Repayment of borrowings | 12 | $( | $( | $( |
Proceeds from borrowings | 12 | |||
Penalty on early retirement of debt | 12 | ( | ||
Cash paid for interest | 12 | ( | ( | ( |
Debt issuance cost | 12 | ( | ( | ( |
(Increase) decrease in restricted cash | ( | |||
Hedge modifications associated with ABS Notes | 8,12 | ( | ||
Proceeds from equity issuance, net | 9 | |||
Proceeds from lease modifications | ||||
Principal element of lease payments | ( | ( | ( | |
Dividends to shareholders | 10 | ( | ( | ( |
Distributions to non-controlling interest owners | ( | ( | ( | |
Repurchase of shares by the EBT | 9 | ( | ||
Repurchase of shares | 9 | ( | ( | ( |
Net cash provided by (used in) financing activities | $ | $ | $( | |
Net change in cash and cash equivalents | ( | ( | ( | |
Cash and cash equivalents, beginning of period | ||||
Cash and cash equivalents, end of period | $ | $ | $ |
18 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
Page | Page | ||||
Note 4 - Acquisitions and Divestitures | |||||
19 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
Diversified Energy Company PLC (“DEC”) as well as its wholly owned subsidiaries: | |||||
›Diversified Gas & Oil Corporation | ›DP Lion Equity Holdco LLC | (c) | ›Riverside Land LLC | (d) | |
›Diversified Production LLC | ›DP Lion HoldCo LLC | (c) | ›Splendid Land LLC | (d) | |
›Diversified ABS Holdings LLC | ›Diversified ABS VIII Holdings LLC | ›Next LVL Energy, LLC | |||
›Diversified ABS LLC | ›Diversified ABS VIII LLC | ›Diversified Midstream LLC | |||
›Diversified ABS Phase II Holdings LLC | ›Diversified ABS III Upstream LLC | ›Cranberry Pipeline Corporation | |||
›Diversified ABS Phase II LLC | ›Diversified ABS V Upstream II LLC | ›Coalfield Pipeline Company | |||
›Diversified ABS Phase IV Holdings LLC | ›DP Mustang Equity Holdco LLC | ›DM Bluebonnet LLC | |||
›Diversified ABS Phase IV LLC | ›DP Mustang Holdco LLC | ›Black Bear Midstream Holdings LLC | |||
›DP Bluegrass Holdings LLC | ›DP RBL Co LLC | ›Black Bear Midstream LLC | |||
›DP Bluegrass LLC | ›DP Legacy Central LLC | ›Black Bear Liquids LLC | |||
›Chesapeake Granite Wash Trust | (a) | ›Diversified Energy Marketing LLC | ›Black Bear Liquids Marketing LLC | ||
›BlueStone Natural Resources II LLC | ›OCM Denali Holdings LLC | ›DM Pennsylvania Holdco LLC | |||
›Sooner State Joint ABS Holdings LLC | (b) | ›DP Tapstone Energy Holdings LLC | ›DGOC Holdings Sub III LLC | ||
›Diversified ABS Phase VI Holdings LLC | ›DP Legacy Tapstone LLC | ›Diversified Energy Group LLC | |||
›Diversified ABS Phase VI LLC | ›Giant Land, LLC | (d) | ›Diversified Energy Company LLC | ||
›Diversified ABS VI Upstream LLC | ›Link Land LLC | (d) | |||
›Oaktree ABS VI Upstream LLC | ›Old Faithful Land LLC | (d) |
20 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
June 30, 2024 | December 31, 2023 | |
Cash restricted by asset-backed securitizations | $ | $ |
Other restricted cash | ||
Total restricted cash | $ | $ |
Classified as: | ||
Current asset | $ | $ |
Non-current asset | ||
Total | $ | $ |
21 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
Consideration paid | |
Cash consideration | $ |
Oaktree Seller's Note | |
Elimination of Oaktree liability | ( |
Total consideration | $ |
Net assets acquired | |
Natural gas and oil properties | $ |
Asset retirement obligation, asset portion | |
Property, plant and equipment | |
Restricted cash | |
Derivative financial instruments, net | |
Asset retirement obligation, liability portion | ( |
Borrowings | ( |
Other current liabilities | ( |
Net assets acquired | $ |
22 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Natural gas | $ | $ | $ |
NGLs | |||
Oil | |||
Total commodity revenue | $ | $ | $ |
Midstream | |||
Other(a) | |||
Total revenue | $ | $ | $ |
23 |
Table of Contents | Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
LOE(a) | $ | $ | $ |
Production taxes(b) | |||
Midstream operating expense(c) | |||
Transportation expense(d) | |||
Total operating expense | $ | $ | $ |
