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DEC: The Only Publicly Traded Champion of the PDP Subsector Energy First Quarter Results Presentation May 12, 2025 Optimized
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The information contained in this document (the "Presentation") has been prepared by Diversified Energy Company PLC (“Diversified” or the "Company”). This Presentation is for general information purposes only and does not constitute an invitation or inducement to any person to engage in investment activity. While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. This Presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and business of the Company and its wholly owned subsidiaries (the “Group”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect", "may", "will", "seek", "continue", "aim", "target", "projected", "plan", "goal", "achieve" and words of similar meaning, reflect the Company's beliefs and expectations and are based on numerous assumptions regarding the Company's present and future business strategies and the environment the Company and the Group will operate in and are subject to risks and uncertainties that may cause actual results to differ materially. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Company or the Group to be materially different from those expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's or the Group's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as the Company's or the Group's ability to continue to obtain financing to meet its liquidity needs, the Company’s ability to successfully integrate acquisitions, changes in the political, social and regulatory framework in which the Company or the Group operate or in economic or technological trends or conditions. The list above is not exhaustive and there are other factors that may cause the Company's or the Group's actual results to differ materially from the forward-looking statements contained in this Presentation, Including the risk factors described in the “Risk Factors” section in the Company’s Annual Report and Form 20-F for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission. Forward-looking statements speak only as of their date and neither the Company nor the Group nor any of its respective directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this Presentation may not occur. As a result, you are cautioned not to place undue reliance on such forward- looking statements. Past performance of the Company cannot be relied on as a guide to future performance. No statement in this Presentation is intended as a profit forecast or a profit estimate and no statement in this Presentation should be interpreted to mean that the financial performance of the Company for the current or future financial years would necessarily match or exceed the historical published for the Company. This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. The distribution of this Presentation in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions. Any failure to comply with such restrictions may constitute a violation of the laws of the relevant jurisdiction. Certain key operating metrics that are not defined under IFRS (alternative performance measures) are included in this Presentation. These non-IFRS measures are used by us to monitor the underlying business performance of the Company from period to period and to facilitate comparison with our peers. Since not all companies calculate these or other non-IFRS metrics in the same way, the manner in which we have chosen to calculate the non-IFRS metrics presented herein may not be compatible with similarly defined terms used by other companies. The non-IFRS metrics should not be considered in isolation of, or viewed as substitutes for, the financial information prepared in accordance with IFRS. Certain of the key operating metrics set forth [below][in this Presentation] are based on information derived from our regularly maintained records and accounting and operating systems. The financial information in this Presentation does not contain sufficient detail to allow a full understanding of the results of the Company. Please refer to the full results announcement for more detailed information. It is our intention that all of the information provided during this Presentation or in any follow-up discussion will either be publicly available information or, if not publicly available, information that we do not believe constitutes inside information or material non- public information about the Company. However, you are under an obligation to assess independently for yourself whether you are in possession of inside information, and when you cease to be in possession of inside information. 2May 2025
