Diversified Energy Reports Record Year, Highlighted by Transformative Year-over-Year Growth, Strong Cash Generation, and Integration of ~$2 Billion in Acquisitions with Meaningful Synergies

Rhea-AI Summary

Diversified Energy (NYSE: DEC) reported record 2025 results with FY25 revenue $1,829M, net income $342M and adjusted EBITDA $956M. Production averaged 1,086 MMcfepd for 2025 and exit rate was 1,254 MMcfepd. The company completed ~$2B of acquisitions, returned >$185M to shareholders, reduced ABS principal by $277M, and finished the year with ~$577M liquidity.

2026 guidance targets production 1,170–1,210 Mmcfe/d, adj. EBITDA $925–975M, adj. free cash flow ~$430M, and a leverage target of 2.0x–2.5x.

Positive

• FY25 Revenue $1,829M
• Adjusted EBITDA $956M (103% YoY growth)
• Returned >$185M to shareholders via dividends and repurchases
• Completed ~$2B of acquisitions adding ~$1.2B pro‑forma adjusted EBITDA

Negative

• Consolidated leverage of 2.3x at YE2025
• Consolidated debt is ~73% held in non‑recourse ABS securities
• 2026 adj. EBITDA guidance $925–975M implies flat-to-modest downside versus FY25

Key Figures

4Q25 Revenue: $667 million FY25 Revenue: $1,829 million FY25 Net Income: $342 million +5 more

8 metrics

4Q25 Revenue $667 million Fourth quarter 2025 total revenue

FY25 Revenue $1,829 million Full year 2025 total revenue

FY25 Net Income $342 million Full year 2025 net income; guidance was exceeded

FY25 Adjusted EBITDA $956 million Full year 2025 Adjusted EBITDA; beat guidance

FY25 Adjusted FCF $440 million Full year 2025 Adjusted Free Cash Flow after $55M transaction costs

Leverage Ratio 2.3x Year-end 2025 leverage ratio; ~23% improvement from YE2024

Liquidity $577 million Credit facility availability and unrestricted cash as of Feb 25, 2026

Shareholder Returns 2025 Over $185 million Dividends and share repurchases, including ~$100M for ~7.3M shares

Market Reality Check

Price: $13.22 Vol: Volume 471,868 vs 20-day ...

normal vol

$13.22 Last Close

Volume Volume 471,868 vs 20-day average 523,243 (relative volume 0.9x). normal

Technical Trading below 200-day MA of 14.23 with shares at 13.06, and about 22.52% under the 52-week high.

Peers on Argus

DEC slipped 0.53% while peers were mixed: CRGY -0.39%, TGS -0.40%, SLNG -0.71%, ...

DEC slipped 0.53% while peers were mixed: CRGY -0.39%, TGS -0.40%, SLNG -0.71%, CVE -2.27%, but NFG gained 1.04%. This pattern points to stock-specific trading rather than a broad sector move.

Historical Context

5 past events · Latest: Feb 12 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 12	Results timing notice	Neutral	-2.2%	Announced publication date and call for 2025 full-year results.
Feb 11	Results timing notice	Neutral	-2.2%	Provided timing and access details for upcoming full-year results.
Jan 30	TR-1 ownership update	Neutral	+1.9%	BlackRock reported 5.69% voting rights via TR-1 notification.
Jan 28	Bond tap issue	Neutral	-1.2%	Announced $200M tap of 9.75% 2029 bonds, taking total to $500M.
Jan 26	TR-1 threshold cross	Neutral	+2.5%	BlackRock disclosed 5.74% voting stake and instrument breakdown.

Pattern Detected

Recent news flow has been largely informational (timing notices, TR-1s, bond tap), with modest price moves that do not show a clear alignment pattern between headline tone and next-day reaction.

Recent Company History

Over the last few months, DEC’s news has centered on capital markets activity and shareholder disclosures. Bond tap announcements and related 8-K filings increased its 9.75% 2029 bonds outstanding to $500 million, while TR‑1 and Schedule 13D/A filings detailed EIG‑linked ownership changes and a 2,100,000-share Rule 144 block sale at $13.28. Timing announcements for the 2025 full-year results preceded this earnings release, which now provides the detailed operational and financial picture hinted at by those prior disclosures.

Market Pulse Summary

This announcement details a record year, with 2025 revenue of $1,829 million, net income of $342 mil...