Depreciation and amortization | |||
Depletion | |||
Total depreciation, depletion and amortization | $ | $ | $ |
Employees administrative costs and professional services(e) | |||
Costs associated with acquisitions(f) | |||
Other adjusting costs(g) | |||
Non-cash equity compensation(h) | |||
Total G&A | $ | $ | $ |
Recurring allowance for credit losses(i) | |||
Total expense | $ | $ | $ |
Aggregate remuneration (including Directors): | |||
Wages and salaries | $ | $ | $ |
Payroll taxes | |||
Benefits | |||
Total employees and benefits expense | $ | $ | $ |
24 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Current income tax (benefit) expense | |||
Federal (benefit) expense | $ | $ | $ |
State (benefit) expense | |||
Foreign - UK (benefit) expense | |||
Total current income tax (benefit) expense | $ | $ | $ |
Deferred income tax (benefit) expense | |||
Federal (benefit) expense | $( | $ | $ |
State (benefit) expense | ( | ||
Foreign - UK (benefit) expense | ( | ||
Total deferred income tax (benefit) expense | $( | $ | $ |
Total income tax (benefit) expense | $( | $ | $ |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Income (loss) before taxation | $( | $ | $ |
Income tax benefit (expense) | ( | ( | |
Effective tax rate |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Expected tax at statutory U.S. federal income tax rate | |||
State income taxes, net of federal tax benefit | |||
Federal credits | |||
Other, net | ( | ( | |
Effective tax rate |
25 |
Diversified Energy Company PLC Interim Report 2024 |
Swaps: | If the Group sells a swap, it receives a fixed price for the contract and pays a floating market price to the counterparty; |
Collars: | Arrangements that contain a fixed floor price (purchased put option) and a fixed ceiling price (sold call option) based on an index price which, in aggregate, have no net costs. At the contract settlement date, (1) if the index price is higher than the ceiling price, the Group pays the counterparty the difference between the index price and ceiling price, (2) if the index price is between the floor and ceiling prices, no payments are due from either party, and (3) if the index price is below the floor price, the Group will receive the difference between the floor price and the index price. Certain collar arrangements may also include a sold put option with a strike price below the purchased put option. Referred to as a three-way collar, the structure works similar to the above description, except that when the index price settles below the sold put option, the Group pays the counterparty the difference between the index price and sold put option, effectively enhancing realized pricing by the difference between the price of the sold and purchased put option; |
Basis swaps: | Arrangements that guarantee a price differential for commodities from a specified delivery point. If the Group sells a basis swap, it receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract; |
Put options: | The Group purchases and sells put options in exchange for a premium. If the Group purchases a put option, it receives from the counterparty the excess (if any) of the market price below the strike price of the put option at the time of settlement, but if the market price is above the put’s strike price, no payment is due from either party. If the Group sells a put option, the Group pays the counterparty the excess (if any) of the market price below the strike price of the put option at the time of settlement, but if the market price is above the put’s strike price, no payment is due from either party; |
Call options: | The Group purchases and sells call options in exchange for a premium. If the Group purchases a call option, it receives from the counterparty the excess (if any) of the market price over the strike price of the call option at the time of settlement, but if the market price is below the call’s strike price, no payment is due from either party. If the Group sells a call option, it pays the counterparty the excess (if any) of the market price over the strike price of the call option at the time of settlement, but if the market price is below the call’s strike price, no payment is due from either party; and |