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3May 2025 a) Share repurchases include the value of shares repurchase through Diversified announced Share Repurchase Program and the value of shares purchased by Diversified’s Employee Benefit Trust (the “EBT”). b) Value of completed acquisitions based on the on previously announced gross valuation, includes the Summit Natural Resources and Maverick Natural Resources acquisitions closed in first quarter of 2025. EXECUTING ON OUR STRATEGY- CREATING VALUE IN Q1 2025 Fixed per-share Dividend Strategic Share Repurchases Accretive Acquisitions Systematic Debt Reduction $51 million of debt principal payments ~$40 million in Dividend Distributions ~$18 million value of shares repurchased(a) ~$2 billion of recently completed acquisitions(b) Total stakeholder returns since 2017 IPO include $1.8 billion in shareholder returns and debt principal payments
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4May 2025 RELENTLESS FOCUS ON INCREASING VALUE a) Excludes certain amounts relating to Diversified's wholly owned asset retirement subsidiary, Next LVL Energy. Please refer to the Company’s RNS announcement on May 12, 2025 for more information. b) Calculated as Q1 2025 Adjusted Free Cash Flow divided by Q1 2025 Adjusted EBITDA. Financial & Operating Highlights Q1 2025 Exit Rate Production of 1,149 MMcfe/d • First Quarter 2025 average production of 862 MMcfe/d • Maintained consolidated production decline of ~10% per year Q1 2025 Total Revenue, Inclusive of Hedges of $295 million • Total Revenues per Unit of $3.82/Mcfe(a) • 2024 Net Loss of $87 Million, Including $141 million of mark-to-market losses Recorded Adjusted EBITDA of $138 Million • 47% Adj. EBITDA margin consistent with strong track record of cash generation(a) • Relatively consistent margins during early-stage integration & synergy capture Generated $62 Million of Free Cash Flow • Operating Cash Flow of $132 million • Significant Free Cash Flow conversion rate of 45%(b) Return of $59 Million to Shareholders • Repurchased ~$18 million of shares during recent market dislocation • Over $40 million of dividends paid and declared in 2025 Strengthened Balance Sheet with $451 million of Liquidity • New $900 million credit facility and reduced 2025 Amortization by ~15% • Significant Free Cash Flow conversion rate of 45%(b)
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5May 2025 a) Adjusted Free Cash Flow Calculated as Free Cash Flow, inclusive of the cash proceeds received through divestiture of undeveloped leasehold; Free Cash Flow defined as Cash Flow from Operations, net of Interest Expense and Capital; Free Cash Flow is a non-IFRS measure. Please refer to the Appendix for a reconciliation of Free Cash Flow to its nearest IFRS measure. ACQUISITION DRIVES SIGNIFICANT FREE CASH FLOW GROWTH Benefits of Low Declines Differentiated, industry-low corporate declines reduce capital intensity and benefits cash generation Complementary Cash Flow Profiles Robust and sustainable cash flow profiles from Diversified and Maverick provide platform for continued value creation Additional Upside Through Synergies Identified expense efficiencies drive sustained increased free cash flow generation Commodity Diversification and Hedging Balanced weighting of gas and liquids revenues, combined with geographical diversification insulates realized pricing $212 $420 2024 Reported 2025 Guidance Adjusted Free Cash Flow(a) (USD Millions) ~200%
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6May 2025 COMMITTED TO DELIVERING A FOUNDATION OF FREE CASH FLOW Source: Factset, Company Data; Natural Gas E&Ps Include: AR, CNX, CRK, EQT, EXE, GPOR, and RRC Free Cash Flow Conversion calculated as Free Cash Flow / Adj. EBITDA using reported figures for the quarter ended March 31, 2025. Free Cash Flow is defined as Cash Flow from Operations less CAPEX and Interest Expense. 45% 51% 42% 38% 34% 13% 2% DEC Nat Gas E&P A Nat Gas E&P B Nat Gas E&P C Nat Gas E&P D Nat Gas E&P E Nat Gas E&P F Nat Gas E&P G Free Cash Flow Conversion Quarter Ended March 31, 2025 Diversified leads Natural Gas E&Ps in Free Cash Flow conversion with 3x the peer group average and BETTER than companies with significantly larger market capitalization Low capital intensity of benefits long-term cash flow conversion PDP-focused operations sustain cash flows and limit capital expenditures Fixed-rate, investment grade debt reduces financing cost, interest expense
