REG - Diversified Energy - Third Quarter 2024 Trading Statement
12/11/2024 07:15
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RNS Number : 7928L Diversified Energy Company PLC 12 November 2024
November 12, 2024
Diversified Energy Company PLC
("Diversified" or the "Company")
Diversified Energy Reports Strong Third Quarter 2024 Results
Continued Focus on Debt Repayments & Additional Undeveloped Land Sales
Expanding Value Creation with Revenue from Coal Mine Methane Environmental
Credits
Diversified Energy Company PLC (LSE: DEC, NYSE: DEC) is pleased to announce
the following operations and trading update for the quarter ended September
30, 2024.
Delivering Reliable Results
• Recorded average 3Q24 production of 829 MMcfepd (138 Mboepd)
◦ September 2024 exit rate of 851 MMcfepd (142 Mboepd)
• Operating Cash Flow of $102 million, and Net loss of $1 million
inclusive of non-cash unsettled derivative adjustments, and non-cash
depreciation, depletion and amortization
• Achieved 3Q24 Adjusted EBITDA((a)) of $115 million and Free Cash
Flow((b)) of $47 million
• Realized 49% 3Q24 Adjusted EBITDA Margin((a)) and TTM Free Cash
Flow Yield((b)) of 32%
◦ 3Q24 Total Revenue, Inclusive of Settled Hedges per Unit((c)) of
$3.23/Mcfe ($19.38/Boe)
◦ 3Q24 Adjusted Operating Cost per Unit((d)) of $1.71/Mcfe
($10.23/Boe)
• Reaffirmed credit facility borrowing base at $385 million with
$102 million of undrawn capacity and unrestricted cash
Revenue Growth Initiatives
• Announced fixed-price contract for gas delivery to a major Gulf
Coast LNG export facility
• Generated ~ $23 million year-to-date in cash flow through
divestiture of undeveloped leasehold
• Expansion into adjacent market of Coal Mine Methane ("CMM")
capture and environmental credit sales generating $8 to $10 million of EBITDA
in 2024
Executing Strategic Objectives
• Retired $154 million debt principal through amortizing debt
payments, year-to-date
• Declared 3Q24 dividend of $0.29 cents per share
• Repurchased ~1.4 million shares in 2024, representing ~$20 million
of share buybacks((e))
• Completed previously announced acquisitions of Crescent Pass
Energy and East Texas assets
◦ Combined with Oaktree Working Interest Acquisition, offsets ~2
years of declines((f))
Next LVL Milestones
• The Company has retired a total of 165 operated wells,
year-to-date and is on track to meet or exceed Diversified's stated goal of
retiring 200 wells within its Appalachian footprint in 2024
◦ Next LVL Energy completed 233 well retirements through September
2024, including 68 wells associated with orphan wells and third-party
operators
Rusty Hutson, Jr., CEO of Diversified, commented:
"Our results this quarter demonstrate the underlying strength of our business
to deliver consistent cash flow and our commitment to operational excellence.
Year-to-date, we have announced $85 million in dividend payments, retired $154
million in outstanding debt principal, and executed over $20 million in share
repurchases. We continue to remain on-track with the integration of the three
acquisitions we have made this year and believe we have put in place an
operational infrastructure platform that has the ability to significantly
expand our business within our core operating areas without any meaningful
increase in corporate G&A expense. This scalable and capable platform is a
valuable advantage for our growth strategy.
Strong financial and operational performance during the third quarter,
supported by our strategic hedging program positions which provided hedge
protection of $53 million in the quarter and $130 million, year-to-date, and
acquisition-related synergies, provide momentum heading into the remainder of
the year. Looking ahead, we expect continued strong performance across our
operations and we are well positioned for additional opportunities to add to
the diversity of revenue generation streams, including robust undeveloped land
sales, additional LNG agreements, and our expansion into adjacent markets of
non-traditional operations, notably, Coal Mine Methane capture and sale of
environmental credits.
