REG-Diversified Energy Reports Strong Second Quarter Results Highlighting Consistent Cash Margins, Year-over-Year Growth, and Disciplined Execution of Maverick Acquisition Integration
Mon 07:02
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Non-Op Development Partnership Generating Over 60% Returns with Minimal
Capital Spend that Delivers an Improving Corporate Decline Rate
Portfolio Optimization Program Contributed $70 Million in Cash Flow
Year-to-Date
Returned Over $105 million to Shareholders Year-to-Date Through Dividends and
Share Repurchases
On Track to Achieve Full-Year 2025 Guidance
BIRMINGHAM, Ala., Aug. 11, 2025 (GLOBE NEWSWIRE) -- Diversified Energy Company
PLC (LSE: DEC, NYSE: DEC) today announced its interim results for the six
months ended June 30, 2025, reporting performance in line with expectations
and highlighting key strategic and financial achievements.
Delivering Reliable Results and Strategic Growth as the U.S. PDP Champion
Second Quarter 2025 Results
(Second Quarter Results Reflect Full Quarter Impact of the Acquisition of
Maverick Natural Resources)
* Production exit rate((a)): 1,135 MMcfepd (189 Mboepd) * Average production:
1,149 MMcfepd (192 Mboepd)
* Production volume mix (natural gas, NGLs, oil): 73% / 13% / 14%
* Total Revenue (including settled hedges)((d)): $510 million
* Operating Cash Flow: $133 million
* Adjusted EBITDA((b)): $280 million
* Free Cash Flow: Adjusted Free Cash Flow((c)) of $88 million after $25
million of nonrecurring transaction costs * Annualized Adjusted FCF Yield((c))
of 31%
* Revenue per unit((d)): $4.88/Mcfe ($29.28/Boe)
* Adjusted cost per unit((e)):$2.21/Mcfe ($13.26/Boe)
First Half 2025 Results
* Average production: 1,007 MMcfepd (168 Mboepd) * Production volume mix
(natural gas, NGLs, oil): 77% / 13% / 10%
* Total Revenue (including settled hedges)((d)): $804 million
* Operating Cash Flow: $264 million
* Adjusted EBITDA((b)): $418 million
* Free Cash Flow: Adjusted Free Cash Flow((c)) of $152 million after $28
million of nonrecurring transaction costs
* CAPEX: $89 million * Non-Op drilling expenditures weighted more in Q2;
full-year Capex trending toward low end of guidance
* Revenue per unit((d)): $4.41/Mcfe ($26.46/Boe)
* Adjusted cost per unit((e)): $2.11/Mcfe ($12.66/Boe)
Improving Financial and Operational Metrics
1Q25 2Q25 QoQ % Change 1H24 1H25 YoY % Change
Production (Mmcfe/d) 864 1,149 33% 746 1,007 35%
Production volume mix
Natural gas 82 % 73 % 84 % 77 %
NLGs 12 % 13 % 13 % 13 %
Oil 6 % 14 % 3 % 10 %
Total Revenue ((d) )(millions) $294 $510 73% $449 $804 79%
Adj. EBITDA ((b) )(millions) $138 $280 103% $218 $418 92%
Adj. FCF ((c) )(millions) $64 $88 38% $102 $152 49%
Financial Strength and Shareholder Returns
* Liquidity: $416 million of undrawn credit facility capacity and unrestricted
cash
* Leverage ratio: 2.6x Net Debt to EBITDA; ~13% improvement from YE2024 *
Consolidated debt consists of ~70% in non-recourse ABS securities
* ABS principal reduction: Retired $130 million in principal during 1H25
* 2Q25 dividend: $0.29 per share declared
* Shareholder returns: Over $105 million returned YTD via dividends and
repurchases((f))
* Share repurchases: ~3.3 million shares repurchased YTD (~4% of outstanding
shares), totaling ~$43 million((f))
Strategic Execution and Transformational Growth
* $2 Billion Carlyle Partnership * Strategic partnership to invest up to $2
billion in existing U.S. proved developed producing (PDP) oil and gas assets
* Capitalizes on industry consolidation trends and divestitures of mature
producing assets
* Non-dilutive structure preserves capital flexibility and supports long-term
growth
* Enhances Diversified’s stature as a leading consolidator of upstream PDP
assets
* Maverick Integration Update * Increasing annualized synergy target to $60M
from previously stated $50M, following strong execution during our integration
process
* Efficiency gains through staffing optimization, contract savings, and
midstream cost reductions
* Field-level integration completed in Q2