Analysis

This announcement details a record year, with 2025 revenue of $1,829 million, net income of $342 million, and Adjusted EBITDA of $956 million. Adjusted Free Cash Flow reached $440 million, while the leverage ratio improved to 2.3x and liquidity totaled $577 million. DEC integrated roughly $2 billion of acquisitions and returned over $185 million to shareholders. Investors may monitor execution on 2026 guidance, synergy realization, capital discipline, and ongoing portfolio optimization efforts.

Key Terms

adjusted ebitda, adjusted free cash flow, non-gaap, leverage ratio, +3 more

7 terms

adjusted ebitda financial

"Significant Revenue Growth Delivers Higher than Expected Full-Year Net-Income and Adjusted EBITDA that Beat Guidance"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted free cash flow financial

"Adjusted Free Cash Flow(c): $152 million after $7 million of transaction costs"

Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.

non-gaap financial

"Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

leverage ratio financial

"Leverage ratio(e): 2.3x as of YE2025; ~23% improvement from YE2024"

Leverage ratio measures how much a company relies on borrowed money compared with its own funds or assets, typically expressed as debt relative to equity or total assets. Like a homeowner with a mortgage, higher leverage can amplify returns when business is strong but also raises the chance of big losses or default if revenue falls, so investors use it to judge financial risk and resilience.

rule 10b-18 regulatory

"including through trading plans intended to qualify under Rule 10b-18 and/or Rule 10b5-1"

Rule 10b-18 is a regulation that sets strict rules for how a company's executives and employees can buy back their own company's stock from the market. It helps ensure that these buybacks happen in a fair and transparent way, reducing the chance of market manipulation. This is important for investors because it offers protection against unfair practices and promotes confidence in the integrity of the stock market.

rule 10b5-1 regulatory

"including through trading plans intended to qualify under Rule 10b-18 and/or Rule 10b5-1"

Rule 10b5-1 is a regulation that allows company insiders to buy or sell their shares at predetermined times, even if they have access to non-public information. It acts like setting a schedule in advance for transactions, helping prevent accusations of unfair trading. This rule provides a way for insiders to plan trades transparently, giving investors confidence that these transactions are not based on hidden information.

restricted stock units financial

"the insider acquired 1,290 restricted stock units (RSUs) at an exercise price of $0"

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

AI-generated analysis. Not financial advice.

Significant Revenue Growth Delivers Higher than Expected Full-Year Net-Income and Adjusted EBITDA that Beat Guidance 

23% Annualized Improvement in Leverage Ratio, While Also Returning Over $185 Million to Shareholders Through Dividends and Strategic Share Repurchases

2026 Guidance Reflects Confidence in the Business's Stability and Cash Generation Through Commodity Cycles

Celebrating Our 25th Anniversary Year with the Completion of our Milestone of Primary Listing on the NYSE, US Incorporation, and Filing of Full Year GAAP Financials

BIRMINGHAM, Ala., Feb. 26, 2026 (GLOBE NEWSWIRE) -- Diversified Energy Company ("Diversified", "DEC", or the "Company") (NYSE: DEC, LSE: DEC) is pleased to announce its financial and operational results for the fourth quarter and full-year ended December 31, 2025, reporting performance that exceed expectations and key strategic and financial achievements. 

Delivering Reliable Results and Strategic Growth

Fourth Quarter 2025 Results

• Production exit rate^(a):  1,254 MMcfepd (209 Mboepd)   
• Average production: 1,198 MMcfepd (200 Mboepd)  
• Total Revenue: $667 million 
• Net Income: $196 million
• Adjusted EBITDA^(b): $254 million 
• Operating Cash Flow: $182 million 
• Adjusted Free Cash Flow^(c): $152 million after $7 million of transaction costs  
  
  

Full Year 2025 Results

• Average production: 1,086 MMcfepd (181 Mboepd) 
• Total Revenue: $1,829 million 
• Net Income: $342 million
• Adjusted EBITDA^(b): $956 million
• Operating Cash Flow: $465 million 
• Adjusted Free Cash Flow^(c): $440 million after $55 million of transaction costs  
• Capital Expenditures: $185 million 
  
  

