11th Feb 2025 12:05
(Alliance News) - Diversified Energy Co PLC on Tuesday reported "strong" 2024 results in a trading statement, highlighting progress on its pending USD1.3 billion acquisition of Houston, Texas-based Maverick Natural Resources LLC.
The Birmingham, Alabama-based natural gas producer said adjusted earnings before interest, tax, depreciation, and amortisation totalled between USD470 million and USD475 million in 2024, with an Ebitda margin of 50%.
Diversified said it marked the seventh consecutive year of maintaining a cash margin of approximately 50% or higher.
Revenue for the year was driven by stable production, which averaged 132 million barrels oil equivalent per day, rising to 141 Mboepd in the fourth quarter.
Diversified also highlighted a USD50 million boost to cash flow through strategic initiatives, including divestitures and the monetisation of coal mine methane revenues.
The company returned USD105 million to shareholders over the year, including USD21 million in share buybacks, while also reducing its debt burden by over USD200 million.
Chief Executive Officer Rusty Hutson said: "We are committed to lowering costs and improving operational efficiencies across the organization, along with providing innovative solutions to extract hidden value from our asset base. The results we have achieved in 2024 strike at the heart of our business model and strategy.
"We believe that 2025 has the potential to be a transformative year for the company as we work to execute our strategic initiative to become the premier public company focused on managing mature producing assets."
Hutson continued: "The company's previously announced accretive acquisitions of Summit Natural Resources LLC and Maverick Natural Resources are proceeding as planned, and we have received encouraging comments from both shareholders and the public debt and equity markets.
"We are optimistic about our future and confident that our current efforts will continue to position us well to have a significant positive impact on shareholder value."
Diversified expects 2025 results to be driven by the integration of Maverick Natural Resources, which it is acquiring for USD1.3 billion in a deal set to close in the first half of the year.
The acquisition for a total of USD1.28 billion, first announced on January 27 and funded in part by a USD1.5 billion loan, adds "immediate scale, increases liquids production, and creates a combined company with long-term free cash flow generation".
Following the deal, Diversified and Maverick will have a combined enterprise value of USD3.8 billion. EIG Global Energy Partners, an energy-focused investor, will retain a 20% stake in Maverick.
Diversified said it remains focused on leveraging its scale and efficiency to drive further cash flow growth, with nearly 80% of its 2025 production hedged to mitigate commodity price volatility.
Shares in Diversified Energy were down 1.0% at 1,352.29 pence in London on Tuesday afternoon.
By Eva Castanedo, Alliance News reporter
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