We continue to execute on our long-term strategic plan - investing in the
growth of our core business, driving operational excellence, and maintaining a
disciplined approach to allocating capital to foster the strengthening of the
balance sheet and create shareholder value. As we continue to scale our
company, we remain focused on operating safely, reliably and in an
environmentally responsible manner, and that as the Right Company at the Right
Time we can help provide the essential energy to our communities, country, and
the world that is needed today and into the future."
Operations and Finance Update
Production
The Company recorded exit rate production in September 2024 of 851 MMcfepd
(142 Mboepd) and delivered 3Q24 average net daily production of 829 MMcfepd
(138 Mboepd). Net daily production for the quarter continued to benefit from
Diversified's peer-leading, shallow decline profile and the addition of the
recently closed Crescent Pass Energy acquisition.
The production for the quarter reflects contributions from two of the three
acquisitions announced during 2024, and average production for the period
represents an approximate 14% increase in volumes compared to the adjusted
4Q23 average of 725 MMcfepd (121 Mboepd), inclusive the impact of the ABSVII
Asset Sale transaction((f)).
Consistent with previous announcements, Diversified expects the recently
completed acquisition of the East Texas assets to contribute additional
production volumes of approximately 21 MMcfepd (4 Mboepd).
Margin and Total Cash Expenses per Unit
Diversified's delivered 3Q24 per unit revenues of $3.23/Mcfe ($19.38/Boe) that
substantially benefited from the Company's disciplined hedging strategy, with
settled natural gas hedge floors of $3.34/MMBtu exceeding the average NYMEX
settlements by 55% during the quarter.
Divestitures of undeveloped leasehold acreage continued to supplement
Diversified's organic cash generation, with ~$9 million of cash proceeds
during the quarter and year-to-date cash proceeds of ~$23 million.
Adjusted EBITDA Margins((a)) of 49% (33% unhedged) incorporate the Company's
per unit revenues and reflect ongoing decreases in commodity-price linked
expenses that are offset by production-related changes to per-unit Lease
Operating Expense and Midstream Expense. General and Administrative expenses
remained relatively consistent with prior period levels.
3Q24 3Q23
$/Mcfe $/Boe $/Mcfe $/Boe %
Average Realized Price(1) $ 3.23 $ 19.38 $ 3.46 $ 20.75 (7) %
Adjusted Operating Cost per Unit((d)) 3Q24 3Q23
$/Mcfe $/Boe $/Mcfe $/Boe %
Lease Operating Expense(2) $ 0.77 $ 4.61 $ 0.62 $ 3.72 24%
Midstream Expense 0.23 1.40 0.24 1.44 (3)%
Gathering and Transportation 0.32 1.91 0.29 1.75 9%
Production Taxes 0.10 0.61 0.22 1.33 (54)%
Total Operating Expense(2) $ 1.42 $ 8.53 $ 1.37 $ 8.24 4%
Employees, Administrative Costs and Professional Fees((g)) 0.28 1.70 0.26 1.56 9%
Adjusted Operating Cost per Unit(2) $ 1.71 $ 10.23 $ 1.63 $ 9.81 4%
Adjusted EBITDA Margin((a)) 49% 56%
(1) 3Q24 excludes $0.05/Mcfe ($0.31/Boe) and 3Q23 excludes $0.15/Mcfe
($0.88/Boe) of other revenues generated by Next LVL Energy
Values may not sum due to rounding
(2) 3Q24 excludes $(0.07)/Mcfe ($(0.41)/Boe) and 3Q23 excludes $(0.08)/Mcfe
($(0.48)/Boe) of expenses attributable to Next LVL Energy
Values may not sum due to rounding
( )
( )
Results of Hedging and Current Financial Derivatives Portfolio
( )
Diversified continues to be advantaged in the current commodity price
environment with a 4Q24 natural gas hedge floor of $3.30/MMBtu, which is
currently at a 27% premium to NYMEX settlements and the remaining NYMEX
strip((h)) for the quarter. The impact of commodity hedges settled in cash
during the quarter contributed $53 million to hedged revenues during the
quarter and $130 million, year-to-date. The table below reflects the
