Proactive Investors - Diversified Energy Company PLC (LON:DEC) chief executive Rusty Hutson described the company’s first quarter as “solid”, and said that an ongoing focus on cost-cutting is paying off.
"Building a portfolio of high-performing, mature producing assets and optimizing the cost structure has been the foundation of our strategic vision since inception.
“The company's ability to continue to deliver solid results, both operationally and financially, reinforces the success of this strategy,” Hutson said in the statement.
“I am pleased that our ongoing focus on cost reduction opportunities has translated directly into a 7% sequential quarterly operating cost improvement, allowing us to effectively navigate the current natural gas market headwinds.”
DEC reported its first-quarter production at 121,000 barrels oil equivalent, with the quarter’s ‘exit’ rate marked at 124,000 barrels.
This meant the production performance was “essentially flat” and was a continuation from the prior quarter, which also yielded 121,000 boepd.
Operating cash flow amounted to $107 million, and after non-cash adjustments (for fair-value of derivatives held by the company), it reported a $15 million net loss.
Earnings (adjusted EBITDA) came in at $102 million and the company said it had $74 million of free cash flow in the quarter as $74 million.
Operating cash costs per unit reduced by around 7% quarter-on-quarter, to $10.10 per barrel equivalent.
In the field, the company is enhancing operations through an expansion of facilities at the Black Bear site.
“I am excited to announce that our Black Bear processing facility has begun service. Completing this strategic project demonstrates our success in leveraging in-house expertise to unlock value and facilitate meaningful cash flow generation,” Hutson said in a statement.
“This facility will integrate our own natural gas production in the area and is expected to deliver approximately $9 million of additional margin creation annually while providing additional potential upside from any non-utilized capacity to process third-party gas from other operators and accretive bolt-on acquisitions in the Cotton Valley and Haynesville region.”
For shareholders, DEC confirmed it has so far returned $830 million to shareholders through dividends and share buybacks since its 2017 stock market float.
In 2024, it has bought back 400,000 shares worth £3.9 million, at an average price of £9.74 each, and it announced an interim dividend of 29 cents per share for the quarter.
Hutson added: “I am confident that the reliability and consistency of our assets will continue to provide meaningful cash flow, financial flexibility and support our ability to return value to shareholders."