Financial and Operational Metrics
	4Q25	4Q24	YoY % Change	FY25	FY24	YoY % Change
Production(Mmcfe/d)	1,198	843	42%	1,086	791	37%
Production volume mix
Natural gas	72%	85%		75%	84%
NGLs	14%	12%		13%	12%
Oil	14%	3%		12%	4%
Total Revenue(millions)	$667	$59	1,031%	$1,829	$757	142%
Net Income (millions)	$196	$(106)	285%	$342	$(103)	432%
Adj. EBITDA(b)(millions)	$254	$139	83%	$956	$470	103%
Adj. Free Cash Flow(c)(millions)	$152	$53	187%	$440	$210	110%

Financial Strength and Shareholder Returns

• Current Liquidity^(d): $577 million of credit facility availability and unrestricted cash 
• ABS principal reduction: Retired $277 million in principal amount outstanding under certain ABS facilities during 2025
• Leverage ratio^(e): 2.3x as of YE2025; ~23% improvement from YE2024 
  • Consolidated debt consists of ~73% in non-recourse ABS securities
• Shareholder returns: Over $185 million returned via dividends and repurchases^(f) 
  • Shareholder return yield^(f) of ~18%
  • ~7.3 million shares repurchased (~10% of outstanding shares), totaling ~$100 million^(f) 
  • New Board authorized share repurchase program for up to 7,800,000 shares (~10% of shares outstanding)
• 4Q25 dividend: $0.29 per share declared
  
  

Strategic Execution and Transformational Growth

~$2B of Transformational Acquisitions - Maverick Natural Resources & Canvas Energy: Enhances Diversified’s stature as a leading consolidator of established cash-generating energy assets

• Positions Diversified as a differentiated business, offering ~$1.2 billion of Pro-Forma Adjusted EBITDA^(g), over 1.2 Bcfepd of low decline production, multi-basin commodity diversification, and a strong hedging program that promotes consistent free cash flows
• Acquisitions helped deliver over 100% growth in Adjusted EBITDA and Adjusted Free Cash Flow
• Integration playbook from 30+ acquisitions and counting allowed for upsized synergy capture of over $60 million on Maverick Natural Resources and over $20 million on Canvas Energy
  
  

Carlyle Partnership Continues to Bolster Growth Prospects

• Strategic partnership to invest up to $2 billion in existing U.S. proved developed producing (PDP) oil and gas assets strengthens outlook and conviction on ability to close accretive transactions, while preserving capital flexibility and liquidity
• Canvas Energy marked the inaugural transaction and funding from the Carlyle strategic partnership
  
  

Non-Op Platform Provides Additional Lever for Value Generation

• New Permian Basin joint development program with a private operator in the Northwest Shelf adds additional optionality to Non-Op platform
• Permian partnership included upfront proceeds to DEC for land and working interests, and well-by-well election supporting capital flexibility        
• Oklahoma Joint Development Partnership continues to produce and estimated over 60% IRRs with 114 wells drilled under the JDA in the last 3 years
• Adding incremental production that offsets an estimated ~50% of natural decline (2026 estimated avg. ~10,800 BOEpd) annually across two partnerships
• Superior capital intensity of less than 15% ($140 million capital spend^(h)) for Non-Op Partnerships
  
  

Unlocking Value Through Portfolio Optimization 

• Our Portfolio Optimization Program ("POP") realized ~$160 million from non-core asset and leasehold divestitures
• Our POP highlights optionality in DEC’s portfolio to monetize our vast acreage position via Non-Op Partnerships or leasehold divestitures
• Generated ~$9 million of cash flow from environmental credits related to Coal Mine Methane (CMM) in 2025
  
  

Mountain State Plugging Fund & Next LVL Energy

• Groundbreaking partnership to establish the nation’s FIRST financial assurance fund dedicated to retirement of DEC owned wells (~21,000) in the state of West Virginia; represents ~25% of total gross well count
• Added additional capacity in Appalachia through purchase of CSR Services that increases Next LVL to a total of ~25 pole rigs
• Permanently retired 484 wells, including 386 Diversified wells  
• Since establishment of Next Level in 2022, Diversified has retired ~1,400 wells 
  
  

Rusty Hutson, Jr., CEO of Diversified, commented: 

“I am grateful to our Diversified employees who delivered an incredible 2025 performance and, measured by most metrics, produced the best operational and financial results in our history. We are pleased to report that these results exceeded the upwardly revised guidance range for Adjusted EBITDA and Adjusted Free Cash Flow, demonstrating once again our culture of execution and accountability. Importantly, with the robust cash flow generated from our assets, we reinforced our proven performance with $277 million in systematic debt reduction, $185 million in combined dividends and share repurchases, and approximately $2 billion in accretive acquisitions for the year.

