Diversified Energy Co PLC reported a year-on-year decline in production, amid a sharp fall in profit due to fair value adjustments, and announced the completion of a US acquisition.
The Alabama-based and US-focused natural gas producer on Thursday said net profit dropped to $15.7 million in the first half of 2024 from $630.9 million a year prior.
Notably, it reported a loss on fair value adjustments of unsettled financial instruments of $80.1 million, swung from a gain of $760.9 million.
Average net daily natural gas production fell 12% to 746 million cubic feet equivalent per day from 852 million reported a year prior.
It was up 3.2% from 723 million cubic feet equivalent per day posted for the first quarter.
The company declared a second quarter dividend of 29 US cents per share, compared to 4.38 cents a year before. However, Diversified last year conducted a share consolidation of 20 shares into 1, meaning the second quarter dividend effectively is down 67% from a year ago.
Diversified had cut its quarterly dividend to 29 cents in the first quarter, and this reduced payout was maintained in the second quarter.
Diversified Energy noted that it additionally returned a total of $65 million in the first half of the year via its share buyback programme, repurchasing 2% outstanding shares.
Chief Executive Officer Rusty Hutson Jr said ‘We remain committed to our balanced capital allocation framework, with the diversity and strength of our asset base providing a solid foundation for accretive growth and value creation for our shareholders, while maintaining our position as the ’right company at the right time’ to responsibly manage long-life, mature producing assets.’
On Friday, Diversified Energy said it completed its acquisition of natural gas properties and related facilities from Crescent Pass Energy for a purchase price of $106 million. The acquisition net purchase price is $101 million after purchase price adjustments, which will be paid in cash and shares.
Diversified will issue to Crescent Pass 2.2 million new Diversified shares, about 4.8% of its total, and pay $71 million in cash.
The acquisition of the assets, which are located in eastern Texas, brings in proved, developed and producing reserves of 28 million barrels of oil equivalent and current net production of 6,000 barrels of oil equivalent per day.
CEO Hutson said: ‘We are excited to announce the completion of another attractively-priced acquisition of Central Region assets which stands to benefit Diversified as a result of our continued growth in scale and density throughout the asset footprint.’
Diversified Energy shares were 1.6% higher at 1,028.63 pence each on Friday morning in London.
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