DISCLAIMER The information contained in this document (the Presentation) has been prepared by Diversified Accordingly, no assurance can be given that the forward-looking statements will prove to be accurate Energy Company PLC…
DIVERSIFIED ENERGY PROFILE Long-Life, Low Durable LSE: DEC (FTSE250) Efficient Cash Decline Production Pricing Strategy Generation Market and Trading Summary (as of 18 March 2022) Share Price 1.12 / 1.48 9% 90% 20% Market Cap (MM)…
Executive Summary Rusty Hutson, Jr Chief Executive Officer DIV.energy
BUILT FOR SUSTAINABLE SHAREHOLDER RETURNS 179% TSR since 2017 IPO (c) +179% Total Return (Rebased to 100) Annual Average Nat Gas Price (/MMBtu) Annual Dividends per Share (/share) 4.95 100 3.84 16.50 17.00 3.11 13.92 15.25…
2021 HIGHLIGHTS Completed Strategic Entry into Central Region Four acquisitions of high margin assets; expanded opportunity set Produced Record Annual Volumes of 119 Mboepd 19% increase over 2020 through growth and Smarter Asset…
ADVANCING OUR ESG INITIATIVES 15 Million in Emissions-Related Capital Commitments Inaugural investment for high impact projects to reduce emissions intensity Emissions detection supported handheld device deployment and aerial…
SUBSTANTIAL PROGRESS ON ESG COMMITMENTS ENVIRONMENTAL Improving Emissions Intensity Metrics(d) Improved the accuracy of emissions reporting with Project Fresh 7.4 emissions inventory process(a) Realised 18% and 6% reductions in GHG and…
DEVELOPING IMMEDIATE AND LONG-TERM ACQUISITION UPSIDE Integration of Assets Application of People, Process, Systems Apply standardised processes and Consolidate acquisitions into standardised operational and systems to acquisitions…
SMARTER ASSET MANAGEMENT IN ACTION Midstream Pipeline Addition Reaching premium-priced end markets Increase volume of gas re-routed for price optimisation with addition to previously constructed midstream assets in Appalachia Pipeline…
PRODUCTION AND RESERVES 139 35% Increase in December Exit Rate Production December Exit Rate 103 Central Region and SAM impacts set stage for record (Mboepd) annual production in 2021 5% declines in Appalachia continue to…
LOWERING PLUGGING COSTS AND EXPANDING WELL RETIREMENT CAPACITY Expanding In-House Asset Retirement 30% Savings with In-House Teams 2022 acquisition of Next LVL Energy propels Lower costs in West Virginia drive 10% capacity towards…
Financial Results Eric Williams Chief Financial Officer DIV.energy
2021 SUMMARY FINANCIALS INFORMATION 2021 Annual Results BY THE NUMBERS Available online at DIV.energy DELIVERING STABILITY THROUGH VOLATILITY 1.0 Billion 664 Million (325) Million IFRS Total Revenue Unhedged Adj. EBITDA Net…
BUILT TO DELIVER STABLE MARGINS THROUGH VOLATILE COMMODITY CYCLES 54% Cash Margin 50% Cash Margin Robust 50% Cash Margin in 2021 38% Unhedged 65% Unhedged 9% lower Adjusted G&A per unit and higher Realised Price 15.88 realised…
WELL RETIREMENT COST IMPROVEMENT DRIVING SIGNIFICANT LT VALUE Potential for Portfolio-Wide Savings Could Generate Becoming a Leader in Well Plugging 500 Million in Additional Distributions Added investments in Diversifieds teams…
ORGANIC REINVESTMENT OF SIGNIFICANT FREE CASH FLOW Generating 252 Million in 2021 Free Cash Flow Durable 50% Cash Margins Support 252 Million in 2021 Free Cash Flow Focus on hedge-protected revenues and efficient operations results in…
SIMPLE, LOW-COST, HIGHLY-AMORTISING STRUCTURE ESG-linked coupons(a) reflect Liquidity-enhancing long-term Competitive cost of capital commitment to sustainability financing alternative to RBL with low, 5% fixed rates Leverage(b) 2.1x…
SETTING THE STAGE FOR ORGANIC GROWTH WITH RECORD LIQUIDITY 412 Million in Pro Forma Liquidity(a) Unlocking Asset Value with Record availability sets the stage for organic reinvestment potential including M&A and other capital projects…
2022 OUTLOOK AND VALUE DRIVERS Maintain Focused Execution on Aggressively Drive Reductions in Leverage Financial Opportunities Operations Optimisation Absolute Emissions and Improve Profitability Create value through effective Build…
DIVERSIFIED BROKERS Corporate Tennyson Stifel PO Box 381087 Tennyson Securities Stifel Nicolaus Europe Ltd Birmingham, Alabama 65 Petty France 150 Cheapside 35238-1087 (USA) London SW1H 9EU London EC2V 6ET https://div.energy Jim…
Appendix DIV.energy
WHY INVEST IN DIVERSIFIED Differentiated Focus on Efficient, Sustainable Operations Dependably delivering cash flows and shareholder distributions throughout commodity price cycles with a vertically integrated value chain Firmly…
DRIVING VALUE THROUGH ACCRETIVE ACQUISITIONS Appalachia Central PA OK OH 2.3 Billion WV 20 acquisitions since LA 2017 IPO TX VA KY TN Enervest Eclipse Resources Diversified Seneca Resources Inc. Resources NGO 2001…
COMMODITY DERIVATIVES PORTFOLIO (AS OF 17 MARCH 2022) Natural Gas Financial Derivatives, (Natural Gas Amounts Presented in MMBTU(a)) Natural Gas Fi na nci a l Deri va ti ves Contra cts Natural Gas (MMBtu, /MMBtu) 1Q22 2Q22 3Q22 4Q22…