* Technology and administrative integration are on track for 3Q25 completion
* Unlocking Value Through Portfolio Optimization * Portfolio optimization
program realized ~$70 million from non-core asset and leasehold divestitures
* Joint Development Partnership continues to produce >60% IRRs with 124 wells
drilled under the JDA in the last 3 years * The program highlights optionality
in DEC’s portfolio to monetize Central Region acreage via non-op drilling or
leasehold divestitures
* Oklahoma midstream transaction provides a no-fee whole-owned pipeline,
compression efficiencies, emissions improvement and numerous production
optimization projects
* East Texas portfolio optimization yields incremental cash flow via gathering
and processing dedication fees, with potential to increase Black Bear facility
throughput to current full capacity of 120 MMcf per day
* Revenue of ~$6.6 million through June 2025 from Coal Mine Methane (CMM)
associated environmental attribute credits * Remain on track to grow
environmental credit cash flow by 300% from YE 2024 levels
* Next LVL Energy and Regulatory Updates * In the first half of 2025, the
Company permanently retired 213 wells, including 170 Diversified wells
* Since establishment of Next Level in 2022, Diversified has retired 1,112
wells
Rusty Hutson, Jr., CEO of Diversified, commented:
“Diversified continues to deliver consistent returns on our assets, along
with the expansion of our asset portfolio, reinforcing our position as the
U.S. PDP Champion. Our strong first-half performance reflects the resilience
of our business model, the quality of our assets, and the dedication of our
talented teams. With the successful integration of Maverick progressing on
schedule, we are already realizing meaningful synergies and operational
efficiencies that enhance our ability to optimize cash flow in our expanded
portfolio and drive long-term value from our investments.
The strategic partnership with The Carlyle Group marks a transformational
milestone for Diversified. This $2 billion commitment underscores confidence
in our platform and provides significant capital flexibility to capitalize on
the ongoing consolidation of mature producing assets. It also strengthens our
ability to scale responsibly, in a non-dilutive manner, while preserving our
disciplined approach to capital allocation.
We remain focused on unlocking value across our portfolio through asset
optimization, which resulted in approximately $70 million of additional cash
flow, high return projects with our targeted capital investments, and the
continuation of portfolio optimization through Smarter Asset Management (SAM)
programs. Our NextLVL team’s industry-leading pace of asset retirements and
regulatory advancements in West Virginia highlights our commitment to
collaborating across our organization and with key stakeholders to solidify
our commitment to sustainable operations.
As we look ahead, the mega trends of electrification, AI power demand, and US
LNG Export growth only strengthen the fundamental outlook for our business.
The acceleration of natural gas generation for data center demand in
Appalachia creates a line of sight to meaningful in-basin demand, pointing to
tighter basis spreads near our footprint in the coming years. While our
expansive central region operations are well-positioned to support US Energy
dominance in the Gulf Coast, including as a strategic supplier to LNG export
terminals.
Given Diversified's continued operational excellence, fundamental market
tailwinds, and strategic actions to optimize our portfolio of assets, we
remain confident in our ability to continue delivering consistent and
resilient free cash flow, maintaining a strong balance sheet, and returning
meaningful capital to shareholders. Diversified is well-positioned to thrive
as a proven portfolio manager of energy assets in today’s evolving energy
landscape, and we are proud to be the Right Company at the Right Time,
delivering essential energy while creating long-term value for all
stakeholders.”
