Thank you guys for attending our Chicago Ideas Conference this year. I'm Phillip Cooper, Managing Director with Three Part Advisors. Our next presentation is from Diversified Energy Company, which is traded both on the London Stock Exchange and the New York Stock Exchange under the ticker symbol DEC, and presenting from the company today is Doug Kris, Senior Vice President of Investor Relations. Doug? Great. Thank you, Phillip, and thank you for having us here today. It's always good to be at these conferences. It's been a few years since I've been at this one, so it's good to see the attendees back in town and at the conference. So again, appreciate everyone for sticking around here to the end of the day. I am probably the one that's holding you up, either from a flight and/or cocktail hour, so I'm gonna try and be efficient in this presentation, but hopefully, you know, you'll get something out of it and learn a little bit more about our company. What I'd like to do is probably something that none of the presentation presenters here have done today, which is I want to just highlight this slide and have you take a look at it, 'cause there's a couple of aspects on this title that I think are very important, very thematic, and are really describing the strategy of our business, which is, you know, the solutions-based provider, responsibly producing energy, and creating shareholder value. So at the end of the day, that is really what we're trying to accomplish. So let's see. How do I... All right, there we go. Okay. Now, I'm gonna spend no time on this slide right here, so, 'cause I think we all know that. All right, so just a little bit about who is Diversified Energy. You know, we are a differentiated oil and gas company. We're focused on acquiring mature, producing or previously developed natural gas assets predominantly, improving the production profile, as well as the emissions profile of those assets, and responsibly managing those assets within an infrastructure platform that has been built and utilizes scale and vertical integration, embraces technology, and provides efficiencies to reduce costs, enhance margins, and generate meaningful free cash flow. We've built a business that's focused on operating wells that have been really developed by a number of great producers, but after the first few years, they have not been the focus of those producers. We believe that given the pace of development here in the U.S. and in North America, production of these assets is extremely important. At any time, it's roughly between these mature producing assets, 10%-13% of the production in North America. Diversified is well-positioned as the right company at the right time to take advantage of what are divestitures of those non-core assets that aren't a focus from those producers as they look to really reinvest capital into the drill bit. Currently, we're the only pure-play, publicly traded company that is really looking at this strategy in the U.S. Our operations are in two geographic regions amongst ten different states. You know, as you can see here, we operate in what is called the Appalachia Region up in the Northeast, which is West Virginia, Ohio, and Pennsylvania, predominantly. And then what we characterize as our Central Region, East Texas, Louisiana, and Oklahoma. With our most recent acquisition that we announced just last week, the production profile of these assets is closer to fifty-fifty across that operating footprint. We've got roughly about a $650 million market cap. As Philip mentioned, we trade on the New York Stock Exchange and the London Stock Exchange under the symbol DEC. Importantly, we are not an ADR, so we are a fully dual-listed security. Same CUSIP in both markets, settles in DTC and completely fungible, and why that's important to recognize is that we began trading on the New York Stock Exchange in December of last year, and because of that construct and that structure that we provided, we were able to get indexation within the U.S., as well as become, you know, entwined in a number of these index-related ETFs, and other sector-related ETFs. So it's improved the volume and liquidity of our daily trading, pretty dramatically. In the next few slides, I'm gonna talk a little bit more in granularity about our business, the strategy, the aspects of our business model, really. And strategically, what we've tried to do is really reduced exposure to what are the traditional risks within upstream or E&P investments. Those risks include commodity price risk, development risk, financing risk, and environmental risk. With the commodity price risk, we've hedged a lot of our natural gas production. We're roughly about 80%-85% hedged in the near term on those prices, giving us a lot of surety of cash flows at the end of the day. We've taken a lot of the development risk off the table. No longer are you needing to know, "Is my acreage in the right county, in the right township? What are the type curves of these assets? What is the ultimate production?" Because we are not developing those assets, we're already managing already developed, high-quality assets. We've taken a lot of the financing risk off the table. We don't utilize what is traditionally in the E&P space, which is the high yield market. So we've got ABS securities as our debt structure in a number of different tranches. These are investment grade. The last one we did was A-rated. Some of them are sustainability linked, and they are low cost of capital because of those constructs, and mostly invested by insurance companies, whether it's AIG, Voya, Munich Re, and the like. We've also taken a lot of the environmental risk off the table. With our strategy that we pursue, we are highly