Diversified Energy Company plc (LON:DEC, NYSE: DEC) has announced 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 Energy Company, 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 Diversified Energy 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.