Our 2026 guidance reflects continued disciplined growth, portfolio optimization, and strong free cash flow generation as we look to unlock additional shareholder value from our high-quality assets. I am very excited about the future of Diversified. Both our team and our portfolio of assets are aligned with powerful megatrends: power generation, data centers, and LNG export. Our unique business model, underpinned by our organizational culture of focused execution to GSD (Get Stuff Done), will enable us to capitalize on these trends and drive long-term shareholder value.

For 25 years we have been in the business of stepping up when others step away. As we celebrate this milestone anniversary, our core beliefs and values upon which the company was founded have not wavered. We have pioneered a strategy of acquiring, operating, and optimizing established energy assets that has allowed us to transform one company's divestiture into our consistent cash flow. Today, we are the single largest operator of established producing wells in the United States, a responsibility we take very seriously, and we maintain a track record of delivering innovation, operational excellence, and results every day.

We were the underdogs, but now we are proven, and we are just getting started."

Operations and Finance Update 

Fourth Quarter Production 

The Company recorded exit rate production as of December 31, 2025 of 1,254 MMcfepd (209 Mboepd)^(a) and delivered 4Q25 average daily production of 1,198 MMcfepd (200 Mboepd). The Company's production volume mix was approximately 72% natural gas, 14% natural gas liquids ("NGL's"), and 14% oil, with approximately 65% of production volumes from the Central region and 35% from Appalachia for the fourth quarter. Production for the quarter continued to benefit from Diversified’s peer-leading, shallow decline profile.

2025 Production 

The Company recorded average daily production of 1,086 MMcfepd (181 Mboepd). The Company's production volume mix was approximately 75% natural gas, 13% natural gas liquids ("NGL's"), and 12% oil.

Fourth Quarter Margin and Total Cash Expenses per Unit 

Diversified delivered 4Q25 per unit revenues of $4.35/Mcfe⁽ⁱ⁾ ($26.10/Boe) and Adjusted EBITDA Margin^(b) of 55%. Notably, these per unit metrics reflect an increase in both revenues and expenses from the incorporation of greater liquids production following the Maverick Natural Resources acquisition. The Company’s per unit expenses are anticipated to improve as the Company implements its playbook to achieve long-term, sustainable synergies and cost savings. For example, General and Administrative expenses decreased during 4Q25 compared to prior period levels, despite the higher per unit costs of Maverick, supporting our progress on cost savings and synergy capture. 

2025 Margin and Total Cash Expenses per Unit 

Diversified delivered 4Q25 per unit revenues of $4.49/Mcfe⁽ⁱ⁾ ($26.94/Boe) and Adjusted EBITDA Margin^(b) of 58%.

	4Q25					4Q24						FY25					FY24
	$/Mcfe			$/Boe		$/Mcfe			$/Boe			$/Mcfe			$/Boe		$/Mcfe			$/Boe
Average realized price(1)	$	4.08		$	24.48	$	3.16		$	18.96		$	3.94		$	23.64	$	3.05		$	18.30
Other revenue(2)		0.12			0.72		0.14			0.84			0.15			0.90		0.16			0.96
Proceeds from divestitures(3)		0.15			0.90		0.29			1.74			0.40			2.40		0.14			0.84
Total revenue and proceeds from divestitures, excluding Next Level Energy(4)	$	4.35		$	26.10	$	3.59		$	21.54		$	4.49		$	26.94	$	3.35		$	20.10
Lease operating expense(5)	$	1.12		$	6.72	$	0.83		$	4.98		$	1.12		$	6.72	$	0.73		$	4.38
Production taxes		0.21			1.26		0.11			0.66			0.22			1.32		0.12			0.72
Midstream operating expense		0.18			1.08		0.23			1.38			0.20			1.20		0.25			1.50
Transportation expense		0.22			1.32		0.31			1.86			0.29			1.74		0.31			1.86
Total operating expense(6)	$	1.73		$	10.38	$	1.48		$	8.88		$	1.83		$	10.98	$	1.41		$	8.46
Employees, administrative costs and professional fees(7)		0.29			1.74		0.32			1.92			0.26			1.56		0.30			1.80
Adjusted Operating Cost per Unit(8)	$	2.02		$	12.12	$	1.80		$	10.80		$	2.09		$	12.54	$	1.71		$	10.26
Adjusted EBITDA Margin(9)		55	%				53	%					58	%				50	%