focused on managing these assets and the emissions profiles of these assets under a stewardship model. We've reduced our emissions since 2022 by over 50%, and more importantly, we reached our 2030 target at the end of last year. What does all that mean? That means with any of the new regulations that are being proposed by the Department of Energy and the IRA bill, we are below any fee construct for emissions that would necessitate us paying fees for those. So we are in a very good place to manage these assets for the long term. Our assets, we do surveys on a regular basis. Some of it's continuous monitoring. We are 99.5% leak-free on those assets for any GHG emissions. So important construct. What does all that mean? It allows us to really have, over the past seven years, 50% plus margins generate meaningful cash flow at the end of the day. Part of that business of managing these mature assets is really the production profile of that. As you can see here, what's important to recognize is most of the E&Ps, and these are natural gas E&Ps on this page, have high yearly production profiles, meaning that if they don't do anything, their production is going to roll off 30% without spending any CapEx. For us, our corporate decline or production profile is really 10%, right? So that corporate decline in those two basins, if you were to bifurcate them, it's roughly 3%-4% in Appalachia and a little bit higher in Oklahoma and East Texas and Louisiana, just because of the vintage of those wells. We also have very good capital intensity. And what that means is that our CapEx as a component of EBITDA at the end of the day, using that as kind of a cash flow metric, is 10% or less. Our EBITDA last year was $543 million. Our capital program, our sustaining capital program, is roughly about $50 million. At the end of the day, this attribute allows us to generate, again, meaningful cash flow. Our discipline strategy also, again, allows us to have these high margins, and really, we've been able to deliver on those high margins for over seven years. Whether commodity prices are $5, $2, $9, we've stayed disciplined to our hedging strategy. In 2022, we might have looked like chumps, but I think over the longer period, having meaningful cash flow generation is what our investors want. We return a fair amount of that capital to shareholders in a capital allocation framework that has really four pillars. Dividend return, we have roughly about 8.5% dividend yield. We have strategic shareholder buybacks, where this year our you know, we've so far up to the midyear, we've bought back around 3% of our shares outstanding and have a mandate to buy up to 10% of our shares outstanding in any given year. Debt reduction, we are in because of the ABS structure, these are naturally de-levering products. Every year, we pay down principal in those products to the tune of, you know, over 10%. So it's a which creates equity value at the end of the day. It's a very important construct as we continue to kind of grow our business for the long term. We have a very high cash generation component and really a cash conversion component. When you think about what is the ultimate EBITDA converted into cash flow, meaningfully higher than a lot of development companies because they're spending the vast majority of their cash flow reinvesting in the drill bit in their CapEx programs. We are an acquisitions-focused company. That is part of our strategy. That is how we've grown over the past seven years. You know, the generation of free cash flow obviously is at the heart of it, but we are disciplined to the free cash, or I'm sorry, the acquisition framework that we have in place. What is that framework? We're trying to buy assets at a PV15 to PV20 valuation. So when you think about what that means, in layman's terms, it's really the, your IRR at the end of the day, unlevered, IRR. And we've been able to do that. Here, we've highlighted a couple of more recent acquisitions, one of which was a multiple of cash flows or EBITDA, of three times at a PV 17 valuation. This was an acquisition in our Central Region, as well as our Crescent Pass acquisition, which was announced in July. Additionally, that acquisition that we announced last week is in that same East Texas area. So we're continuing to build scale through bolt-on acquisitions that are highly accretive and at great valuations. You know, now is the time where you really need to be buying natural gas assets, at least that's our view, when prices are low, and you're able to get divestments from others in the industry. How does this all roll up into our strategy or our execution plan? As I mentioned, I'll just highlight here, you know, what we've been able to do through the first six months of the year, and really, those four pillars. Right, those four pillars of cash flow at the end of the day is extremely important and allows us to create value from the acquisitions, as well as create value by paying down debt, and create shareholder value through a return metric of share repurchases and dividends. What is the opportunity for investors? Right, when you think about today's current market backdrop and where the E&P sector is, it's important for us to recognize where we sit in the value chain. I think historically, you know, we've traded at a 5.6 times multiple. Where we're trading today, it's roughly about a 4 times multiple, whereas the rest of the sector trading at a 6 times multiple. So why the disconnect? Well, part of that relates to why is the reason that we came to the New York Stock Exchange. You know, for others who might not have seen it, the U.K. market has been structurally in a downturn for the past 18 months to two years. Started with Brexit. You