Diversified Energy (DEC) Q3 2026 earnings summary

Executive summary

• Q3 production averaged 1,189 MMcfe/d; commodity revenue was $469.6M and Adjusted EBITDA was $255.5M. Net loss was $202.2M, including a $348.3M non-cash loss on unsettled derivatives.

• Q3 Adjusted Free Cash Flow was $152.7M; 9M operating cash flow reached $393.3M.

• FY26 guidance was reiterated; Birch remained on track for Q4 closing and is expected to materially increase scale and cash generation.

Financial highlights

• Q3 total revenue was $108.5M versus $499.8M a year earlier, reflecting a $378.4M derivative loss; commodity revenue rose 26% to $469.6M.

• Q3 Adjusted EBITDA was $255.5M versus $285.2M YoY; 9M Adjusted EBITDA was $782.5M versus $701.8M.

• Q3 operating cash flow was $135.8M and capital expenditures were $39.3M; Adjusted Free Cash Flow was $152.7M versus $174.1M YoY.

• 9M operating cash flow was $393.3M versus $282.4M; 9M Adjusted Free Cash Flow was $426.9M, including $149.2M of divestiture proceeds.

• September 30 liquidity was $505.7M, including $5.8M cash and $499.9M of available Credit Facility capacity.

Outlook and guidance

• FY26 guidance: production 1,180–1,210 MMcfe/d; Adjusted EBITDA $960M–$1.010B; Adjusted Free Cash Flow ~$440M; capital expenditures $225M–$255M.

• Capital guidance includes $75M–$80M maintenance/other, $35M–$50M operated development and $115M–$125M non-op JV partnership spending.

• Guidance includes ~$150M of portfolio optimization proceeds, is based on July 2026 strip prices and excludes Birch; estimated Adjusted Free Cash Flow excludes working-capital changes.

• Birch acquisition, announced September 2, is expected to close in Q4 2026 for ~$1.8B, subject to customary conditions; planned funding includes ~$1.5B of ABS financing and Credit Facility liquidity.

• Approximately 80% of production was hedged for the next 12 months; hedge targets are 60–80% for months 1–12, at least 50% for months 13–24 and at least 30% for months 25–36.