BIRMINGHAM -
Additionally, the Company is pleased to announce that it has entered into a conditional agreement with
FY 2023 Final Results: Operating and Financial Highlights
Record average net daily production: 821 MMcfepd (137 MBoepd) o December exit rate of 775 MMcfepd(a) (129.2 MBoepd)
Peer-leading consolidated corporate production decline rate of 10%(b)
Year end 2023 reserves of 3.8 Tcfe (642 MMBoe; PV10 of
Net income of
Adjusted EBITDA of
Adjusted EBITDA Margin of 52%(f)
Total Revenue, inclusive of hedges, grew2% to
Year-end liquidity of
Commenced trading on the
Recommending a final quarterly dividend of
2023 Sustainability Highlights
Achieved 2030 Scope 1 methane intensity goal (-50% from 2020) seven years ahead of schedule 33% reduction in Scope 1 methane intensity to 0.8 MT CO2e/MMcfe from 1.2 in 2022
NGSI(j) Methane Emissions Intensity 0.11% CO2e/MMcfe vs. 0.21% in 2022
Won ESG Report of the Year from ESG Awards 2023
Awarded OGMP 2.0's Gold Standard for emissions reporting for the second consecutive year
Increased
The Company anticipates issuing its 2023 Sustainability Report in
Highly Synergistic and Accretive Acquisition of Oaktree Interest
Key Acquisition Highlights
Consolidates working interest in existing DEC operated wells in the
Estimated gross purchase price of
Favorable per unit cost benefit resulting from no additional G&A Expense
Offsets natural declines with expected 122 MMcfepd in additional production (80% Natural Gas)
Provides a 15% increase in overall Company production
Provides robust cash flow with 2024 Adjusted EBITDA of
Increases Diversified's exposure to favorable
Creates opportunity to layer additional hedges into a stronger commodity price environment
Acquisition Details
The Acquisition represents a continuation of Diversified's successful multi-year track record of strategic asset purchases, whereby the Company will acquire Oaktree's proportionate interest in the previously announced Indigo, Tanos III,
The Assets include wells currently operated by Diversified throughout the
As part of the Acquisition, Diversified will acquire certain hedging contracts from Oaktree that will provide ongoing protection despite the recent downturn in the gas market at volumes consistent with the Company's overall hedging strategy while also maintaining strong long-term cash upside potential from the Assets.
Consideration for the Acquisition gross purchase price of
Timetable and Conditionality
The Acquisition is classed as a class 1 transaction under the Listing Rules of the
The circular containing the notice convening the General Meeting will be published in due course. In addition, the Acquisition is subject to the satisfaction of other conditions including receipt of regulatory approvals. It is currently expected that completion of the Acquisition will occur in the second quarter of 2024.
The Path Forward- FOCUS FIVE
In the year ahead, the Company is taking a renewed focus on the principles on which Diversified was founded: investing in strategic, accretive acquisitions, delivering greater operational efficiencies, taking proactive steps to ensure the sustainability of assets, keeping costs low and de-leveraging the balance sheet - all while returning value to shareholders.
Diversified has set in motion its 'Focus Five' in order to demonstrate meaningful expansion of free cash flow generation while growing the company in a disciplined manner. That plan consists of the following core objectives: Optimized cash flow generation
Cost structure optimization
Financial and operational flexibility
Sustainability innovation
Scale through accretive growth
Updated Capital Allocation Framework
Since first initiated in 2017, Diversified has delivered more than
The Company has undertaken a reassessment of its capital allocation strategy to weigh the intrinsic value of the current share price level against the historical practice of returning capital through dividends. The Board and executive management team have jointly evaluated a number of potential scenarios to align the dividend level with expected future capital allocation needs, peer trends, current commodity prices, and current equity market dynamics.
The result of this assessment is the Board's realignment of capital allocation and is designed to best position the Company to create long-term shareholder value through the balanced combination of:
Systematic debt reduction
Fixed per-share dividend
Strategic share repurchases
Accretive strategic acquisitions
In conjunction with the asset acquisition and following the Company's capital allocation policy review, the Board has set the new quarterly dividend to
Estimated pro forma dividend yield relative to
CEO
'The gas market is sending a clear signal today; there is too much supply in the marketplace. Producers have already started to respond with reduced activity levels and production guidance. We believe Diversified is one of the best-positioned operators to take advantage of this lower commodity price marketplace. We are highly hedged in 2024, and our production base has one of the lowest decline profiles in the gas industry.
As we navigate the path forward in this commodity price environment, we are going on offense to be more opportunistic in our strategic approach with a strengthened balance sheet and to capitalize on any periods of near-term weakness. These times have historically provided extreme valuation disconnects where disciplined businesses have been afforded the ability to meaningfully grow production. We have initiated our Focus Five objectives, which I believe will help to further differentiate the Company from its peers in unlocking corporate value throughout 2024 and into the future.
'Upon rigorous assessment, we are recalibrating our fixed dividend payout to align with current equity market dynamics, peer trends, prevailing commodity prices, and expected future capital allocations. We understand the importance of this decision to our shareholders and do not take the decision lightly. By focusing our capital allocation on a fixed dividend level that is competitive with the industry and the market at large, we are prioritizing the acceleration of our balance sheet de-leveraging, with over
'Diversified's differentiated stewardship business model will thrive amid the backdrop of rising global energy demand, consolidation in the
Termination of Previously Announced Tender Offer
Further to the Company's announcement on
Contact:
Tel: 44 (0)800 756 3429
About
Diversified is a leading publicly traded energy company focused on natural gas and liquids production, transport, marketing, and well retirement. Through our differentiated strategy, we acquire existing, long-life 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
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