23rd Oct 2024 10:38
(Alliance News) - Diversified Energy Co PLC on Wednesday said it has signed a supply contract with a major liquefied natural gas export facility in the Gulf Coast.
Starting in November Birmingham, US-based Diversified Energy will deliver 40 billion cubic feet of natural gas over a period of three years. This will occur under a fixed pricing construct indexed to rates in the Gulf Coast.
This deal reflects the gas and oil production company's commitment to ensuring energy security for its trading partners during a period that sees them confronted by "supply disruptions, geopolitical tensions, rising regional demands, and changing consumption patterns".
The recent strength of LNG prices has allowed Diversified to top up its hedge portfolio in 2025 through to 2027, recording an average NYMEX hedge price of approximately USD3.45 per metric million British thermal unit.
The firm noted it would further update the market on its hedging schedule in its third-quarter trading statement.
Diversified Energy Chief Executive Rusty Hutson said: "This supply agreement to a Gulf Coast LNG export facility is a great example of the market's recognition of Diversified's reliable natural gas production and operational efficiency while providing another lever for the company to enhance margins and deliver consistent cash flows.
"In line with the company's strategy to reduce commodity price risk, we believe this agreement, along with tactically adding to our 2025-2027 hedge position during the recent natural gas price strength, will help us to provide consistent, robust cash margins."
Shares in Diversified were trading down 1.5% at 902.46 pence on Wednesday morning in London.
By Christopher Ward, Alliance News reporter
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