_{⁽¹⁾   Total commodity revenue, including settled derivatives.
⁽²⁾   Total midstream and other revenue, excluding Next Level Energy revenue.
⁽³⁾   Proceeds from divestitures represents cash proceeds related to asset optimization
⁽⁴⁾   Total revenue and proceeds from divestitures related to asset optimization, excluding Next Level Energy revenue.
⁽⁵⁾   Total lease operating expense, excluding Next Level Energy lease operating expense.
⁽⁶⁾  Total operating expense, excluding Next Level Energy lease operating expense.
⁽⁷⁾   Total employees, administrative costs, and professional fees, excluding Next Level Energy. These costs include payroll and benefits for our administrative and corporate staff, costs of maintaining administrative and corporate offices, costs of managing our production operations, franchise taxes, public company costs, fees for audit and other professional services, and legal compliance.
⁽⁸⁾   Adjusted Operating Cost per Unit excludes lease operating expense and employees, administrative costs and professional fees attributable to Next Level Energy.
⁽⁹⁾   Adjusted EBITDA Margin represents adjusted EBITDA, as a percentage of total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives.}  

Share Repurchase Program 

For the fiscal year 2025 and year-to-date 2026, the Company has repurchased 8,320,400^(j) shares, representing approximately 11% of the shares outstanding.

The Board of Directors has approved a new share repurchase program authorizing the Company to repurchase up to 7,800,000 shares (~10% of the shares outstanding, including shares held by the Employee Benefit Trust "EBT"). The board believes this new authorization provides the Company ample opportunity to strategically repurchase shares. This new authorization replaces the previously announced share repurchase plan and authorizes the repurchase of our shares through March 1, 2027.

Repurchases of shares under the program may be made, from time to time, in privately negotiated transactions, in open market transactions, or by other means, including through trading plans intended to qualify under Rule 10b-18 and/or Rule 10b5-1 of the U.S. Securities Exchange Act of 1934, as amended. The amount and timing of any repurchases made under the program will be in the Company’s sole discretion and will depend on a variety of factors, including legal requirements, market conditions, other investment opportunities, available liquidity, and the prevailing market price of the common shares. The program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time at the Company’s discretion.

2026 Outlook 

The Company is presenting its Full Year 2026 guidance. Following the recently completed acquisitions Diversified expects to realize continued significant operational synergies associated with a larger, consolidated position in Oklahoma, additional cash generation from its portfolio optimization program, and the ability to continue to improve the overall cost structure of its established producing assets while continuing to prioritize returns and Free Cash Flow generation. 

	2026 Guidance(1)
Total Production(Mmcfe/d)	1,170 to 1,210
% Liquids	~28%
% Natural Gas	~72%
Total Capital Expenditures(millions)
Non-Op JV Partnership	$135 to $155
Maintenance/Other	$70 to $80
Adj. EBITDA(b)(millions)	$925 to $975
Adj. Free Cash Flow(c)(millions)	~$430
Leverage Target	2.0x to 2.5x

⁽¹⁾ Includes the value of anticipated cash proceeds for 2026 asset optimization of ~$100 million; based on January 2026 strip prices. Excludes changes in cash from working capital. Does not incorporate recently announced Sheridan Production acquisition. The Company includes Adjusted EBITDA and Adjusted Free Cash Flow in the Company’s Full Year 2026 Outlook. Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures and have not been reconciled to the most comparable GAAP financial measures because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide an outlook for the comparable GAAP measures.

Conference Call Details 

The Company will host a conference call Friday, February 27, 2026, at 8:30 AM ET to discuss the full year 2025 results and will make an audio replay of the event available shortly thereafter. 