know, at the time, prior to Brexit, the market capitalization of the U.K. was roughly, you know, the third largest market of capitalization in the world. Now, they're struggling to be in that top ten because of the basically, the market structure and the anti-competitiveness of some of their areas. That, coupled with fossil fuels not being appreciated in the European Union and specifically in the U.K., they've increased windfall taxes, and while we're not a U.K. company with our assets, you get kind of thrown into that sector with everything that trades over there. So that's really a good component of why the disconnect. When you look at some of the majors, whether it's BP or Shell, they've historically traded at a discount. But now they've gotten to the point where you've got both BP and Shell saying that, "We're moving our corporate headquarters to Houston," which is the shot over the bow to the U.K. market, saying that, "We don't think our value is in the U.K. market anymore. It's in the U.S. market." Obviously, we're not of the same ilk or size as them, but that is exactly the same rationale for why we're in the U.S., and why we think there's a multiple turn uplift coming for our shares, because of the fact that we're going to be exposed to new U.S. investors. As I mentioned, we're listed on the New York Stock Exchange. We did that in December. We did that with zero capital raise. Wasn't an IPO. We did not place any new shares in the U.S. We strictly showed up one day and said, "We're listed on the New York Stock Exchange," after paying, of course, a fee to do that, 'cause nothing's for free. But what that's seen is solving a liquidity problem, right? When we're a $650 million market cap company in the U.K., trading less than $1 million of notional value, that's a challenge. We've rectified that materially by just this listing and by Russell 2000 indexation, where now, on any given day between the two markets, we trade between $8-$10 million of notional value. I'm gonna start and touch on a different component here, but I think it's important to really what the company is trying to do for the long term, and more importantly, helps describe the infrastructure that we've put in place. We are a solutions-based provider for the natural gas industry, and we are taking what I characterize as a modern field management philosophy or the oil and gas Field Management 2.0, right? These mature producing assets, as I mentioned, they're not bad assets. They've just not been a focus, and by leveraging technology investments, we have been able to really manage these in a different way than they historically have been. We have real-time monitoring of these assets, not only from an emissions profile, but from a production profile. This allows us to kinda have end-to-end, whether I'm sitting in the field in a truck as an operator or in the boardroom. We have wellhead to boardroom real-time data and analytics that allow us to understand the profitability, the productivity, and the cost structure of these assets, and really look at them and say, "What is the best course of action for how we're optimizing the production?" This kind of just delves into a little bit more. What you see down there on the bottom left is one of our centralized monitoring facilities. So we've got, you know, all-day, all-night monitoring of all these assets. It mitigates some of the risk profile there. We know in real time if there's an outage or a pipeline disruption or something that's going on. We're able to capture all this data at the well level and utilize that data, again, for high-level analytics and understand the profitability of those wells. One of the other tools that we utilize is something that we coined as Smarter Asset Management. When you look at these mature producing assets, as I mentioned, they're not bad assets. My analogy that I usually use is if you have a car that's sitting in someone's garage that they haven't touched for ten years, haven't changed the oil, haven't changed the battery, probably haven't kicked the tires, doesn't mean that that car is not going to run, but what it means is it's not going to run efficiently. It's not gonna be cost-effective. You're probably gonna have to do some care and maintenance, just like you would, you know, typical oil change. That's what Smarter Asset Management is, focusing on these assets, managing them in a better way, giving them the care and maintenance that they need, because these are assets that produce in perpetuity for 50-75 years. And now, under our infrastructure and under our umbrella, they are managed in a more efficient, stewardship, and reliable manner. As I mentioned about, you know, emissions, this is an important slide, you know, again, highlighting the fact of what we've done from an emissions protocol, and what we've actually utilized from some of that, whether it's remote monitoring, aerial Lidar, making conversions on pneumatics that no longer will emit. All of that has given us the gold standard from the United Nations Oil and Gas Methane Partnership. And for those unfamiliar with that, that is the... what I would characterize, it's the global standard. It's the same thing that Exxon, BP, TotalEnergies utilize, and we have gotten that not only from our track record that you see here, but for the path that we have moving forward on how we are going to manage these assets, because that's part of that whole rating. All of our emissions are assured by a third party, and we provide all the data and the necessary information to that standardized protocol that allows us to get that gold standard. We've done that for two years running, and we anticipate it continuing into the future. It is a really important