Operations and Finance Update
Production
The Company recorded exit rate production in June 2025 of 1,135 MMcfepd (189
Mboepd)((a)) and delivered 2Q25 average net daily production of 1,149 MMcfepd
(192 Mboepd). The Company's production volume mix was approximately 73%
natural gas, 13% natural gas liquids ("NGL's"), and 14% oil, with
approximately 64% of production volumes from the Central region and 36% from
Appalachia for the second quarter. Net daily production for the quarter
continued to benefit from Diversified’s peer-leading, shallow decline
profile.
Margin and Total Cash Expenses per Unit
Diversified delivered 2Q25 per unit revenues of $4.88/Mcfe((d)) ($29.28/Boe)
and Adjusted EBITDA Margin((b)) of 63% (65% unhedged). Notably, these per unit
metrics reflect an increase in both revenues and expenses from the
incorporation of greater liquids-related production of Maverick. The
Company’s per unit expenses are anticipated to improve as the Company
implements its playbook to achieve long-term, sustainable synergies and cost
savings. For example, General and Administrative expenses compared to prior
period levels, despite the higher per unit costs of Maverick, supporting our
progress on cost savings and synergy capture.
1Q25 2Q25 1H25 1H24
$/Mcfe $/Boe $/Mcfe $/Boe $/Mcfe $/Boe $/Mcfe $/Boe
Average Realized Price $3.57 $21.42 $4.05 $24.30 $3.84 $23.04 $3.05 $18.30
Other Revenue $0.19 $1.14 $0.19 $1.14 $0.19 $1.14 $0.18 $1.08
Total Revenue + Divestitures ((d)) $3.78 $22.68 $4.88 $29.28 $4.41 $26.46 $3.30 $19.80
Lease Operating Expense $0.91 $5.49 $1.21 $7.26 $1.08 $6.48 $0.66 $3.96
Production taxes $0.21 $1.26 $0.23 $1.38 $0.22 $1.32 $0.15 $0.90
Midstream operating expense $0.23 $1.38 $0.18 $1.08 $0.20 $1.20 $0.26 $1.56
Transportation expense $0.35 $2.10 $0.36 $2.16 $0.35 $2.10 $0.31 $1.86
Total Operating Expense $1.70 $10.23 $1.98 $11.88 $1.85 $11.10 $1.38 $8.28
Employees, Administrative Costs and Professional Fees ((g)) $0.30 $1.80 $0.23 $1.38 $0.26 $1.56 $0.30 $1.80
Adjusted Operating Cost per Unit ((e)) $2.00 $12.03 $2.21 $13.26 $2.11 $12.66 $1.68 $10.08
Adjusted EBITDA Margin ((b)) 47% 63% 56% 49%
Share Repurchase Program
At the 2025 Annual General Meeting, the Company's share repurchase authority
was approved for a maximum of 8,099,015 shares representing 10% of the
Company's issued share capital (the "2025 Authorization"). The Company
announced details regarding the parameters of a Share Buyback Program (the
"Program") on 20 March 2025, pursuant to which the maximum number of shares
repurchased shall not exceed 4,756,842 Shares under the Program. Following the
2025 Authorization, the Company announces that the maximum number of shares
repurchased under the Program shall be increased to, and shall not exceed,
8,099,015 shares. Year to date, the company has repurchased 3,273,466 shares,
representing approximately 4% of the shares outstanding.
Combined Company 2025 Outlook
The Company is reiterating its previously announced Full Year 2025 guidance.
Following the recently completed acquisition of Maverick, Diversified expects
to realize significant operational synergies associated with a larger,
consolidated position in Oklahoma and the ability to improve the overall cost
structure of the Maverick assets while continuing to prioritize returns and
Free Cash Flow generation.
The following outlook incorporates a nine-month contribution from the recently
acquired Maverick assets.
2025 Guidance
Total Production (Mmcfe/d) 1,050 to 1,100
% Liquids ~25%
% Natural Gas ~75%
Total Capital Expenditures (millions) $165 to $185
Adj. EBITDA (()(1) )(millions) $825 to $875
Adj. Free Cash Flow (()(1)) (millions) ~$420
Leverage Target 2.0x to 2.5x
Combined Company Synergies (millions) ~$60
((1))Includes the value of anticipated cash proceeds for 2025 asset optimization.