US (toll-free)	+1 877-836-0271/+1 201-689-7805
UK (toll-free)	+44 (0)800 756 3429
Web Audio	https://www.div.energy/news-events/ir-calendarevents
Replay Information	https://ir.div.energy/financial-info

Footnotes: 

(a)	Exit rate includes full month of December 2025 production.
(b)	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 Hedges settled in cash; For more information, please refer to the Non-GAAP reconciliations as set out below.
(c)	Adjusted Free Cash Flow represents net cash provided by operating activities less expenditures on natural gas and oil properties and equipment, and includes proceeds from divestitures related to asset optimization; For more information, please refer to the Non-GAAP reconciliations as set out below.
(d)	Liquidity as of February 25, 2026, including impact of $200M Nordic bond tap.
(e)	“leverage” or “leverage ratio,” is measured as net debt divided by pro forma adjusted EBITDA for the twelve months ended December 31, 2025. Reconciliation table is provided in the appendix of this release.
(f)	Includes the total value of dividends paid and declared, and share repurchases (including by the Employee Benefit Trust) through December 31, 2025. Shareholder Return Yield is calculated using total value of dividends paid and declared, and share repurchases (including by the Employee Benefit Trust) through December 31, 2025 over market cap as of December 31, 2025
(g)	Includes adjustments for the three months ended December 31, 2025 for the Canvas acquisition to pro forma results. Similar adjustments were made for the three months ended December 31, 2024 for the East Texas II acquisition as well as for the twelve months ended December 31, 2025 for the Canvas, Maverick, Summit, and Williams acquisitions.
(h)	Capital Intensity defined as capital expenditures on non-operated drilling programs over adjusted EBITDA
(i)	Includes the impact of derivatives settled in cash and proceeds from divestitures related to asset optimization. For purposes of comparability,  excludes Other Revenue of $2 million in 4Q25, $5 million in 4Q24, $12 million in 2025, and $16 million in 2024, and Lease Operating Expense of $4 million in 4Q25, $5 million in 4Q24, $15 million in 2025, and $19 million in 2024 associated with Diversified’s wholly owned plugging subsidiary, Next LVL Energy.
(j)	Includes total share repurchases (including by the Employee Benefit Trust) from January 1, 2025 through February 26, 2026.

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 10-K for the year ended December 31, 2025 filed with the United States Securities and Exchange Commission and available on the Company’s website. 

For further information, please contact: 

Diversified Energy Company	+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 

Diversified is a leading publicly traded energy company focused on acquiring, operating, and optimizing cash generating energy assets. Through our unique differentiated strategy, we acquire established 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, business and outlook of the Company and its wholly owned subsidiaries. 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”, “guidance”, "outlook" 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 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 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 ability to control or estimate precisely, such as general economic and business conditions, the behavior of other market participants, industry trends, competition, commodity prices, changes in regulation, currency fluctuations, our ability to recover our reserves, our ability to successfully integrate acquisitions, our ability to obtain financing to meet liquidity needs, changes in our business strategy, political and economic uncertainty. The list above is not exhaustive and there are other factors that may cause the Company’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 on Form 10-K for the year ended December 31, 2025, filed with the United States Securities and Exchange Commission. 

Forward-looking statements speak only as of their date and neither the Company 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-GAAP Measures 

Certain key operating metrics that are not defined under GAAP ("non-GAAP" measures) are included in this announcement. These non-GAAP 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-GAAP metrics in the same way, the manner in which we have chosen to calculate the non-GAAP metrics presented herein may not be compatible with similarly defined terms used by other companies. The non-GAAP metrics should not be considered in isolation of, or viewed as substitutes for, the financial information prepared in accordance with GAAP. Certain of the key operating metrics are based on information derived from our regularly maintained records and accounting and operating systems. 

Adjusted EBITDA & Pro Forma 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, finance costs, accretion of asset retirement obligation, other (income) expense, (gain) loss on fair value adjustments of unsettled financial instruments, (gain) loss on natural gas and oil property and equipment, (gain) loss on sale of equity interest, unrealized (gain) loss on investment, costs associated with acquisitions, other adjusting costs, loss on early retirement of debt, non-cash equity compensation, (gain) loss on interest rate swaps, and items of a similar nature.

