Diversified Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total Commodity Revenue for Q3 2026 was $470 million.
• Net Income (Loss) for Q3 2026 was $(202) million, inclusive of a $(348) million loss on non-cash unsettled derivatives.
• Adjusted EBITDA for Q3 2026 was $256 million, compared to $285 million in Q3 2025.
• Adjusted EBITDA Margin for Q3 2026 was 56%, down from 66% in Q3 2025.
• Operating Cash Flow for Q3 2026 was $136 million.
• Adjusted Free Cash Flow for Q3 2026 was $153 million.
• Capital Expenditures for Q3 2026 were $39 million.
• Year-to-date (nine months ended Sept 30, 2026) Adjusted EBITDA was $782 million, up from $702 million in the prior year period.
• Year-to-date Adjusted Free Cash Flow was $427 million, up from $366 million in the prior year period.
• Leverage ratio was 2.66x as of September 30, 2026, compared to 2.42x in the prior year period.
• Consolidated debt consisted of approximately 72% in deleveraging non-recourse ABS and amortizing notes.
• Per unit revenues for Q3 2026 were $4.36/Mcfe ($26.16/Boe), compared to $4.82/Mcfe ($28.92/Boe) in Q3 2025.
• Adjusted Operating Cost per Unit remained flat at $2.08/Mcfe ($12.48/Boe) for Q3 2026 compared to Q3 2025.

Guidance and Future Outlook:

• The Company is reiterating its Full Year 2026 guidance, which excludes the Birch acquisition.
• Full Year 2026 Total Production guidance is 1,180 to 1,210 Mmcfe/d.
• Full Year 2026 Total Capital Expenditures guidance is $225 to $255 million.
• Full Year 2026 Adjusted EBITDA guidance is $960 to $1,010 million.
• Full Year 2026 Adjusted Free Cash Flow guidance is approximately $440 million.
• Full Year 2026 Leverage Target is 2.0x to 2.5x.
• The Birch acquisition is expected to close in the fourth quarter of 2026.
• Pro forma, the Birch acquisition is expected to increase Adjusted EBITDA by an estimated 55% and Adjusted Free Cash Flow by over 100%.
• The Company expects to realize continued significant operational synergies associated with a larger, consolidated position in Oklahoma.

Business Segments and Product Lines:

• Average production for Q3 2026 was 1,189 MMcfepd (198 Mboepd).
• Production volume mix for Q3 2026 was 72% Natural Gas, 14% Oil, and 14% NGLs.
• Year-to-date average production was 1,213 MMcfepd (202 Mboepd) with the same commodity mix.
• The Company completed drilling of the first four wells in its 20 gross well Oklahoma development program, with completion activities underway.
• The Company received approximately $8.6 million in cash flows from its 40% ownership in the Camino PDP special purpose vehicle, including $6.6 million in residual operating cash flow and $2.0 million in management fees.
• Value generated from year-to-date acreage sales reached approximately $149 million.
• Midstream and Transportation expenses decreased during Q3 2026 compared to prior period levels.

Market and Competitive Landscape:

• The Birch acquisition will create a top-15 U.S. publicly listed independent oil & gas company based on production.
• The acquisition provides a scaled, vertically integrated position in the Permian Basin.
• The Company sees a long runway for future consolidation in the Permian Basin.
• The Company's ABS notes have an investment grade rating.

Risks and Challenges:

• The press release notes that actual results may differ materially from forward-looking statements due to risks including commodity prices, regulatory changes, and the ability to successfully integrate acquisitions.
• Specific risks include the timing and completion of the Birch acquisition, satisfaction of closing conditions, and receipt of regulatory approvals.
• Risks also include the ability to realize anticipated benefits and synergies of the Birch acquisition.

Management Commentary and Tone:

• CEO Rusty Hutson, Jr. highlighted strong execution by field teams, commitment to operating safely, managing costs, and improving asset performance.
• Management expressed pride in the operational discipline and the ability to generate predictable cash flows while advancing strategic growth.
• Management described the Birch acquisition as having "exceptional quality and scale" and a strong foundation for future growth.
• The tone emphasizes confidence in the company's ability to sustain cash flow through commodity cycles and deliver long-term value.

Other Key Points:

• The Company is on schedule for the expected fourth-quarter closing of the acquisition of Birch Resources.
• The portion of Birch production related to ABS financing has been hedged prior to closing.
• Shareholder returns year-to-date were approximately $157 million, including $94 million in share repurchases and $63 million in fixed dividends, representing an approximate 17% shareholder return yield.
• The Company received approval to upsize its credit facility from $900 million to $1 billion subsequent to the end of the third quarter.
• Liquidity as of September 30, 2026, was $506 million in credit facility availability and unrestricted cash.
• The Company retired $313 million (approximately 11%) in outstanding debt under certain ABS notes in 2026.
• A 3Q26 dividend of $0.29 per share was declared.
• Share repurchases in Q3 2026 (through Nov 4, 2026) totaled 698,502 shares (~1% of shares outstanding).
• Year-to-date share repurchases (through Nov 4, 2026) totaled 6,676,753 shares (~9% of shares outstanding).
• The Company will host a conference call on November 5, 2026, at 8:30 AM ET.