consistency of the Company's full-year hedge positions through calendar year
2027 at September 30, 2024:
( )
GAS (Mcf) NGL (Bbl) OIL (Bbl)
Wtd. Avg. Hedge Price((i)(j)) ~ % of Production Hedged((k)) Wtd. Avg. Hedge Price((i)) ~ % of Production Hedged((k)) Wtd. Avg. Hedge Price((i)) ~ % of Production Hedged((k))
FY25 $3.30 85% $34.39 55% $64.22 85%
FY26 $3.24 75% $32.47 55% $62.36 50%
FY27 $3.26 70% $32.29 45% $62.58 45%
Opportunistic Layering of Additional Hedges at Premium Contract Prices
Diversified has strategically taken advantage of the recent strength of the
natural gas price curve to add to the Company's 2025-2027 hedge portfolio and
layering additional NYMEX volumes at an average floor price of ~$3.45/MMBtu,
which is reflected in the financial derivatives positions as at September 30,
2024.
Natural Gas Supply Contract with LNG Exporter Provides Incremental Price
Surety
Recently, Diversified announced the execution of a supply agreement with a
major Gulf Coast LNG facility to provide ~40 Bcf of natural gas for export
over the course of November 2024 through October 2027. Under the terms of the
agreement, the Company will benefit from a fixed pricing construct indexed to
Gulf Coast markets for duration of the agreement. This inaugural export
facility agreement for Diversified represents an innovative, additional
opportunity set for securing commodity prices and insulating cash margins from
future market volatility.
Borrowing Base Redetermination
Diversified recently completed the Company's Fall 2024, regularly scheduled
semi-annual Borrowing Base Redetermination. The Company received 100% approval
from its 12-bank lending syndicate of the facility's $385 million borrowing
base (unchanged from the previous redetermination in June 2024), which is
structured as a Sustainability-Linked Loan, and aligned with the Company's
sustainability commitments. Inclusive of the redetermination, Diversified
ended the quarter with $102 million of undrawn credit facility capacity and
unrestricted cash.
Environmental Update
Asset Retirement Progress and Next LVL Energy Update
Year-to-date, the Company has retired a combined 233 wells consisting of
assets operated, state well retirements, and contracted retirement activity
for third party operators. Diversified is well-positioned to meet or exceed
it's 2024 retirement goal of 200 wells per year with 165 operated wells
retired as of September 30, 2024 and the Company continues to drive
stakeholder value via the realization of contractual partnerships to retire
assets that eliminate orphaned or abandoned wells in our region and provide
revenue to offset the cash costs associated with the retirement of
Diversified's wells.
Conference Call Details
The Company will host a conference call today, November 12, 2024, at 1:00 PM
GMT (8:00 AM EST) to discuss the 3Q24 Trading Statement and will make an audio
replay of the event available shortly thereafter.
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)
Shareholder Engagement
In accordance with the requirements of Provision 4 of the UK Corporate
Governance Code, the Company provides this update following the votes against
the below resolution at the Company's Annual General Meeting held on 10 May
2024 (the "AGM").
While shareholders approved most of the resolutions with majorities in excess
of 99%, Resolution 19 (Amendment to 2017 Equity Incentive Plan to increase the
number of shares available under the Plan), while receiving 74% of the vote
"FOR", did not meet the 75% threshold to pass. The UK Corporate Governance
Code requires that companies provide an update to the market within six months
of an AGM where more than 20% of shareholders have voted against a resolution.
This statement provides an update on the actions that the Company has taken.
