Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) this week reported its Q3 performance, highlighting strong production levels and continued expansion into environmentally beneficial initiatives.
The company’s CEO, Rusty Hutson Jr., shared insights with Proactive into quarterly performance, methane capture projects, and potential regulatory impacts from the incoming U.S. administration.
We take a closer look at what was said here.
Proactive: Rusty, it’s good to see you. You’re out with your Q3 performance, and it’s strong numbers once again. A real buildup from Q2 and Q3.
Rusty Hutson: Yeah. We’re pretty pleased with the overall quarter.
Our production averaged 829 million cubic feet per day, which was great. This indicates our declines are low, which is where we want to be.
We reported EBITDA of $115 million, which was right on course with expectations, and free cash flow of $46 million. This morning, we also declared our third-quarter dividend of $0.29. All those factors were big positives for the quarter.
Proactive: You also mention the retirement of wells in the release. This has been a big project for the company, and you’ve sustained quite a bit of progress on this in Q3.
Rusty Hutson: Yeah. We’re way ahead of schedule on our internal goals for asset retirement. We have a commitment of 200 wells per year to the states where we operate, and we’re very close to meeting that target already.
We fully expect to complete that commitment by the end of the year.
Proactive: In the news release, you talk about coal mine methane capture. Could you explain what that is and why it’s significant for the company?
Rusty Hutson: Sure. Over the last 18 months, we’ve been working to unlock this opportunity. With our vast land holdings over coal seams and mines, we’re using those leases to capture methane that would otherwise be vented into the atmosphere.
We’re selling this captured methane and earning environmental credits for it.
This is a big opportunity for us. We mentioned in our release that it will generate $8 to $10 million this year, and we expect significant upside from it going forward.
Proactive: The company’s in a good position, as reflected by the numbers you’ve shared. Now, with an incoming administration in the United States, how might President-elect Donald Trump’s policies impact Diversified Energy?
Rusty Hutson: Oh, it’s definitely promising. For the last four years, we’ve dealt with increasing regulations from the current administration, which has made planning and operating challenging.
I believe the new administration will bring positives for our industry, especially through deregulation.
We need more pipelines and permitting reforms, which I think will receive attention. Although “drill, baby, drill” is a slogan, I don’t necessarily think it will lead to a spike in drilling.
However, it will give companies like ours the stability to plan and invest with confidence. Also, we’ll likely see a lift on LNG export restrictions, allowing us to meet commitments both domestically and internationally.
Proactive: It will be interesting to see how it all unfolds. Rusty, thank you so much for the great update today. We really appreciate your time.