Swaptions: | If the Group sells a swaption, the counterparty will receive the option to enter into a swap contract at a specified date and receives a fixed price for the contract and pays a floating market price to the counterparty. |
Natural Gas Contracts | Weighted Average Price per Mcfe(a) | |||||||
Volume | Sold | Purchased | Sold | Purchased | Basis | Fair Value at | ||
(MMBtu) | Swaps | Puts | Puts | Calls | Calls | Differential | June 30, 2024 | |
For the remainder of 2024 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $ | |
Stand-alone calls, net(b) | — | — | — | — | — | — | ( | |
Basis swaps | — | — | — | — | — | ( | ||
2025 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ||||
Stand-alone calls, net(b) | — | — | — | — | — | ( | ||
Basis swaps | — | — | — | — | — | ( | ( | |
2026 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ( | |||
Stand-alone calls, net(b) | — | — | — | — | — | ( | ||
Basis swaps | — | — | — | — | — | ( | ( |
26 |
Diversified Energy Company PLC Interim Report 2024 |
Natural Gas Contracts | Weighted Average Price per Mcfe(a) | |||||||
Volume | Sold | Purchased | Sold | Purchased | Basis | Fair Value at | ||
(MMBtu) | Swaps | Puts | Puts | Calls | Calls | Differential | June 30, 2024 | |
2027 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ||||
Stand-alone calls, net(b) | — | — | — | — | — | ( | ||
Basis swaps | — | — | — | — | — | ( | ( | |
2028 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ||||
Stand-alone calls, net(b) | — | — | — | — | — | — | ( | |
Purchased puts | — | — | — | — | — | |||
Sold puts | — | — | — | — | — | ( | ||
Basis swaps | — | — | — | — | — | ( | ( | |
2029 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ||||
Purchased puts | — | — | — | — | — | |||
Sold puts | — | — | — | — | — | ( | ||
Basis swaps | — | — | — | — | — | ( | ( | |
2030 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $( | |
Two-way collars | — | — | — | — | ||||
Purchased puts | — | — | — | — | — | |||
Sold puts | — | — | — | — | — | ( | ||
2031 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $ | |
Two-way collars | — | — | — | — | ||||
2032 | ||||||||
Swaps | $ | $— | $— | $— | $— | $— | $ | |
Two-way collars | — | — | — | — | ( | |||
Swaptions | ||||||||
10/1/2024-9/30/2028(c) | $ | $— | $— | $— | $— | $— | $( | |
1/1/2025-12/31/2029(d) | — | — | — | — | — | ( | ||
4/1/2026-3/31/2030(e) | — | — | — | — | — | ( | ||
4/1/2030-3/31/2032(f) | — | — | — | — | — | ( | ||
Total natural gas contracts | $( |
27 |
Diversified Energy Company PLC Interim Report 2024 |
NGLs Contracts | Weighted Average Price per Bbl | |||
Volume | Sold | Fair Value at | ||
(MBbls) | Swaps | Calls | June 30, 2024 | |
For the Remainder of 2024 | ||||
Swaps | $ | $— | $( | |
Stand-alone calls | — | ( | ||
2025 | ||||
Swaps | $ | $— | $( | |
Stand-alone calls | — | ( | ||
2026 | ||||
Swaps | $ | $— | $( | |
Stand-alone calls | — | ( | ||
2027 | ||||
Swaps | $ | $— | $( | |
2028 | ||||
Swaps | $ | $— | $( | |
Total NGLs contracts | $( |
Oil Contracts | Weighted Average Price per Bbl | ||||
Volume | Purchased | Sold | Fair Value at | ||
(MBbls) | Swaps | Puts | Calls | June 30, 2024 | |
For the Remainder of 2024 | |||||
Swaps | $ | $— | $— | $( | |
Two-way collars | — | ||||
Sold calls | — | — | ( | ||
2025 | |||||
Swaps | $ | $— | $— | $( | |
Sold calls | — | — | ( | ||
2026 | |||||
Swaps | $ | $— | $— | $( | |
Sold calls | — | — | ( | ||
2027 | |||||
Swaps | $ | $— | $— | $( | |
Total oil contracts | $( |
Interest | Principal Hedged | Fair Value at | |
Fixed Rate | June 30, 2024 | ||
2024 | |||
SOFR interest rate swap | $ | $ | |
Net fair value of derivative financial instruments as of June 30, 2024 | $( |
28 |