Following the AGM, the Company consulted and engaged with a number of
shareholders who voted against the resolutions to better understand their
concerns. The Directors are thankful to the shareholders for sharing their
views. They understand that the negative vote was principally related to the
disconnect between traditional equity compensation plans in the United States,
the Company's primary operating market, in relation to traditional
compensation practices in the United Kingdom and the mechanics of
recalibrating the Equity Incentive Plan after approximately seven years of
existence. The dialogue with the shareholders has highlighted that there
remains strong support for the Company's equity incentive arrangements.
The Board has discussed the feedback received in detail and continues to
actively dialogue with shareholders on the equity incentive and compensation
arrangements.
Footnotes:
(a) 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; For purposes of
comparability, Adjusted EBITDA Margin excludes Other Revenue of $4 million in
1Q24 and $11 million in 4Q23, and Lease Operating Expense of $5 million in
1Q24 and $6 million in 4Q23 associated with Diversified's wholly owned
plugging subsidiary, Next LVL Energy; For more information, please refer to
the Non-IFRS reconciliations as set out below.
(b) 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; TTM Free Cash Flow Yield is calculated using the trailing twelve
Free Cash Flow per share, divided by the trailing twelve month average share
price of £11.29 / $14.27; Trailing twelve month Free Cash Flow per Share
calculated as Free Cash Flow of $220 million divided by average shares
outstanding of 47,818,307 during the twelve month period. For more
information, please refer to the Non-IFRS reconciliations as set out below.
(c) Includes the impact of derivatives settled in cash; For purposes of
comparability, excludes certain amounts related to Diversified's wholly owned
plugging subsidiary, Next LVL Energy.
(d) 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.
(e) Includes the total value of dividends paid and declared, and share repurchases
(including Employee Benefit Trust) year-to-date, through November 12th, 2024.
(f) 4Q23 Adjusted production calculated as the reported average production of
777Mcfepd, less the approximate impact of the divestiture of assets associated
with the ABS VII transaction of 52 MMcfepd; Impact of aggregate acquired
production as an offset to declines assumes an annual corporate decline rate
of 10%
(g) As used herein, employees, administrative costs and professional services
represents 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.
(h) Using NYMEX strip at October 24, 2024, inclusive of all settled/expired
contracts as applicable.
(i) Weighted average price reflects the weighted average of the swap price and
floor price for collar contracts as applicable.
(j) MMBtu prices have been converted to Mcf using a richness factor of 1Mcf=1.0250
MMBtu.
(k) Illustrative percent hedged, calculated using September 2024 average
production and assuming a consolidated annual corporate decline rate of 10%;
Calculation assumes constant product mix over the illustrative decline period
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, 2023 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
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 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 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, 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 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
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, accretion of asset
retirement obligation, other (income) expense, loss on joint and working
interest owners receivable, (gain) loss on bargain purchases, (gain) loss on
fair value adjustments of unsettled financial instruments, (gain) loss on
natural gas and oil property and equipment, costs associated with
acquisitions, other adjusting costs, non-cash equity compensation, (gain) loss
on foreign currency hedge, net (gain) loss on interest rate swaps and items of
a similar nature.
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 a
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:
Amounts in 000's Three Months Ended Three Months Ended Twelve Months Ended
September 30, 2024 September 30, 2023 December 31, 2023
Income (loss) available to ordinary shareholders after taxation $(713) $(50,758) $759,701
Finance costs 39,609 32,447 134,166
Accretion of asset retirement obligation 7,878 6,841 26,926
Other (income) expense (207) 2 (385)
Income tax (benefit) expense 86,098 (12,386) 240,643
Depreciation, depletion and amortization 63,304 54,330 224,546
Gain on bargain purchase - - -
(Gain) loss on fair value adjustments of unsettled financial instruments (93,211) 106,274 (905,695)
(Gain) loss on oil and gas programme and equipment((a)) 729 118 20
(Gain) loss on sale of equity interest - - (18,440)
Unrealized (gain) loss on investment - - (4,610)
Impairment of proved properties - - 41,616
Costs associated with acquisitions 3,317 1,759 16,775
Other adjusting costs((b)) 4,280 1,465 17,794
Loss on early retirement of debt 1,635 - -
Non-cash equity compensation 2,359 (129) 6,494
(Gain) on foreign currency hedge - - 521
(Gain) loss on interest rate swap (49) (51) 2,722
Total Adjustments $115,742 $190,670 $(216,907)
Adjusted EBITDA $115,029 $139,912 $542,794
a) Excludes proceeds received for leasehold
sales.