Conference Call Details
The Company will host a conference call today, Monday, August 11, 2025, at
1:00 PM GMT (8:00 AM EDT) to discuss the 1H25 Interim Results and will make an
audio replay of the event available shortly thereafter.
US (toll-free) +1 877-836-0271/+1201-689-7805
UK (toll-free) +44 (0)800 756 3429
Web Audio https://www.div.energy/news-events/ir-calendarevents
Replay Information https://ir.div.energy/financial-info
Footnotes:
((a)) Exit rate includes full month of June 2025 production.
((b)) Adjusted EBITDA represents earnings before interest, taxes, depletion, and amortization, and includes adjustments for items that are not comparable period-over-period; Adjusted EBITDA Margin represents Adjusted EBITDA as a percent of Total Revenue,
Inclusive of Settled Hedges.
((c)) Adjusted Free Cash Flow represents net cash provided by operating activities less expenditures on natural gas and oil properties and equipment and cash paid for interest, and includes proceeds from divestitures; For more information, please refer to the
Non-IFRS reconciliations as set out below.
((d)) Includes the impact of derivatives settled in cash and proceeds from divestitures; For purposes of comparability, excludes Other Revenue of $3 million in 1Q25, $3 million in 2Q25, $6 million in 1H25, and $8 million in 1H24, and Lease Operating Expense of
$3 million in 1Q25, $4 million in 2Q25, $7 million in 1H25, and $9 million in 1H24 associated with Diversified’s wholly owned plugging subsidiary, Next LVL Energy.
((e)) Adjusted Operating Cost represent total lease operating costs plus recurring administrative costs. Total lease operating costs include base lease operating expense, owned gathering and compression (midstream) expense, third-party gathering and
transportation expense, and production taxes. Recurring administrative expenses (Adjusted G&A) is a Non-IFRS financial measure defined as total administrative expenses excluding non-recurring acquisition & integration costs and non-cash equity
compensation; For purposes of comparability, excludes certain amounts related to Diversified’s wholly owned plugging subsidiary, Next LVL Energy.
((f)) Includes the total value of dividends paid and declared, and share repurchases (including Employee Benefit Trust) year-to-date, through August 11, 2025.
((g)) As used herein, employees, administrative costs and professional services represent total administrative expenses excluding cost associated with acquisitions, other adjusting costs and non-cash expenses. We use employees, administrative costs and
professional services because this measure excludes items that affect the comparability of results or that are not indicative of trends in the ongoing business.
For Company-specific items, refer also to the Glossary of Terms and/or
Alternative Performance Measures found in the Company’s Annual Report and
Form 20-F for the year ended December 31, 2024 filed with the United States
Securities and Exchange Commission and available on the Company’s website.
For further information, please contact:
Diversified Energy Company PLC +1 973 856 2757
Doug Kris dkris@dgoc.com
Senior Vice President, Investor Relations & Corporate Communications www.div.energy
FTI Consulting dec@fticonsulting.com
U.S. & UK Financial Public Relations
About Diversified Energy Company PLC
Diversified is a leading publicly traded energy company focused on natural gas
and liquids production, transport, marketing, and well retirement. Through our
unique differentiated strategy, we acquire existing, long-life assets and
invest in them to improve environmental and operational performance until
retiring those assets in a safe and environmentally secure manner. Recognized
by ratings agencies and organizations for our sustainability leadership, this
solutions-oriented, stewardship approach makes Diversified the Right Company
at the Right Time to responsibly produce energy, deliver reliable free cash
flow, and generate shareholder value.
Forward-Looking Statements
This announcement 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, business and outlook 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”,
“guidance” 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, including the
acquired Maverick assets, changes in the political, social and regulatory
framework, including inflation and changes resulting from actual or
anticipated tariffs and trade policies, 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 announcement, 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, 2024, 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 announcement, 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 announcement is intended as a profit
forecast or a profit estimate and no statement in this announcement 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.