Adjusted EBITDA and pro form 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 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 GAAP financial measure of net income (loss) to the non-GAAP measure of adjusted EBITDA for each of the periods listed: 

	Three Months Ended							Twelve Months Ended
(in thousands)	December 31, 2025			December 31, 2024				December 31, 2025			December 31, 2024
Net income (loss)	$	195,552		$	(106,193	)		$	341,899		$	(103,093	)
Interest expense		55,082			37,167				209,967			136,801
Accretion of asset retirement obligations		19,182			7,805				48,607			28,464
Other (income) expense(1)		(993	)		(2,009	)			(1,977	)		(1,257	)
Income tax (benefit) expense		1,471			(128,932	)			(40,550	)		(144,845	)
Depreciation, depletion and amortization		154,076			95,511				412,506			291,995
(Gain) loss on fair value adjustments of unsettled derivatives		(201,964	)		202,124				(193,843	)		189,030
(Gain) loss on natural gas and oil properties and equipment(2)		21,273			16,689				86,730			14,917
Costs associated with acquisitions		3,629			4,532				35,724			11,573
Other adjusting costs(3)		3,636			7,644				19,424			22,375
Loss on early retirement of debt		—			2,469				26,971			16,377
Non-cash stock-based compensation		3,037			2,258				10,398			8,286
(Gain) loss on interest rate swaps		(30	)		(41	)			(135	)		(190	)
Total adjustments	$	58,399		$	245,217			$	613,822		$	573,526
Adjusted EBITDA	$	253,951		$	139,024			$	955,721		$	470,433
Pro forma adjusted EBITDA(4)	$	281,558		$	140,431			$	1,211,214		$	546,694

1. Excludes  $0.2 million, $0.4 million, $1.3 million, and $1.1 million in dividend distributions received for our investment in DP Lion Equity Holdco during the three months ended December 31, 2025 and 2024, and the twelve months ended December 31, 2025 and 2024,respectively. 
2. Includes $16 million, $23 million, $160 million, and $41 million in cash proceeds received for leasehold sales during the three months ended December 31, 2025 and 2024, and the twelve months ended December 31, 2025 and 2024, respectively.
3. Other adjusting costs for the three and twelve months ended December 31, 2025 were primarily associated with one-time personnel-related expenses and legal fees from certain litigation. Other adjusting costs for the three and twelve months ended December 31, 2024 were primarily associated with legal and professional fees.
4. Includes adjustments for the three months ended December 31, 2025 for the Canvas acquisition to pro forma results. Similar adjustments were made for the three months ended December 31, 2024 for the East Texas II acquisition as well as for the twelve months ended December 31, 2025 for the Canvas, Maverick, Summit, and Williams acquisitions and for the twelve months ended December 31, 2024 for the Oaktree, Crescent Pass, and East Texas II acquisitions. 
   
   

Net Debt & Net Debt-to-Pro Forma 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, borrowings under or issuances of, as applicable, our subsidiaries’ securitization facilities, and other borrowings. We believe net debt is a useful indicator of our leverage and capital structure. 

As used herein, net debt-to-pro forma adjusted EBITDA, or “leverage” or “leverage ratio,” is measured as net debt divided by pro forma adjusted 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 GAAP financial measure of total debt to the non-GAAP measure of net debt and a calculation of net debt-to-pro forma adjusted EBITDA for each of the periods listed: 

	As of
(In thousands)	December 31, 2025			December 31, 2024
Total debt(1)		2,952,014			1,704,931
LESS: Cash		29,697			5,990
LESS: Restricted cash(2)		115,413			46,269
Net debt	$	2,806,904		$	1,652,672
Pro forma adjusted EBITDA(3)	$	1,211,214		$	546,694
Net debt-to-pro forma adjusted EBITDA(4)	2.3		x	3.0		x

1. Includes adjustments for deferred financing costs and original issue discounts, consistent with presentation on the statement of financial position. 
2. The increase of restricted cash as of December 31, 2025, is due to the addition of $21 million, $27 million, and $10 million in restricted cash for the ABS X Notes, ABS Maverick Notes, and ABS XI Notes, respectively, offset by $4 million for the retirement of the ABS I & II Notes. 
3. Includes adjustments to pro forma results for the twelve months ended December 31, 2025 for the Canvas, Maverick, Summit, and Williams acquisitions and for the twelve months ended December 31, 2024 for the Oaktree, Crescent Pass, and East Texas II acquisitions. 
4. Does not include adjustments for working capital which are often customary in the market.
   