Diversified Energy Company PLC Interim Report 2024 |
Derivative Financial Instruments | Consolidated Statement of Financial Position | June 30, 2024 | December 31, 2023 |
Assets: | |||
Non-current assets | Derivative financial instruments | $ | $ |
Current assets | Derivative financial instruments | ||
Total assets | $ | $ | |
Liabilities: | |||
Non-current liabilities | Derivative financial instruments | $( | $( |
Current liabilities | Derivative financial instruments | ( | ( |
Total liabilities | $( | $( | |
Net assets (liabilities): | |||
Net assets (liabilities) - non-current | Derivative financial instruments | $( | $( |
Net assets (liabilities) - current | Derivative financial instruments | ( | |
Total net assets (liabilities) | $( | $( |
As of June 30, 2024 | |||
Presented without Effects of Netting | Effects of Netting | As Presented with Effects of Netting | |
Non-current assets | $ | $( | $ |
Current assets | ( | ||
Total assets | $ | $( | $ |
Non-current liabilities | $( | $ | $( |
Current liabilities | ( | ( | |
Total liabilities | $( | $ | $( |
Total net assets (liabilities) | $( | $ | $( |
As of December 31, 2023 | |||
Presented without Effects of Netting | Effects of Netting | As Presented with Effects of Netting | |
Non-current assets | $ | $( | $ |
Current assets | ( | ||
Total assets | $ | $( | $ |
Non-current liabilities | $( | $ | $( |
Current liabilities | ( | ( | |
Total liabilities | $( | $ | $( |
Total net assets (liabilities) | $( | $ | $( |
29 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Net gain (loss) on commodity derivatives settlements(a) | $ | $ | $ |
Net gain (loss) on interest rate swaps(a) | ( | ( | |
Gain (loss) on foreign currency hedges(a) | ( | ( | |
Total gain (loss) on settled derivative instruments | $ | $ | $ |
Gain (loss) on fair value adjustments of unsettled financial instruments(b) | ( | ||
Total gain (loss) on derivative financial instruments | $( | $ | $ |
30 |
Diversified Energy Company PLC Interim Report 2024 |
Number of Shares | Total Share Capital | Total Share Premium | |
Balance as of January 1, 2024 | $ | $ | |
Issuance of EBT shares (equity compensation) | |||
Repurchase of shares (EBT) | ( | ||
Repurchase of shares (share buyback program) | ( | ( | |
Balance as of June 30, 2024 | $ | $ | |
Balance as of January 1, 2023 | $ | $ | |
Issuance of share capital (equity placement) | |||
Issuance of EBT shares (equity compensation) | |||
Repurchase of shares (share buyback program) | ( | ( | |
Balance as of June 30, 2023 | $ | $ | |
Balance as of January 1, 2023 | $ | $ | |
Issuance of share capital (equity placement) | |||
Issuance of EBT shares (equity compensation) | |||
Repurchase of shares (share buyback program) | ( | ( | |
Balance as of December 31, 2023 | $ | $ |
31 |
Diversified Energy Company PLC Interim Report 2024 |
Dividend per Share | Record Date | Pay Date | Shares Outstanding | Gross Dividends Paid | ||
Date Dividends Declared | USD | GBP | ||||
November 15, 2023 | $ | £ | March 1, 2024 | March 28, 2024 | $ | |
April 10, 2024 | $ | £ | May 24, 2024 | June 28, 2024 | ||
Paid during the six months ended June 30, 2024 | $ | |||||
Dividend per Share | Record Date | Pay Date | Shares Outstanding | Gross Dividends Paid | ||
Date Dividends Declared | USD | GBP | ||||
November 14, 2022 | $ | £ | March 3, 2023 | March 28, 2023 | $ | |
March 21, 2023 | $ | £ | May 26, 2023 | June 30, 2023 | ||
Paid during the six months ended June 30, 2023 | $ | |||||
May 9, 2023 | $ | £ | September 1, 2023 | September 29, 2023 | $ | |
September 1, 2023 | $ | £ | December 1, 2023 | December 29, 2023 | ||
Paid during the year ended December 31, 2023 | $ |
32 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | |
June 30, 2024 | December 31, 2023 | |
Balance at beginning of period | $ | $ |
Additions(a) | ||
Accretion | ||
Plugging costs | ( | ( |
Divestitures(b) | ( | |
Revisions to estimate(c) | ( | |
Balance at end of period | $ | $ |