Use of Non-IFRS Measures
Certain key operating metrics that are not defined under IFRS (alternative
performance measures) are included in this announcement. 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 are based on
information derived from our regularly maintained records and accounting and
operating systems.
Adjusted EBITDA & Pro Forma TTM Adjusted EBITDA
As used herein, EBITDA represents earnings before interest, taxes, depletion,
depreciation and amortization. Adjusted EBITDA includes adjusting for items
that are not comparable period-over-period, namely, finance costs, accretion
of asset retirement obligation, other (income) expense, (gain) loss on fair
value adjustments of unsettled financial instruments, (gain) loss on natural
gas and oil property and equipment, (gain) loss on sale of equity interest,
unrealized (gain) loss on investment, costs associated with acquisitions,
other adjusting costs, loss on early retirement of debt, non-cash equity
compensation, (gain) loss on interest rate swaps, and items of a similar
nature. Pro forma TTM adjusted EBITDA extends adjusted EBITDA by adjusting for
acquisitions or other significant changes that impacted EBITDA over the last
twelve months.
Adjusted EBITDA and pro form TTM adjusted EBITDA should not be considered in
isolation or as a substitute for operating profit or loss, net income or loss,
or cash flows provided by operating, investing and financing activities.
However, we believe such measure is useful to an investor in evaluating our
financial performance because it (1) is widely used by investors in the
natural gas and oil industry as an indicator of underlying business
performance; (2) helps investors to more meaningfully evaluate and compare the
results of our operations from period to period by removing the often-volatile
revenue impact of changes in the fair value of derivative instruments prior to
settlement; (3) is used in the calculation of a key metric in one of our
Credit Facility financial covenants; and (4) is used by us as a performance
measure in determining executive compensation. When evaluating this measure,
we believe investors also commonly find it useful to evaluate this metric as a
percentage of our total revenue, inclusive of settled hedges, producing what
we refer to as our adjusted EBITDA margin.
The following table presents a reconciliation of the IFRS Financial measure of
Net Income (Loss) to Adjusted EBITDA for each of the periods listed:
Three Months Ended Six Months Ended
(In thousands) March 31, June 30, June 30, June 30, December 31,
2025 2025 2025 2024 2024
Net income (loss) $ (337,391 ) $ 303,465 $ (33,926 ) $ 15,745 $ (102,746 )
Finance costs 42,820 55,349 98,169 60,581 77,062
Accretion of asset retirement obligations 10,353 13,777 24,130 14,667 16,201
Other (income) expense ((1)) (644 ) 179 (465 ) (755 ) (502 )
Income tax (benefit) expense 66,790 (60,330 ) 6,460 (97,997 ) (38,954 )
Depreciation, depletion and amortization 70,807 93,398 164,205 119,220 137,264
(Gain) loss on fair value adjustments of unsettled financial instruments 235,070 (157,440 ) 77,630 80,117 108,913
(Gain) loss on natural gas and oil property and equipment ((2)) 236 5,316 5,552 249 15,059
(Gain) loss on sale of equity interest — — — — 7,375
Unrealized (gain) loss on investment — (6,355 ) (6,355 ) (2,433 ) 6,446
Costs associated with acquisitions 2,885 25,081 27,966 3,724 7,849
Other adjusting costs ((3)) 5,963 4,856 10,819 10,451 11,924
Loss on early retirement of debt 39,485 — 39,485 10,649 4,104
Non-cash equity compensation 1,825 2,552 4,377 3,669 4,617
(Gain) loss on interest rate swap (35 ) (35 ) (70 ) (100 ) (90 )
Total adjustments $ 475,555 $ (23,652 ) $ 451,903 $ 202,042 $ 357,268
Adjusted EBITDA $ 138,164 $ 279,813 $ 417,977 $ 217,787 $ 254,522
Pro forma TTM adjusted EBITDA ((4)) $ 952,216 $ 964,028 $ 964,028 $ 584,261 $ 548,570
(1) Excludes $0.2 million, $0.4 million, $0.6 million, $0.5 million, and $0.6 million in dividend distributions received for our investment in DP Lion Equity Holdco during the three months ended March 31 and June 30, 2025, and the six months ended June 30,
2025, June 30, 2024, and December 31, 2024,respectively.