aspect of our business when you look at the U.K. component, right? Or the European component. They are obviously, you know, investors over there are highly focused on it. Our ESG report, and I highly encourage for those who are interested to visit our website. It has won the ESG report for the past two years running in Europe, and that's a report that is graded on by European investment analysts, European environmental rating agencies. So it's very robust, extremely transparent, and it's allowed us to really be in a good position with U.K. investors and allowed us to really have an MSCI AA rating, which is almost the highest rating you could have. For E&P companies, most of them are not in that same realm, but we've been able to accomplish that. One of the other aspects, as I mentioned, we manage these assets from production all the way through to the end of life. We've stood up within Diversified a full-on asset retirement company called Next LVL. Why is this important? Obviously, with a lot of wellbores and a lot of mature production, at some point, there becomes a time to retire those wells. Rather than paying a third-party provider, we basically, again, hearkening back to that vertical integration, we've brought in all of that in-house, stood up this company, reduced the cost structure, reduced the overall liability on the balance sheet of that ARO by having a low cost. We're retiring over double the amount of assets or wells from a regulatory basis that we need to in those three states that I highlighted in Appalachia, specifically, Ohio, West Virginia, and Pennsylvania. But not only that, the business that we've stood up provides third-party revenue generation. So last year, the retirement cost for our own wells was roughly about $24,000 a well. If you take the offset from not only the revenue, but ultimately the income that we provided, that was provided by these third-party retirements, it basically takes that number down to three thousand, right? So it is a meaningful component of how we will reduce our liability over time. More importantly, we are providing a solution. The majority of those third-party wells are for the state orphan well programs, and as some of you might recognize, orphan wells in the energy space are a big hot topic, and we are providing them an economic, cost-effective, and environmentally safe, sound solution to retire those wells. By doing that, it also allows us to have extremely good working relationships with those regulators. As an example, the state of Ohio, who has been relatively front foot and proactive on their asset retirement program and actually have a fenced-off pool of money, the ODNR, which is their governing body, we actually got a contract from them to administer and help plan their orphan well program. That brought in additional, you know, cash flow for the bottom line. So what does this all mean for at the end of the day? Coming full circle back to the slide. What are we doing as a company, right? This infrastructure, this component, we're scaling a differentiated business model, a business model from where we sit today where we believe we could manage three, four X our production size with little to no incremental G&A. We're delivering shareholder benefits by giving a capital return protocol of share repurchases and dividend re. We are employing modern field management technology, basically taking what would be the old dirty well, per se, and taking it and managing it in a much more efficient manner, and we're creating stewardship by doing that, and through our well retirement, through our emissions program, really taking this area of the market, as I mentioned, which is 10% or more of the daily production of the United States, and looking at it in a different way. We're the only public company that's doing it, and that's why we're the right company at the right time. So I'm gonna pause there. As I mentioned, I was trying to be efficient with everyone's time at the end of the day, and I'll open up to any questions that anyone might have. Sir? Do any of your properties you acquire ever have lake acreage that needs to be developed, and how do you handle that? That's a great observation. So, yes, the answer is yes. So with each of these asset packages, that we buy, what we're looking at is the PDP value. So what is the proved developed producing? What is the cash flow at the end of the day of those assets? But these, the three main sellers of those assets are private equity firms looking to get out of a, a development company asset that they might have had, that, you know, they might be on year eight or nine of what was supposed to be a three-to-four-year investment. Majors, for example, ConocoPhillips, we bought some assets in Oklahoma from ConocoPhillips. That came with a number of wells that were in that protocol, but also undeveloped acreage. Or distressed sellers, right? Companies that might have gotten into over-levered or distressed areas. Those assets all come with midstream assets, undeveloped acreage, processing facilities. Those three things we don't pay for in our valuation, and we stick to that knitting, really, at the end of the day in our valuation construct. Sometimes when prices are high, it's higher, it's harder to negotiate. In two thousand and twenty-two, when gas prices were high, there was a lot of second-guessing by some of those developers. But we did not make any acquisitions during that time. But staying disciplined and true to that strategy of what we're trying to do, is creating value. I would point you to our corporate deck or our earnings presentation that we had, a couple of weeks ago when we announced our second quarter earnings or mid-year earnings. We highlighted Oklahoma