LESS: Current asset retirement obligations | ||
Non-current asset retirement obligations | $ | $ |
ARO Sensitivity | Scenario 1(a) | Scenario 2(b) |
Discount rate | $( | $ |
Timing | ( | |
Cost | ( |
33 |
Diversified Energy Company PLC Interim Report 2024 |
June 30, 2024 | December 31, 2023 | |
Credit Facility (interest rate of | $ | $ |
ABS I Notes (interest rate of | ||
ABS II Notes (interest rate of | ||
ABS III Notes (interest rate of | ||
ABS IV Notes (interest rate of | ||
ABS V Notes (interest rate of | ||
ABS VI Notes (interest rate of | ||
ABS VIII Notes (interest rate of | ||
ABS Warehouse Facility (interest rate of | ||
Term Loan I (interest rate of | ||
Deferred consideration and miscellaneous(c) | ||
Total borrowings | $ | $ |
Less: Current portion of long-term debt | ( | ( |
Less: Deferred financing costs | ( | ( |
Less: Original issue discounts | ( | ( |
Total non-current borrowings, net | $ | $ |
34 |
Diversified Energy Company PLC Interim Report 2024 |
35 |
Diversified Energy Company PLC Interim Report 2024 |
36 |
Diversified Energy Company PLC Interim Report 2024 |
37 |
Diversified Energy Company PLC Interim Report 2024 |
June 30, 2024 | December 31, 2023 | |
Not later than one year | $ | $ |
Later than one year and not later than five years | ||
Later than five years | ||
Total borrowings | $ | $ |
38 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Interest expense, net of capitalized and income amounts(a) | $ | $ | $ |
Amortization of discount and deferred finance costs | |||
Total finance costs | $ | $ | $ |
Loss on early retirement of debt(b) | $ | $ | $ |
Six Months Ended | Year Ended | ||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Balance at beginning of period | $ | $ | $ |
Acquired as part of an acquisition | |||
Sale of equity interest | ( | ||
Proceeds from borrowings | |||
Repayments of borrowings | ( | ( | ( |
Costs incurred to secure financing | ( | ( | ( |
Amortization of discount and deferred financing costs | |||
Cash paid for interest | ( | ( | ( |
Finance costs and other | |||
Balance at end of period | $ | $ | $ |
Level 1: | Inputs are unadjusted, quoted prices in active markets for identical assets at the measurement date. |
Level 2: | Inputs (other than quoted prices included in Level 1 can include the following): (1)Observable prices in active markets for similar assets; (2)Prices for identical assets in markets that are not active; (3)Directly observable market inputs for substantially the full term of the asset; and (4)Market inputs that are not directly observable but are derived from or corroborated by observable market data. |
Level 3: | Unobservable inputs which reflect the Directors’ best estimates of what market participants would use in pricing the asset at the measurement date. |
39 |
Diversified Energy Company PLC Interim Report 2024 |
June 30, 2024 | December 31, 2023 | |
Cash and cash equivalents | $ | $ |
Trade receivables, net | ||
Other non-current assets | ||
Other non-current liabilities(a) | ( | ( |
Other current liabilities(b) | ( | ( |
Derivative financial instruments at fair value | ( | ( |
Leases | ( | ( |
Borrowings | ( | ( |
Total | $( | $( |
40 |
Diversified Energy Company PLC Interim Report 2024 |
Description | Footnote |
Acquisitions & Divestitures | Note 4 |
Dividends | Note 10 |
41 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Net income (loss) | $15,745 | $630,932 | $128,769 |
Finance costs | 60,581 | 67,736 | 66,430 |
Accretion of asset retirement obligations | 14,667 | 13,991 | 12,935 |
Other (income) expense(a) | (755) | (327) | (58) |
Income tax (benefit) expense | (97,997) | 197,324 | 43,319 |
Depreciation, depletion and amortization | 119,220 | 115,036 | 109,510 |
(Gain) loss on fair value adjustments of unsettled financial instruments | 80,117 | (760,933) | (144,762) |
(Gain) loss on natural gas and oil property and equipment(b) | 249 | (899) | 919 |
(Gain) loss on sale of equity interest | — | — | (18,440) |