(2) Excludes $2 million, $68 million, $70 million, $7 million and $34 million in cash proceeds received for leasehold sales during the three months ended March 31 and June 30, 2025, and the six months ended June 30, 2025, June 30, 2024 and December 31, 2024,
respectively, less $6 million, $6 million and $14 million for the three months ended June 30, 2025, and the six months ended June 30, 2025 and December 31, 2024, respectively.
(3) Other adjusting costs for the three months ended March 31 and June 30, 2025, and the six months ended June 30, 2025 were primarily associated with one-time personnel-related expenses and legal fees from certain litigation. Other adjusting costs for the six
months ended June 30, 2024 were primarily associated with expenses associated with unused firm transportation agreements and legal and professional fees. Other adjusting costs for the six months ended December 31, 2024 were primarily associated with legal
fees from certain litigation.
(4) Includes adjustments for the trailing twelve months ended March 31, 2025 for the Oaktree, Crescent Pass, and East Texas II acquisitions to pro forma results for a full twelve months of operations. Similar adjustments were made for the trailing twelve
months ended June 30, 2025 for the Maverick, Summit, Crescent Pass, and East Texas II acquisitions as well as for the trailing twelve months ended June 30, 2024 for the Oaktree acquisition and for the trailing twelve months ended December 31, 2024 for the
Oaktree, Crescent Pass, and East Texas II acquisitions.
Net Debt, Net Debt-to-Adjusted EBITDA & Net Debt-to-Pro Forma TTM Adjusted
EBITDA
As used herein, net debt represents total debt as recognized on the balance
sheet less cash and restricted cash. Total debt includes our borrowings under
the Credit Facility, borrowings under or issuances of, as applicable, our
subsidiaries’ securitization facilities, and other borrowings. We believe
net debt is a useful indicator of our leverage and capital structure.
As used herein, net debt-to-adjusted EBITDA, net debt-to-pro forma TTM
adjusted EBITDA, or “leverage” or “leverage ratio,” is measured as net
debt divided by adjusted EBITDA or pro forma TTM adjusted EBITDA. We believe
that this metric is a key measure of our financial liquidity and flexibility
and is used in the calculation of a key metric in one of our Credit Facility
financial covenants.
The following table presents a reconciliation of the IFRS Financial measure of
Total Non-Current Borrowings to the Non-IFRS measure of Net Debt and a
calculation of Net Debt-to-Adjusted EBITDA and Net Debt-to-Pro Forma Adjusted
EBITDA for each of the periods listed:
As of
(In thousands) March 31, June 30, June 30, December 31,
2025 2025 2024 2024
Total debt $ 2,701,190 $ 2,676,910 $ 1,654,560 $ 1,693,242
LESS: Cash and cash equivalents 32,641 23,743 3,483 5,990
LESS: Restricted cash ((1)(2)) 106,011 103,158 54,976 46,269
Net debt $ 2,562,538 $ 2,550,009 $ 1,596,101 $ 1,640,983
Pro forma TTM adjusted EBITDA ((3)) $ 952,216 $ 964,028 $ 584,261 $ 548,570
Net debt-to-pro forma TTM adjusted EBITDA ((4)) 2.7x 2.6x 2.7x 3.0x
(1) Includes adjustments for deferred financing costs and original issue discounts, consistent with presentation on the Statement of Financial Position.
(2) The increase of restricted cash as of March 31 and June 30, 2025, is due to the addition of $19 million and $31 million in restricted cash for the ABS X Notes and ABS Maverick Notes, respectively, offset by $4 million for the retirement of the ABS I & II
notes.
(3) Includes adjustments for the trailing twelve months ended March 31, 2025 for the Oaktree, Crescent Pass, and East Texas II acquisitions to pro forma results for a full twelve months of operations. Similar adjustments were made for the trailing twelve
months ended June 30, 2025 for the Maverick, Summit, Crescent Pass, and East Texas II acquisitions as well as for the trailing twelve months ended June 30, 2024 for the Oaktree acquisition and for the trailing twelve months ended December 31, 2024 for the
Oaktree, Crescent Pass, and East Texas II acquisitions.
