Diversified Energy Company · NYSE:DEC
Diversified Energy — Q2 2024 Earnings Presentation
15 slides from Diversified Energy's earnings presentation, Aug 15, 2024
Slide 1: 2024 Interim Results Second Quarter
2024 Interim Results Second Quarter August 15, 2024
Slide 2: Disclaimer
The information contained in this document (the "Presentation") has been prepared by Diversified Energy In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with Company PLC (“Diversified” or the "Company”). This Presentation is not to b
Slide 3: Relentless Focus on Increasing Value: 1H24 Strategic Successes
RELENTLESS FOCUS ON INCREASING VALUE 1H24 Strategic Successes Generated $121 million of Free Cash Flow, representing an annualized yield of 38%(a) 855 143 Mboepd MMcfepd $15 Million Acreage Sales $108 million in debt principal payments made relating to June ’24 Exit Rate 2024 Year-to-Date amorti
Slide 4: 2024 Action Plan – Executing on Our Strategy
2024 ACTION PLAN – EXECUTING ON OUR STRATEGY $108 million $55 million ~$10 million $516 million (~2% of shares outstanding) of debt principal payments in Dividend Distributions of announced acquisitions value of shares repurchased Systematic Debt Fixed per-share Strategic Accretive Reduction Dividen
Slide 5: Growth Through Low-Risk, Low-Decline Production
GROWTH THROUGH LOW-RISK, LOW-DECLINE PRODUCTION Oaktree Capital Mgmt. Adding Operating Scale in Central Region Working Interest Acquisition $410 Million More than 325 Mmcfepd of production, inclusive of recent acquisitions, benefits from operations-focused strategy Announced Date Net Purchase Price
Slide 6: A Distinctively Capital-Efficient Business Model
A DISTINCTIVELY CAPITAL-EFFICIENT BUSINESS MODEL 35% 32% 33% Peer Average 28% 25% Annual Production Decline (%) 23% 23% 10% DEC Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Capital 10% 58% 91% 76% 71% 112% 83% Intensity Superior Capital Intensity Enhanced Free Cash Flows Greater Value Creation & Return
Slide 7: Built to Deliver Strong Cash Margins in Any Price Environment
BUILT TO DELIVER STRONG CASH MARGINS IN ANY PRICE ENVIRONMENT $6.64 53% 53% 54% 52% Average Henry Hub Price 50% 50% Cash Margins (Hedged) 49% ($/MMBtu) $3.09 $2.63 $2.08 $3.04 $2.07 $2.74 2018 2019 2020 2021 2022 2023 1H24 Hedging Strategy Protects Realized Pricing Bolt-On Acquisitions Replace Produ
Slide 8: Committed to Delivering a Foundation of Free Cash Flow
COMMITTED TO DELIVERING A FOUNDATION OF FREE CASH FLOW Diversified leads peers in Free Cash Flow conversion with 11x the peer group average 55% 41% 38% Six months ended June 30, 2024 Free Cash Flow Conversion 16% 15% (1)% (1)% (18)% (49)% DEC Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 L
Slide 9: Unlocking Value of Undeveloped Acreage
UNLOCKING VALUE OF UNDEVELOPED ACREAGE 8.6 Million Net Acres within Operating Footprint Significant Oklahoma Leasehold Position 99.9% of all acreage currently held-by-production with With ~$15 million of land sales recorded in 2024(b) minimal portfolio exposure to state or federal lands Undeveloped
Slide 10: A Compelling Investment Opportunity
A COMPELLING INVESTMENT OPPORTUNITY Discuss highlights, how to Potential for significant multiple Ability to unlock additional hidden value Peer trading multiple implies ~US$32 add comparison to trailing expansion in portfolio provides catalyst for re-rating price or 133% upside from recent levels 2
Slide 11: Advantageously Hedged for Maximized Cash Flows
ADVANTAGEOUSLY HEDGED FOR MAXIMIZED CASH FLOWS Robust Hedging Sets Stage for 2H24 Hedge Coverage Aligned with Forward Strip Avg Hedge Floor $3.34 NYMEX Strip 80% % Hedged +40% 70% $2.39 $3.50 $3.55 +99% $3.08 $3.16 $3.11 $3.15 $1.68 Avg Hedge Floor NYMEX Strip 1H24 Total Cash Cost 2025 2026 2027 ($/
Slide 12: Modernizing Operations Through Technology
MODERNIZING OPERATIONS THROUGH TECHNOLOGY Modern Field Developing a Scalable Platform Management Philosophy with Low Total Cost of Ownership Common Systems enhance process efficiency, reliability Cloud First / Wireless First eliminate technical debt, and improves data collection, warehousing and
Slide 13: Framework of Capital Allocation Strategy
FRAMEWORK OF CAPITAL ALLOCATION STRATEGY Systematic Debt Reduction Fixed Per-Share Dividend On target to reduce borrowings by Provide a sustainable capital return structure ~$185 million(a) Fixed $1.16 per share(b) provides consistent Decrease leverage to lower end of stated returns at peer-leading
Slide 14: Building a Strategic, Resilient Energy Producer
BUILDING A STRATEGIC, RESILIENT ENERGY PRODUCER Scaling a Differentiated Business Model: Right Company at the Highly accretive & strategic acquisitions enhance margins and unlock potential for Right Time….. cost synergies proving additional cash flows Delivering Shareholder Benefits: Leveraging reli
Slide 15: Corporate
Corporate 1600 Corporate Drive Birmingham, Alabama 35238-1087 (USA) div.energy Douglas Kris Wren Smith Senior Vice President Senior Manager Investor Relations & Investor Relations Corporate Communications dkris@dgoc.com cwsmith@dgoc.com +1 973 856 2757 +1 205 315 0553
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