Unrealized (gain) loss on investment | (2,433) | — | (4,610) |
Impairment of proved properties(c) | — | — | 41,616 |
Costs associated with acquisitions | 3,724 | 8,866 | 7,909 |
Other adjusting costs(d) | 10,451 | 3,376 | 14,418 |
Loss on early retirement of debt | 10,649 | — | — |
Non-cash equity compensation | 3,669 | 4,417 | 2,077 |
(Gain) loss on foreign currency hedge | — | 521 | — |
(Gain) loss on interest rate swap | (100) | 2,824 | (102) |
Total adjustments | $202,042 | $(348,068) | $131,161 |
Adjusted EBITDA | $217,787 | $282,864 | $259,930 |
42 |
Diversified Energy Company PLC Interim Report 2024 |
As of | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Credit Facility | $268,000 | $265,000 | $159,000 |
ABS I Notes | 90,847 | 111,007 | 100,898 |
ABS II Notes | 114,945 | 136,550 | 125,922 |
ABS III Notes | — | 295,151 | 274,710 |
ABS IV Notes | 88,418 | 113,609 | 99,951 |
ABS V Notes | — | 329,381 | 290,913 |
ABS VI Notes(a) | 273,805 | 183,758 | 159,357 |
ABS VIII Notes | 607,740 | — | — |
ABS Warehouse Facility | 71,000 | — | — |
Term Loan I | 98,023 | 112,433 | 106,470 |
Deferred consideration and miscellaneous(b) | 90,717 | 8,319 | 7,627 |
Total debt | $1,703,495 | $1,555,208 | $1,324,848 |
LESS: Cash and cash equivalents | 3,483 | 4,208 | 3,753 |
LESS: Restricted cash(c) | 54,976 | 41,188 | 36,252 |
Net debt | $1,645,036 | $1,509,812 | $1,284,843 |
Adjusted EBITDA | $217,787 | $282,864 | $259,930 |
Pro forma TTM adjusted EBITDA(d) | $584,261 | $633,875 | $549,258 |
Net debt-to-pro forma TTM adjusted EBITDA(e) | 2.8x | 2.4x | 2.3x |
43 |
Diversified Energy Company PLC Interim Report 2024 |
Six Months Ended | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Total revenue | $368,674 | $487,305 | $380,958 |
Net gain (loss) on commodity derivative instruments(a) | 77,749 | 54,525 | 123,539 |
Total revenue, inclusive of settled hedges | $446,423 | $541,830 | $504,497 |
Adjusted EBITDA | $217,787 | $282,864 | $259,930 |
Adjusted EBITDA margin | 49% | 52% | 52% |
Six Months Ended | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Net cash provided by operating activities | $160,810 | $172,566 | $237,566 |
LESS: Expenditures on natural gas and oil properties and equipment | (20,848) | (32,332) | (41,920) |
LESS: Cash paid for interest | (47,632) | (60,215) | (56,569) |
Free cash flow | $92,330 | $80,019 | $139,077 |
Six Months Ended | |||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |
Total production (Mcfe) | 135,763 | 154,182 | 145,450 |
Total operating expense | $196,112 | $227,299 | $213,263 |
Employees, administrative costs & professional services | 40,482 | 38,497 | 40,162 |
Recurring allowance for credit losses | — | — | 8,478 |
Adjusted operating cost | $236,594 | $265,796 | $261,903 |
Adjusted operating cost per Mcfe | $1.74 | $1.72 | $1.80 |
44 |
Diversified Energy Company PLC Interim Report 2024 |
£ | British pound sterling |
$ | U.S. dollar |
ABS | Asset-Backed Security |
Adjusted EBITDA | Adjusted EBITDA is an APM. Please refer to the APMs section in Additional Information in this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
Adjusted EBITDA margin | Adjusted EBITDA margin is an APM. Please refer to the APMs section in Additional Information in this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
Adjusted operating cost | Adjusted operating cost is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
Adjusted operating cost per Mcfe | Adjusted operating cost per Mcfe is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
AIM | Alternative Investment Market |
APM | Alternative Performance Measure |
Bbl | Barrel or barrels of oil or natural gas liquids |
Bcfe | Billions of cubic fee equivalent |
Board or BOD | Board of Directors |
Boe | Barrel of oil equivalent, determined by using the ratio of one Bbl of oil or NGLs to six Mcf of natural gas. The ratio of one barrel of oil or NGLs to six Mcf of natural gas is commonly used in the industry and represents the approximate energy equivalence of oil or NGLs to natural gas, and does not represent the economic equivalency of oil and NGLs to natural gas. The sales price of a barrel of oil or NGLs is considerably higher than the sales price of six Mcf of natural gas. |