(4) Does not include adjustments for working capital which are often customary in the market.
Free Cash Flow
As used herein, free cash flow represents net cash provided by operating
activities, less expenditures on natural gas and oil properties and equipment,
and cash paid for interest. We believe that free cash flow is a useful
indicator of our ability to generate cash that is available for activities
beyond capital expenditures. The Directors believe that free cash flow
provides investors with an important perspective on the cash available to
service debt obligations, make strategic acquisitions and investments, and pay
dividends.
The following table presents a reconciliation of the IFRS Financial measure of
Net Cash from Operating Activities to the Non-IFRS measure of Free Cash Flow
for each of the periods listed:
Three Months Ended Six Months Ended
(In thousands) March 31, June 30, June 30, June 30, December 31,
2025 2025 2025 2024 2024
Net cash provided by operating activities $ 131,539 $ 132,596 $ 264,135 $ 160,810 $ 184,853
LESS: Expenditures on natural gas and oil properties and equipment (28,031 ) (61,238 ) (89,269 ) (20,848 ) (31,252 )
LESS: Cash paid for interest (41,574 ) (50,680 ) (92,254 ) (47,632 ) (75,509 )
Free cash flow $ 61,934 $ 20,678 $ 82,612 $ 92,330 $ 78,092
ADD: Proceeds from divestitures 1,970 67,655 69,625 9,933 59,048
Adjusted free cash flow $ 63,904 $ 88,333 $ 152,237 $ 102,263 $ 229,470
Free cash flow yield ((1)) 31 %
(1) Annualized second quarter 2025 free cash flow of $88 million and Market
Cap of $1.1 billion as of August 8, 2025.
Total Revenue, Inclusive of Settled Hedges and Adjusted EBITDA Margin
As used herein, total revenue, inclusive of settled hedges, accounts for the
impact of derivatives settled in cash. We believe that total revenue,
inclusive of settled hedges, is useful because it enables investors to discern
our realized revenue after adjusting for the settlement of derivative
contracts.
As used herein, adjusted EBITDA margin is measured as adjusted EBITDA, as a
percentage of total revenue, inclusive of settled hedges. Adjusted EBITDA
margin encompasses the direct operating costs and the portion of general and
administrative costs required to produce each Mcfe. This metric includes
operating expense, employee costs, administrative costs and professional
services, and recurring allowance for credit losses, which cover both fixed
and variable cost components. We believe that adjusted EBITDA margin is a
useful measure of our profitability and efficiency, as well as our earnings
quality, because it evaluates the Group on a more comparable basis
period-over-period, especially given our frequent involvement in transactions
that are not comparable between periods.
The following table presents a reconciliation of the IFRS Financial measure of
Total Revenue to the Non-IFRS measure of Total Revenue, Inclusive of Settled
Hedges and a calculation of Adjusted EBITDA Margin for each of the periods
listed:
Three Months Ended Six Months Ended
(In thousands) March 31, June 30, June 30, June 30, December 31,
2025 2025 2025 2024 2024
Total revenue $ 346,903 $ 431,162 $ 778,065 $ 368,674 $ 426,167
Net gain (loss) on commodity derivative instruments ((1)) (52,271 ) 14,617 (37,654 ) 77,749 73,540
Total revenue, inclusive of settled hedges 294,632 445,779 740,411 446,423 499,707
Adjusted EBITDA $ 138,164 $ 279,813 $ 417,977 $ 217,787 $ 254,522
Adjusted EBITDA margin 47 % 63 % 56 % 49 % 51 %
(1) Net gain (loss) on commodity derivative settlements represents cash paid
or received on commodity derivative contracts. This excludes settlements on
foreign currency and interest rate derivatives, as well as the gain (loss) on
fair value adjustments for unsettled financial instruments for each of the
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