b) Other adjusting costs for the year ended December 31, 2023 were primarily
associated with legal and professional fees related to the U.S. listing, legal
fees for certain litigation, and expenses associated with unused firm
transportation agreements.
Net Debt and Net Debt-to-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 and our borrowings under or issuances of, as applicable,
our subsidiaries' securitization facilities, excluding original issuance
discounts and deferred finance costs. We believe net debt is a useful
indicator of our leverage and capital structure.
As used herein, net debt-to-adjusted EBITDA, or "leverage" or "leverage
ratio," is measured as net debt divided by adjusted trailing twelve-month
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:
Amounts in 000's As of As of As of
September 30, 2024 September 30, 2023 December 31, 2023
Total non-current borrowings $1,486,997 $1,260,043 $1,075,805
Current portion of long-term debt 210,213 216,167 200,822
LESS: Cash (9,013) (3,553) (3,753)
LESS: Restricted cash (49,678) (39,126) (36,252)
Net Debt $1,638,519 $1,433,531 $1,236,622
TTM Adjusted EBITDA $452,834 $564,971 $542,794
Pro forma TTM adjusted EBITDA((a)) $555,456 $602,976 $549,258
Net debt-to-pro forma TTM adjusted EBITDA 2.9x 2.4x 2.3x
a) Pro forma TTM adjusted EBITDA includes adjustments for respective twelve
month periods to pro forma results for the full twelve-month impact of
intra-period acquisitions (September 30, 2024: Oaktree, Crescent Pass Energy;
September 30, 2023: Tanos Energy Holdings II LLC; December 31, 2023: Tanos
Energy Holdings II LLC)
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
other than 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:
Amounts in 000's Three Months Ended Three Months Ended Twelve Months Ended
Except per share amounts September 30, 2024 September 30, 2023 September 30, 2024
Net cash provided by operating activities $102,008 $115,300 $385,084
LESS: Expenditures on natural gas and oil properties and equipment (16,854) (29,892) (49,730)
LESS: Cash paid for interest (38,431) (26,863) (115,769)
Free Cash Flow $46,723 $58,545 $219,585
Average Shares Outstanding 47,818
Free Cash Flow per Share $4.59
Average Share Price $14.27
TTM Free Cash Flow Yield 32%
Total Revenue, Inclusive of Settled Hedges and Adjusted EBITDA Margin
As used herein, total revenue, inclusive of settled hedges, includes the
impact of derivatives settled in cash. We believe that total revenue,
inclusive of settled hedges, is a useful because it enables investors to
discern our realized revenue after adjusting for the settlement of derivative
contracts.
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:
Amounts in 000's Three Months Ended Three Months Ended Twelve Months Ended
September 30, 2024 September 30, 2023 December 31, 2023
Total revenue((a)) $186,297 $181,051 $868,263
Net gain (loss) on commodity derivative instruments((b)) 52,749 70,161 178,064
Total revenue, inclusive of settled hedges((a)) $239,046 $251,212 $1,046,327
Adjusted EBITDA $115,029 $139,912 $542,794
Adjusted EBITDA Margin 48% 56% 52%
Adjusted EBITDA Margin, exclusive of Next LVL Energy 49% 56% 53%
(a) Excludes proceeds received for leasehold
sales.
(b) 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
periods presented.
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