Boepd | Barrels of oil equivalent per day |
Btu | A British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit. |
CO2 | Carbon dioxide |
CO2e | CO2 equivalent |
CEO | Chief Executive Officer |
CFO | Chief Financial Officer |
COO | Chief Operating Officer |
DD&A | Depreciation, depletion and amortization |
E&P | Exploration and production |
EBITDA | Earnings before interest, tax, depreciation and amortization |
EBITDAX | Earnings before interest, tax, depreciation, amortization and exploration expense |
Employees, administrative costs and professional services | Employees, administrative costs and professional services is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
EPA | Environmental Protection Agency |
EPS | Earnings per share |
ERM | Enterprise Risk Management |
EU | European Union |
Free cash flow | Free cash flow is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
FTSE | Financial Times Stock Exchange |
G&A | General and administrative expense |
GBP | British pound sterling |
Henry Hub | A natural gas pipeline delivery point that serves as the benchmark natural gas price underlying NYMEX natural gas futures contracts. |
IAS | International Accounting Standards |
IASB | International Accounting Standards Board |
IPO | Initial public offering |
IFRS | International Financial Reporting Standards |
45 |
Diversified Energy Company PLC Interim Report 2024 |
KWh | Kilowatt hour |
LIBOR | London Inter-bank Offered Rate |
LOE | Lease operating expense is defined as the sum of employee and benefit expenses, well operating expense (net), automobile expense and insurance cost. |
LSE | London Stock Exchange |
M&A | Mergers and acquisitions |
MBbls | Thousand barrels |
MBoe | Thousand barrels of oil equivalent |
MBoepd | MBoe per day |
Mcf | Thousand cubic feet of natural gas |
Mcfe | Mcf equivalent |
Mcfepd | Mcfe per day |
Midstream | Midstream activities include the processing, storing, transporting and marketing of natural gas, NGLs and oil. |
MMBoe | Million barrels of oil equivalent |
MMBtu | Million British thermal units |
MMcf | Million cubic feet of natural gas |
MMcfe | Million cubic feet of natural gas equivalent |
Mont Belvieu | A mature trading hub with a high level of liquidity and transparency that sets spot and futures prices for NGLs. |
Net debt | Net debt is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
Net debt-to-pro forma TTM adjusted EBITDA | Net debt-to-pro forma TTM adjusted EBITDA, or “leverage” or “leverage ratio”, is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
NGLs | Natural gas liquids, such as ethane, propane, butane and natural gasoline that are extracted from natural gas production streams. |
NYMEX | New York Mercantile Exchange |
Oil | Includes crude oil and condensate |
Pro forma TTM adjusted EBITDA | Pro forma TTM adjusted EBITDA is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
PSU | Performance stock unit |
Realized price | The cash market price less all expected quality, transportation and demand adjustments. |
RSU | Restricted stock unit |
SOFR | Secured Overnight Financing Rate |
TRIR | Total recordable incident rate (“TRIR”) is the number of work-related injuries per 200,000 work hours. |
Total revenue, inclusive of settled hedges | Total revenue, inclusive of settled hedges, is an APM. Please refer to the APMs section in Additional Information within this Interim Report for information on how this metric is calculated and reconciled to IFRS measures. |
TSR | Total Shareholder Return |
TTM | Trailing twelve months |
UK | United Kingdom |
U.S. | United States |
USD | U.S. dollar |
WTI | West Texas Intermediate grade crude oil, used as a pricing benchmark for sales contracts and NYMEX oil futures contracts. |