Diversified Energy Company reported exit rate production of 136,000 barrels of oil per day, or 816 million cubic feet equivalent per day, at the end of its first quarter on Monday.
The FTSE 250 firm said average production during the three months ended 31 March was 134,000 barrels or 803 million cubic feet equivalent per day, including the effect of temporary weather-related impacts.
It said it realised a cash margin of 48%, and an unhedged cash margin of 70%, with higher realised prices partially offsetting elevated price-linked, largely-variable expenses.
Diversified said it hedged additional 2023 and 2024 natural gas volumes during the period with an average NYMEX floor price 53% and 26% higher, respectively, compared to its portfolio average on 17 March.
After successful ABS financings in February, the board said around 90% of the company’s borrowings were fixed rate, fully-amortising, largely investment grade notes that insulated it from rising interest rates.
Its net debt-to-hedged adjusted EBITDA leverage ratio was 2.2x on 31 March, pro forma for recent acquisitions.
Diversified Energy said it had about $350m of liquidity at the end of the quarter.
“Following our four central region acquisitions in the second half of 2021, I’m pleased with the progress we are making to integrate and optimise these assets while adding to their scale and vertical integration to reduce costs,” said chief executive officer Rusty Hutson Jr.
“Mindful of cash flow and cash operating margins, we also added to our hedge positions to capture value from the higher forward commodity price curve.
“We continue to deliver on our sustainability commitments, and we have made further investments to expand our in-house well retirement crews.”
Hutson said that, with growing internal well-plugging capacity, the company expected to exceed agreed levels under state agreements, and become “a leading provider” of well retirement services to third-party operators and to the Appalachian states themselves.
“With our investments in emissions measurement technology gaining traction and giving us the capability to proactively detect, measure and repair fugitive emissions across our upstream and midstream asset base, I am increasingly confident in our ability to hit our committed targets of lowering methane emissions intensity by 30% by 2026 and 50% by 2030 on our path to net-zero greenhouse gas emissions by 2040.”
At 1113 BST, shares in Diversified Energy Company were up 0.1% at 120.42p.
Reporting by Josh White at Sharecast.com.