COMMODITY DERIVATIVES PORTFOLIO (AS OF 17 MARCH 2022) Natural Gas Physical Contracts , Oil and NGL Financial Derivatives (Natural Gas Amounts Presented in MMBTU(a)) Natural Gas Phys i ca l Deri va ti ves Contra cts Natural Gas +…
HISTORICAL OPERATING EXPENSES BY NATURE 8.55 (1.43/Mcfe) 7.71 7.95 /Boe (1.28/Mcfe) (1.33/Mcfe) Efficiencies of Scale in Appalachia 1.34 6.92 (1.16/Mcfe) 1.21 Consolidation, unconventional production drives 1.17 47% reduction in…
AMORTISING DEBT STRUCTURES DRIVE DISCIPLINED REPAYMENT Key Attributes for Diversified 132 Ability to scale financing through additional ABS issuances Long-term hedging provides cash flow stability for consistent repayment 129…
ILLUSTRATIVE CASH FLOW REPLACEMENT MODEL 343 (91) Low Declines Limit Replacement Capital 252 130 Industry-leading declines of 9% results in limited need to replace production over time USD Millions 94 Ample Cash Flows for…
OUR ESG COMMITMENTS: NAVIGATING THE PATH TO NET ZERO Near-Term Plan Mid-Term Plan Long-Term Plan 2022 2023-2026 2027+ Utilising new detection equipment, 30% reduction in methane emissions 50% reduction in methane emissions initiate…
SMARTER ASSET MANAGEMENT INITIATIVES ACROSS THE PORTFOLIO SAM Drives Efficiency and Sustainability Universal Appalachia Central Return wells to production Swab wells to relieve hydrostatic Optimise wellhead compression pressure…
INTEGRATED MARKETING TEAM DELIVERS ON VERTICAL INTEGRATION A Top 25 Marketer(a) / Active in 20+ Markets Experienced Team Summary of Assets Managed Gas & NGL Marketing Producer services Gas Marketing Scheduling Midstream 1.2 BCF of…
MARKETING 99% OF PRODUCED VOLUMES TO MAXIMISE PRICING Advantages in Appalachia Managing volumes through owned midstream assets allows: Gas reroutes to highest value markets Avoid interstate capacity constraints without firm…
BUILDING DIGITAL OPERATIONS: THE ROLE OF TECHNOLOGY AT DIVERSIFIED Vision: Drive Value from the Wellhead to the Board Room Results Scalable digital platform Strategy supporting rapid acquisition Goals model Safety First…
GLOSSARY British pound sterling US dollar Adjusted EBITDA Adjusted EBITDA is an APM. Please refer to the APM appendices within this presentation for information on how this metric is calculated and reconciled to IFRS measures.…
GLOSSARY (CONTINUED) Mcf Thousand cubic feet of natural gas Mcfe Thousand cubic feet of natural gas equivalent Midstream Midstream activities include the processing, storing, transporting and marketing of natural gas, NGLs and oil.…
GLOSSARY(CONTINUED) TCFD Task Force on Climate-Related Financial Disclosures Total Cash Cost Total Cash Cost is an APM. Please refer to the APM appendices within this presentation for information on how this metric is calculated and…
Supplemental Information DIV.energy
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Year Ended 31 December 2021 31 December 2020 Revenue 1,007,561 408,693 Operating expense (291,213) (203,963) Depreciation,…
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Year Ended Year Ended 31 December 2021 31 December 2020 31 December 2021 31 December 2020 ASSETS EQUITY AND LIABILITIES Non-current assets: Shareholders'…
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOW Year Ended Year Ended 31 December 2021 31 December 2020 31 December 2021 31 December 2020 Cash flows from operating activities: Cash flows from investing activities:…
REVENUE RECONCILIATION (NON-IFRS) Amounts in thousands unless otherwise noted a) Certain expense reclassifications were made to conform previously reported results to current presentation 44 DIV.energy 44
ALTERNATIVE PERFORMANCE METRICS (UNAUDITED) DEC uses APMs to improve the comparability of information between reporting periods and to more accurately evaluate cash flows, either by adjusting for uncontrollable or non-recurring factors,…
ALTERNATIVE PERFORMANCE METRICS (UNAUDITED) Hedged Adjusted EBITDA and As used herein, EBITDA represents earnings before interest, taxes, depletion, depreciation and amortisation. Hedged Adjusted EBITDA includes adjustments for…
ALTERNATIVE PERFORMANCE METRICS (UNAUDITED) Net Debt and Net Debt-to-Hedged As used herein, Net Debt represents total debt as recognised on the balance sheet less cash and restricted cash. Total debt includes DECs current portion of…
ALTERNATIVE PERFORMANCE METRICS (UNAUDITED) Free Cash Flow and As used herein, Free Cash Flow represents Hedged Adjusted EBITDA less recurring capital expenditures, asset retirement costs, cash interest expense and cash paid for income…
ALTERNATIVE PERFORMANCE METRICS (UNAUDITED) Base G&A As used herein, Base G&A represents total administrative expenses excluding non-recurring and/or non-cash acquisition and integration costs. The Directors use Base G&A because this…
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