Diversified Energy beats consensus with record profits in 2023

(Sharecast News) - Natural gas group Diversified Energy Company (DEC) said it expect to deliver record profits above consensus forecasts for 2023 despite a "challenging" commodity price environment as production increased to an all-time high. DEC, which trades in London and also debuted on the NYSE last month, said adjusted EBITDA will come in at between $540m and $545m for the 12 months to 31 December, helped by higher prices and lower costs. The market forecast for EBITDA currently stands at $528m, up from $503m in 2022.

Adjusted operating costs per unit fell by 3% to $10.14 per barrel of oil equivalent (boe), while the average realised price increased by 2% over the year to $20.87/boe, which the company put down to its hedging strategy in light of a difficult period for commodity prices. Meanwhile, the adjusted EBITDA margin improved to 51% from 49% in 2022.

Average net daily production was 136.8m boe per day, up 1% on the year before but a new record for the group.

Chief executive Rusty Hutson Jr said DEC delivered a "solid financial performance" in 2023.

"Throughout the year, we have continued to focus our strategic initiatives on cash flow generation, capital discipline, and balance sheet management. Continued investment in our asset base resulted in substantial emissions reduction and operational efficiency gains," Hutson Jr said.

"We continue to evaluate opportunities to successfully execute our growth and return of capital strategies moving forward, as highlighted by our successful listing on the New York Stock Exchange - a key milestone that will deliver future value."

The UK-listed shares were up 3.4% at 975.73p by 0854 GMT.