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7May 2025 QUICKLY ESTABLISHING POST-ACQUISITION EFFICIENCIES Leveraging Scale for Meaningful G&A Efficiencies Full field level integration anticipated by end of second quarter; technology & administrative by end of third quarter Driving Operating Cost Reductions with Asset Density Leveraging economies of scale to improve commercial terms across operations Developing Line-of-Sight to Further Synergies Identification of further potential for synergies and cost reductions likely to occur during the integration process $1.79 $1.43 $1.28 $1.15 2017 2018 2019 2020 Adj. Operating Cost per Unit ($/Mcfe) Historical Synergy Capture in Appalachia Reduced adjusted operating cost per unit by 35% in four years Progress of Synergy Capture & Opportunities High-grade staffing and reduced redundancies Contract savings providing material impacts in compression and chemicals costs Achieved In Progress Recurring & duplicative IT services Beneficial marketing & processing contracts Lease and rent reduction or elimination Best practices and procedures to drive efficiency Acceleration of tax benefit attributes
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8May 2025 3.7x 4.0x 4.1x 4.4x 4.6x 5.6x 5.6x 5.7x 6.5x 6.7x 7.2x 7.5x DEC Peer A Peer B Peer C Peer D DEC Avg Peer Avg Peer E Peer F Peer G Peer H Peer I Diversified Energy Trading at ~34% Discount To 5Yr Avg and Avg Peer Multiple Synergies of $50 million and liquids margin enhancement drive the potential of additional EBITDA and Multiple increase above AVG. Source: Company Data; FactSet as of 3/10/2025; Peers include AR, BKV, CNX, CRK, EQT, EXE, GPOR, INR and RRC. Note: DEC calculated using current enterprise value and 2025 EBITDA Guidance of ~$850 million, Peers reflecting consensus EV/EBITDA for the 2025 reporting year. TRANSFORMATIVE VALUE PROPOSITION Unique Opportunity for Equity Upside via Multiple Re-rate EBITDA Multiple vs Peers (x)
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9May 2025 Guidance range for 2025 includes partial-year contribution of Maverick Natural Resources for the nine-months through December 31, 2025 Pro Forma commentary incorporates the annualized impact of the partial-year contribution of the Maverick Natural Resources acquisition A POWERFUL STEP FORWARD- 2025 COMBINED COMPANY OUTLOOK 2025 Guidance Range(a) 2025 Pro Forma Commentary(b) Low High Total Production (Mmcfe/d) 1,050 1,100 Pro Forma midpoint production guidance of ~1,150 MMcfe/d (including full-year impact of Maverick acquisition) % Liquids 25% % Natural Gas 75% Adj. EBITDA (millions) $825 $875 Pro Forma midpoint production guidance of ~$925 million (including full-year impact of Maverick acquisition)Capital Expenditures (millions) $165 $185 Free Cash Flow (millions) ~$420 Leverage Target 2.0x 2.5x Anticipated Annualized Synergies (millions) >$ 50 Prioritizing Free Cash Flow with the Flexibility to Allocate Across the Highest & Best Uses of Capital to Create Long-Term Shareholder Value
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10May 2025 THE PUBLICLY TRADED CHAMPION OF THE PDP SUBSECTOR Diversified’s Unique Value-Creation Levers Significant Scale of PDP Operations Extensive Vertical Integration Leading Technology Platform Beneficial Financing Solutions Flexible Capital Allocation Proven Synergy Capture Dynamic Multi-Basin Rollup Strategy Extensive operational footprint establish platform to capture value by acquiring assets at attractive valuations throughout E&P capital cycles Distinctly Efficient PDP Operations Vertically integrated operating, marketing, midstream and retirement capabilities enhance margins and increase allocable capital Demonstrated Commitment to Returns Returns-focused model prioritizes Free Cash Flow for debt reduction, dividend payments, share buybacks and accretive acquisitions Differentiated Sustainability Platform Smarter Asset Management and emissions mitigation initiatives maximize production volumes and enable best-in-class sustainability reporting
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div.energy Corporate 1600 Corporate Drive Birmingham, Alabama 35238-1087 (USA) div.energy cwsmith@dgoc.com Wren Smith Senior Manager Investor Relations cwsmith@dgoc.com +1 205 315 0553 dkris@dgoc.com Douglas Kris Senior Vice President Investor Relations & Corporate Communications dkris@dgoc.com +1 973 856 2757