Diversified Energy (DEC) 15th Annual Midwest IDEAS Investor Conference summary

Business strategy and operations

• Focuses on acquiring mature, producing or previously developed natural gas assets and improving their production and emissions profiles through scale, technology, and vertical integration.

• Operates in two main regions: Appalachia (West Virginia, Ohio, Pennsylvania) and Central (East Texas, Louisiana, Oklahoma), with a balanced production profile after recent acquisitions.

• Maintains a $650 million market cap and is dual-listed on the NYSE and LSE, enhancing liquidity and index inclusion.

• Reduces traditional E&P risks by hedging 80-85% of production, using investment-grade ABS debt, and focusing on stewardship to minimize environmental risk.

• Achieved over 50% emissions reduction since 2022, reaching its 2030 target early, and maintains 99.5% leak-free assets.

Financial performance and capital allocation

• Maintains a low corporate production decline rate (10%) and low capital intensity, with CapEx at 10% or less of EBITDA.

• Generated $543 million in EBITDA last year, with a disciplined hedging strategy supporting high margins for over seven years.

• Returns capital through an 8.5% dividend yield, share buybacks (up to 10% annually), and regular debt reduction via ABS structures.

• Grows primarily through acquisitions at attractive PV15–PV20 valuations, with recent deals in the Central Region and East Texas.

• Trades at a lower multiple (4x) compared to the sector average (6x), partly due to UK market dynamics and fossil fuel sentiment.

Technology, ESG, and asset management

• Employs real-time monitoring and analytics for production and emissions, enabling efficient, data-driven asset management.

• Implements "Smarter Asset Management" to optimize mature assets, extending their productive life and efficiency.

• Achieved the UN Oil and Gas Methane Partnership gold standard for emissions management, with third-party assurance.

• ESG report has won European awards for two consecutive years, and the company holds an MSCI AA rating.

• Manages asset retirement in-house via Next LVL, reducing costs and liabilities, and generates third-party revenue by retiring orphan wells.