Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has lifted its targets for this year on the back of a strong third quarter, pairing record earnings with punchier shareholder payouts.
The US-focused producer said today it now expects 2025 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $900–$925 million, about 7% higher than before, and has nudged its adjusted free-cash-flow goal up 5% to roughly $440 million.
The quarter to 30 September delivered scale and margin in tandem. Average output rose to 1,127 million cubic feet equivalent per day (188,000 barrels of oil equivalent per day), up 36% year on year, with a 74% tilt to natural gas and 13% each to natural gas liquids and oil.
Revenue including settled hedges came in at $500 million, more than double a year earlier, while adjusted EBITDA reached a record $286 million. Free cash flow after capex and interest was $144 million, helped by $74 million of proceeds from asset sales under a portfolio optimisation programme.
If the acronyms grate, a quick refresher: EBITDA is a cash-style profit gauge that strips out financing and non-cash charges; “free cash flow” is the surplus after spending to keep the business running and after interest, the money available for debt pay-down, deals and dividends.
Diversified’s adjusted operating costs landed at $2.08 per thousand cubic feet equivalent, leaving a 66% EBITDA margin. Hedging, financial contracts that lock in prices, supported a realised revenue of $4.82 per Mcfe.
The balance sheet is moving the right way. Net debt to adjusted EBITDA sits at 2.4 times, an improvement of roughly 20% since year-end 2024, with about 70% of borrowings in non-recourse, amortising asset-backed notes.
The company retired $203 million of those notes in the first nine months and finished the quarter with $440 million of liquidity.
Cash returns are accelerating. Year to date, Diversified has returned about $146 million through dividends and buy-backs, including the repurchase of roughly 5.1 million shares (~7% of the current share count).
A third-quarter dividend of $0.29 a share has been declared.
Operationally, management highlights cost and synergy capture from bolt-on deals and in-house services.
An Appalachian compressor station acquired for $500,000 is said to be delivering more than $3 million a year in run-rate savings, including credits related to coal mine methane.
Asset sales brought in $144 million so far this year, while the proposed acquisition of Canvas Energy, funded with support from partner Carlyle, is slated to complete in the fourth quarter, deepening overlap in Oklahoma.
“I am very pleased to report that our year-to-date results have exceeded our plans,” said chief executive Rusty Hutson, adding that momentum underpins the higher guidance and continued balance-sheet discipline as the group pursues its US redomicile and primary New York listing.