Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) recorded approximately US$400mln (£317mln) in net income in the first quarter of 2023, which included a gain of US$365mln on the fair value of its derived contracts, per today’s trading statement.
Adjusted EBITDA for the quarter was US$150mln with a realised cash margin of 54%.
Price-linked operating expenses drove substantial reductions in unit production taxes, midstream expenses and certain third-party gathering and transportation costs.
The company recorded an average production of 139 thousand barrels of oil equivalent per day (Mboepd), equivalent to 833mln cubic feet equivalent per day (MMcfepd).
The exit rate for the quarter reached 145 Mboepd (872 MMcfepd), demonstrating strong growth. Notably, 15% of the production comprised liquids, marking a 30% increase since the company's entry into the central region of the US.
A quarterly dividend of 4.375 cents per share, paid in US dollars, marked a 3% increase against the first-quarter dividend paid out in 2022.
Diversified Energy maintained a favourable natural gas hedge position, with average floor pricing for the remainder of 2023 positioned 35% above the market strip.
"Our team performed exceptionally well during the first quarter, once again delivering record production as we optimise our low-decline assets and add the complementary Tanos assets,” said chief executive Rusty Hutson.
“Concurrently and despite the challenging commodity price environment, we reduced per-unit expenses and increased our cash margins to approximately 54% thanks to our disciplined hedging strategy and greater liquids exposure. Having responsibly hedged over 85% in 2023, approximately 80% in 2024 and approximately 70% in 2025 of our natural gas production, we continue to opportunistically add to our hedge portfolio where the price curve is higher.”