as an example. So we are. There's a development play that's emerging there called the Cherokee. We up until one point last year were the largest landowner in Oklahoma. We've been selling acreage on average for the past six months for $1,100 an acre. So I'll let everyone kind of do their own math of how they think about that, but that is hidden value that's in our portfolio, not accounted from an NAV perspective, not accounted from a cash flow perspective, from a modeling perspective. So when you think about that, that's one way, by just selling it outright. The other way that we look at it is, are there opportunities for joint development, where, again, we contribute acreage that we paid zero for, bringing in a partner to develop that acreage? You kind of got a hint of that with this last announcement that we had last week. We brought in a partner on this East Texas acreage. They actually bought the development acreage that we had. They paid for that, and we just paid for the PD. So we partnered up with them. They took that, but they're actively developing that area where that package was a bolt-on for us, so there's opportunity to do that same thing going forward. So thank you for the question because it's a very important point. When you sell off the properties, do you retain a royalty or no? Some of them, like for example, this last acquisition that we made, when we did that, we retained a small component, 5%, right? Most of the time, with some of the stuff we've done in Oklahoma more recently, we don't, right? Because, you know, there's another component when it comes to, one of the things that we have gotten in the portfolio, but we've divested from as well, is non-op. So for those familiar, you know, if there's acreage where you've got a non-op position, unfortunately, what happens for us is because our cost structure is so good, that non-op acreage that we get usually has a higher cost structure, and more importantly, an unpredictable and inflexible cost structure. So when we sold off that non-op position last year, we actually improved our overall cost structure on a per-unit basis because we can't control what that cost structure looks like. Thank you for the questions. Another? Yes, in the back of the room. Are you generating this free cash flow on an operating basis, or is it primarily through hedges at much higher prices than the current spot? It's both. So I mean, the hedges protect where we are, right? Right now, we're hedged slightly above where the strip is, but there's also a component of that cash flow that comes that's unhedged, right? So that unhedged component brings in cash flow as well. So it's a combination of both, but the hedging we really view as a risk mitigation tool, but as a tool to lock in those 50% margins in any commodity price environment. So what I always tell investors is, if you're looking for a new, innovative, technology-savvy company in the energy space, that is giving you exposure to energy, and candidly, the energy transition, without commodity price or development risk, as a small cap investor, this is a good product for you. So what's that price that you're getting these days? It's roughly about in 2025 $3.40 per MCF on a MCFE basis. Now, as I mentioned, the vast majority of our production is natural gas, but we do have a little bit of oil, some NGLs. In that Oklahoma or Central Region, it's closer to a third, a third, a third, right? When you think about the product streams. In Appalachia, it's predominantly natural gas, 95-plus natural gas. Go ahead. Are you hedged out into, like, 2025? We're hedged out, and some of this material is on our website as well, and in our corporate presentation. We're hedged out. We've got hedges as long as 2028. And part of that comes from that ABS structure, right? Because of the fact that we're utilizing those ABSs, the buyers of those are insurance companies. They're sculpted around where the cash flows and where the curve is, and so they like to see in those near term, more hedges. But even as you go out and as the ABS pays down, right, as you're amortizing that, and it gets closer and closer to having, you know, little to no principal, there's a lighter degree of hedging. But we generally, when we put on one of those positions for an ABS, we go out as much as seven years. You know, and there's a varying degree of, you know, swaps versus collars. Tend to use more of the collars out, 'cause that gives us a little bit exposure to the upside. One more? Yeah. Do you plan on divesting from London, or? No, I would not say that at all. No. So I think, you know, we, we've got a very good... candidly, what I would characterize as a, as a investor relations officer, a blue chip register of investors, many of which, and I would say some of the top, in the top five or top 10, have literally been with the company from a $50 million IPO, right? $50 million IPO. So they are loyal investors. They like our business model. They like the cash flow and the consistency of that cash flow that we generate. So I don't see us, at least at this time, completely delisting from that market. But I, what I will say is there is an evolution, you know, given that, that optic that I provided of, you know, less funds in the U.K., a bigger buyer pool in the U.S. We've seen it pretty meaningfully in a short period of time, with an increase in daily trading volume on the New York Stock Exchange, and more importantly, you know, an increase in investors. I would say prior to us having the New York Stock Exchange listing, the U.S. investors owned 12-15% of the outstanding shares. Today, as of the, you know, the quarter end or the second quarter end, it's closer to 33-35%. So that natural evolution will happen.