   

Free Cash Flow & Adjusted Free Cash Flow

As used herein, free cash flow represents net cash provided by operating activities ("operating cash flow"), less expenditures on natural gas and oil properties and equipment and adjusted free cash flow represents free cash flow after adjusting for proceeds from divestitures related to asset optimization. We believe that free cash flow and adjusted free cash flow are useful indicators of our ability to generate cash that is available for activities beyond capital expenditures. We believe that free cash flow and adjusted free cash flow provide 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 GAAP financial measure of operating cash flow to the non-GAAP measure of free cash flow and adjusted free cash flow for each of the periods listed: 

	Three Months Ended							Twelve Months Ended
(in thousands)	December 31, 2025			December 31, 2024				December 31, 2025			December 31, 2024
Operating cash flow	$	182,240		$	45,304			$	464,619		$	220,650
LESS: Capital expenditures		(47,100	)		(14,398	)			(184,600	)		(52,100	)
Free cash flow	$	135,140		$	30,906			$	280,019		$	168,550
ADD: Proceeds from divestitures		16,467			22,501				160,098			40,986
Adjusted FCF	$	151,607		$	53,407			$	440,117		$	209,536

Total Revenue, Excluding (Gain) Loss on Fair Value Adjustments of Unsettled Derivatives & Adjusted EBITDA Margin 

As used herein, total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives, represents total revenue less (gain) loss on fair value adjustments of unsettled derivatives. We believe that total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives, is useful because it enables investors to discern our realized revenue after adjusting for derivative settlements.

As used herein, adjusted EBITDA margin is measured as adjusted EBITDA, as a percentage of total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives. Adjusted EBITDA margin encompasses the direct operating costs and the portion of general and administrative costs required to produce each Mcfe. This metric includes operating expense, employee costs, administrative costs and professional services, and recurring allowance for credit losses, which cover both fixed and variable cost components. We believe that adjusted EBITDA margin is a useful measure of our profitability and efficiency, as well as our earnings quality, because it evaluates the Company on a more comparable basis period-over-period, especially given our frequent involvement in transactions that are not comparable between periods. 

The following table presents a reconciliation of the GAAP financial measure of total revenue to the non-GAAP measure of total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives, and a calculation of adjusted EBITDA margin for each of the periods listed: 

	Three Months Ended							Year Ended
(in thousands)	December 31, 2025			December 31, 2024				December 31, 2025			December 31, 2024
Total revenue	$	666,520		$	58,578			$	1,829,142		$	757,290
(Gain) loss on fair value adjustments of unsettled derivatives		(201,964	)		202,124				(193,843	)		189,030
Total revenue, excluding (gain) loss on fair value adjustments of unsettled derivatives	$	464,556		$	260,702				1,635,299			946,320
Adjusted EBITDA	$	253,951		$	139,024			$	955,721		$	470,433
Adjusted EBITDA margin		55	%		53	%			58	%		50	%

FAQ

What were Diversified Energy (DEC) full-year 2025 revenue and adjusted EBITDA results?

DEC reported FY25 revenue of $1,829 million and adjusted EBITDA of $956 million. According to the company, results reflected acquisitions, higher liquids mix, and proceeds from asset optimization, driving significant YoY improvement.

How much cash did Diversified Energy (DEC) return to shareholders in 2025?

Diversified returned over $185 million via dividends and repurchases in 2025. According to the company, repurchases included ~7.3 million shares (~11% of outstanding) and a 4Q25 dividend of $0.29 per share.

What production and commodity mix does Diversified Energy (DEC) guide for 2026?

DEC's 2026 guidance targets 1,170–1,210 Mmcfe/d with roughly ~28% liquids and ~72% natural gas. According to the company, this reflects realized gains from recent acquisitions and portfolio optimization.

How did Diversified Energy (DEC) strengthen its balance sheet during 2025?

The company retired $277 million of ABS principal and finished with $577 million of liquidity. According to the company, these moves reduced leverage to 2.3x and improved financial flexibility.

What impact did the ~$2 billion acquisitions have on Diversified Energy (DEC)'s results?

The acquisitions increased scale to over 1.2 Bcfepd and added about $1.2 billion of pro‑forma adjusted EBITDA capacity. According to the company, integration captured >$80 million of synergies across deals.

What are Diversified Energy (DEC)'s 2026 adjusted free cash flow and leverage targets?

DEC forecasts adjusted free cash flow of about $430 million and a leverage target between 2.0x and 2.5x for 2026. According to the company, guidance includes ~$100 million of anticipated asset optimization proceeds.