Diversified Energy (DEC) Q2 2026 earnings summary

Executive summary

• Delivered strong Q2 2026 results with disciplined capital allocation, including debt reduction, shareholder returns, and accretive acquisitions totaling over $2 billion in the last 12 months, and expanded Oklahoma operations via the Camino acquisition.

• Achieved Q2 average production of 1,253 MMcfe/d and an exit rate of 1,275 MMcfe/d, maintaining industry-leading low production decline rates.

• Introduced a new operated development program leveraging a deep inventory of undeveloped locations, aiming to offset production decline and enhance free cash flow.

• Returned ~$136M to shareholders in H1 2026, including $93M in share repurchases and dividends, representing a 14% yield.

• Emphasized capital allocation flexibility, with the ability to adjust drilling pace and deployment based on market conditions and returns.

Financial highlights

• Q2 2026 commodity revenue was $504 million, with adjusted EBITDA of $240 million (52% margin), and adjusted free cash flow of $115 million.

• Net income for Q2 2026 was $248 million, including gains on unsettled derivatives.

• Trailing 12 months: 1.2 BCFE/day production, $1.9 billion commodity revenue, $1.1 billion adjusted EBITDA, $578 million adjusted free cash flow.

• Liquidity at June 30, 2026 was $678 million, with leverage at 2.45x and net debt of $2.83 billion.

• Gross margin for Q2 2026 was 58%, and per unit revenue was $4.22/Mcfe.

Outlook and guidance

• 2026 production guidance: 1,180–1,210 MMcfe/d (29% liquids, 71% gas), adjusted EBITDA $960M–$1.01B, adjusted free cash flow ~$440M.

• Total 2026 capital expenditures expected at $225M–$255M, with $35M–$50M for operated development.

• Non-operated CapEx reduced to $115M–$125M due to reallocation and timing.

• Leverage target maintained at 2.0x–2.5x, with material production impact from operated development expected in 2027.

• Hedging program covers 86% of next 12 months' production, supporting cash flow stability.