Diversified Energy Regulatory News (DEC)

5 July 2021

Diversified Energy Company PLC

("Diversified" or the "Company")

Completion of Blackbeard Acquisition

Diversified Energy Company PLC (LSE: DEC) is pleased to announce that it has completed the purchase of certain upstream assets and related infrastructure within its Central Regional Focus Area ("Central RFA") from Blackbeard Operating LLC ("Blackbeard") (the "Acquisition") as previously announced on 20 May 2021.

Acquisition Highlights

• Enlarges the Company's presence in its Central RFA with an entry into the Barnett producing area

• Net consideration of $166 million represents a ~3.5x cash multiple on approximately $48 million of estimated next twelve months' Adjusted EBITDA

• Current production(a) of ~16 MBoepd (~95 MMcfepd) includes ~820 net operated wells with an average production-weighted well age of 11 years

• PDP reserves of ~79 MMBoe (473 Bcfe) with pretax PV10 of ~$238 million at the effective date of 1 April 2021 and based on 7 May 2021 NYMEX strip

• Retention of ~50 skilled Blackbeard field personnel who provide continuity of operations and who will facilitiate clear identification of Smarter Asset Management opportunities to create value

• Hedge contracts covering ~80% of remaining CY2021 production at an average floor price of $2.93/MMBtu

For the Acquisition, Diversified paid total net consideration of approximately $166 million ($180 million, gross) after customary purchase price adjustments with a 1 April 2021 effective date. The Company funded the Acquisition through a combination cash on hand, including funds from its recent issuance of equity shares in May, and existing availability on the Company's Revolving Credit Facility.

Rusty Hutson, Jr., CEO of the Company commented:

"Today's announcement marks an important step in broadening our operating footprint within the Central Regional Focus Area. Closing this transaction marks our entry into the historic Barnett producing area, which offers an attractive area for future growth. Similar to our nearby and recently closed acquisition of Indigo assets in the Cotton Valley area, the Barnett area provides access to a portfolio of future consolidation opportunities which meet our preferred asset criteria and afford us the opportunity to build scale and operating efficiencies. These mature Barnett wells further expand our base of low-decline production and Smarter Asset Management opportunities. As with each transaction, I would like to welcome the Blackbeard employees who work on these wells to the Diversified family. We look forward to working with these talented individuals to deploy our Smarter Asset Management efforts across the acquired assets to create value for our shareholders."

Footnotes (for Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's 2020 Annual Report):

Market Abuse Regulation

This announcement contains inside information for the purposes of article 7 of the UK version of regulation (EU) no. 596/2014 on market abuse ("UK MAR"), as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, and regulation (EU) no. 596/2014 on market abuse ("EU MAR").

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About Diversified Energy Company PLC 

Diversified Energy Company PLC is an independent energy company engaged in the production, marketing and transportation of primarily natural gas related to its synergistic US onshore upstream and midstream assets.