Diversified Energy (DEC) H2 2025 earnings summary

Executive summary

• Achieved record operational and financial results in 2025, surpassing guidance for Adjusted EBITDA and free cash flow, driven by strategic and transformative acquisitions, portfolio optimization, and resilience amid commodity price volatility.

• Completed ~$2 billion in acquisitions, including Maverick, Canvas Energy, and announced Sheridan Production Partners deal, marking a transformative year.

• Transitioned to U.S. incorporation and NYSE listing, enhancing liquidity, investor access, and celebrating the 25th anniversary.

• Maintained disciplined capital allocation, debt reduction, and robust shareholder returns.

• Continued focus on acquiring, operating, and optimizing established cash-generating energy assets.

Financial highlights

• 2025 total revenue reached $1.83 billion (up 142% YoY); Adjusted EBITDA was $956 million (up 103% YoY) with a 58% margin, both record highs.

• Adjusted free cash flow was $440 million (up 110% YoY), including $55 million in transaction costs.

• Net income for 2025 was $342 million (up 432% YoY); operating cash flow was $465 million.

• Net debt at year-end was approximately $2.8 billion; leverage improved to 2.3x net debt/EBITDA, down ~23% YoY.

• Liquidity stood at $577 million at year-end.

Outlook and guidance

• 2026 guidance: production 1,170–1,210 MMcfe/d, Adjusted EBITDA $925–$975 million, Free Cash Flow ~$430 million, and capital expenditures $135–$155 million.

• Portfolio optimization programs expected to contribute ~$100 million to Adjusted EBITDA and free cash flow in 2026.

• Asset sales run rate expected at $40–$50 million post-2026, with $100 million guided for 2026.

• Leverage target maintained at 2.0x–2.5x.

• Expects continued operational synergies, portfolio optimization, and strong cash generation.