Diversified Energy Co PLC on Tuesday reported a sharply higher dividend amid a swing to a profit on the back of commodity derivative settlements, while revenue edged up.
The Alabama, US-based oil and gas production company focused on the Appalachia and central region in the US said it swung to a pretax profit of $1.00 billion in 2023 from a loss of $799.5 million in 2022.
Diversified Energy shares fell 8.0% to 849.68 pence each on Tuesday morning in London.
Revenue, including settled hedges, climbed 2.2% to $1.05 billion in 2023 from $1.02 billion.
Notably, Diversified Energy reported a net gain of $178.1 million on commodity derivative settlements in 2023, compared to a $895.8 million net loss in 2022.
Natural gas production edged up 0.3% to 256.4 million cubic feet from 255.6 the year before. Natural gas liquid output jumped 12% to 5.8 million barrels in 2023 from 5.2 million barrels a year prior.
The company posted a final dividend of 29 US cents per share, up sharply from 4.38c a year ago. This brings the total dividend to $1.16, much higher than 17.25c paid for 2022.
Diversified Energy added that it is recalibrating its fixed dividend payout to align with the current equity market dynamics, peer trends, prevailing commodity prices and expected future allocations.
‘We understand the importance of this decision to our shareholders and do not take the decision lightly. By focusing our capital allocation on a fixed dividend level that is competitive with the industry and the market at large, we are prioritizing the acceleration of our balance sheet de-leveraging, with over $200 million in debt repayments during 2024, creating financial flexibility and a strong foundation to maximize long-term value creation for our shareholder base,’ it said.
Looking ahead, Chief Executive Officer Rusty Hutson said: ‘Diversified’s differentiated stewardship business model will thrive amid the backdrop of rising global energy demand, consolidation in the US. energy markets, and enhanced expectations for sustainably produced energy.’
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