REG - Diversified Energy - Interim Results for the 6 Months Ended 30 June '22

Diversified Energy CoAnnouncement

08/08/2022 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220808:nRSH1700Va&default-theme=true

RNS Number : 1700V  Diversified Energy Company PLC  08 August 2022

8 August 2022

 

Diversified Energy Company PLC

("Diversified," "DEC" or the "Group")

 

 

Interim Results for the Six Months Ended 30 June 2022

 

Diversified Energy Company PLC (LSE: DEC) is pleased to announce its Interim
Results for the six months ended 30 June 2022 and other recent highlights.

 

Period Highlights

•     Declared 2Q22 interim dividend of $0.0425 per share (2Q20: $0.0400
per share, +6%)

•     Paid $72 million of dividends to shareholders

•     Record average net daily production: 136 MBoepd (+29% vs 1H21: 106
MBoepd), exit rate of 139 MBoepd

•     Maintained industry-leading consolidated corporate decline rate of
~8.5%((a))

•     Achieved 1H22 Adjusted EBITDA((b)) of $224 million (+48% vs 1H21:
$151 million) with Cash Margin((c)) of 48%

•     Net Loss of $935 million which includes $1.2 billion (pre-tax) of
non-cash hedge valuation losses

•     Free Cash Flow Yield((d)) of 22%

•     Leverage ratio of 2.2x((e)) (Adjusted Net Debt of $1.1
billion((e)))

•     Completed $970 million in Asset Backed Securitisations ("ABS") at
a blended fixed rate of 5.3%((f))

•     Liquidity of ~$469 million

•     Closed ~$60 million in complementary Central Region upstream and
midstream acquisitions((g))

•     Recently announced $240 million (gross) upstream acquisition from
ConocoPhillips in Central Region

 

Environmental, Social and Governance ("ESG") Highlights

•     Completed ~90% of the upstream surveys reporting no detectable
emissions (~49,000 unique inspections)

•     Completed ~40 % of midstream emissions aerial surveys (~6,000
miles)

•     Expanded asset retirement programme includes 15x more rigs (FY21:
1) through three recent acquisitions

•     Permanently retired 90 wells in Appalachia at an average cost of
~$21 thousand per well

•     Established Gold Standard pathway after joining Oil & Gas
Methane Partnership 2.0 ("OGMP") in 1H22

 

 

Commenting on the results, CEO Rusty Hutson, Jr. said:

"During first half of 2022, we continued to expand our successes by delivering
on a number of key strategic initiatives in line with our long-term growth
strategy. Our recent accretive acquisition of low decline, high margin
upstream assets complements our existing Central Region operations, allowing
us to build scale, improve margins and harvest synergies. In Appalachia, our
acquisition and vertical integration of multiple plugging companies expands
our asset retirement programme to 15 plugging rigs and enables us to achieve
our target of plugging 200 wells per year, while also reducing our effective
retirement costs as we earn revenue by retiring wells for others."

 

"We remain committed to tangible shareholder returns, and are delighted to
once again declare an additional $0.0425 dividend of the second quarter, which
will add ~$36 million to the  more than $72 million we already have paid so
far this year. Our balance sheet remains healthy as we continue into the
second half of 2022 with ample Liquidity, cash generation and financing
capacity to fund further complementary growth opportunities."

 

"Importantly, in addition to the expansion of our asset retirement teams, we
continue to make significant progress on a number of focused ESG initiatives,
having surveyed over ~49,000 unique wells and flown over 6,000 miles of our
midstream assets. This progress is consistent with our 2022 target of ~5-10%
methane emissions reduction and with our longer term 2026, 2030 and 2040
targets. Our OGMP partnership further affirms our commitment to these
initiatives with a pathway to Gold Standard reporting by 2023."

 

 

Posting of 2022 Interim Results Report and Presentation

Diversified has published the Company's 2022 Interim Report on it's website at
https://ir.div.energy/financial-info (https://ir.div.energy/financial-info)
and has also made available a supplementary 2022 Interim Results Presentation
at https://ir.div.energy/presentations (https://ir.div.energy/presentations) .

 

 

Conference Call

DEC will host a conference call today at 8:00am BST (3:00am EST) to discuss
these results. The conference call details are as follows:

 

 US (toll-free)      +                                      1 877 836 0271
 UK (toll-free)      +                                      44 (0)800 756 3429
 Web Audio           https://www.div.energy/news-events/ir-calendarevents
                     (https://www.div.energy/news-events/ir-calendarevents)
 Replay Information  https://ir.div.energy/financial-info (https://ir.dgoc.com/financial-info)

 

 

Footnotes:

 a)  Calculated as the change in exit rate as previously announced for December
     2021 to June 2022, adjusted for the impact of recently acquired East Texas
     assets and increases to production in the Central Region due to previously
     in-process development projects associated with the Tapstone acquisition
 b)  As used herein, Adjusted EBITDA represents earnings before interest, taxes,
     depletion, depreciation and amortisation, and includes adjusting items that
     are comparable period-over-period, non-cash items such as gains on the sale of
     assets, acquisition related expenses and integration costs, mark-to-market
     adjustments related to Diversified's hedge portfolio, non-cash equity
     compensation charges and items of a similar nature
 c)  As used herein, Cash Margin is measured by reducing Adjusted Total Revenue for
     operating expenses and Adjusted G&A, expressed as a percentage of Adjusted
     Total Revenue; Adjusted Total Revenue calculated as Total Revenue and the
     applicable gain (loss) on settled derivative instruments during the period
 d)  As used herein, Free Cash Flow Yield represents Free Cash Flow as a percentage
     of Diversified's average total market capitalisation for the six months ended
     30 June 2022
 e)  Calculated as Adjusted Net Debt divided by Pro Forma Adjusted EBITDA; Adjusted
     Net Debt calculated as 30 June 2022 reported Net Debt of $1,150MM adjusted for
     the impact of working capital; Pro Forma Adjusted EBITDA as reported for the
     twelve months ended 30 June 2022, including the unrealised impact of estimated
     NTM Adjusted EBITDA for previously announced acquisitions for the twelve
     months ended 30 June 2022
 f)  Calculated using the weighted average of original issue values using
     applicable rates as previously announced and included in the Company's 2022
     Interim Report
 g)  Includes previously announced upstream assets within East Texas, net of
     Oaktree Capital Management's participation, and midstream assets within East
     Texas acquired in April of 2022

For Company-specific items, refer to the Glossary of Terms and/or Alternative
Performance Measures found in the Company's 2022 Interim Report

 

 

For further information, please contact:

 

 Diversified Energy Company PLC            +   1 (205) 408 0909
 Doug Kris
 www.div.energy (https://www.div.energy/)
 ir@dgoc.com

 FTI Consulting
 Us & UK Financial Public Relations
 DEC@fticonsulting.com

 

About Diversified Energy Company PLC

 

Diversified Energy Company PLC is an independent energy company engaged in the
production, marketing and transportation of primarily natural gas related to
its synergistic US onshore upstream and midstream assets.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IR UPURWRUPPGBM