WTI (Dec) $78.26 u/c, Brent (Jan) $82.47 -5c, Diff -$4.21 -5c.

USNG (Dec) $3.11 -9c, UKNG (Dec) 120.85p +3.25p, TTF (Dec) €48.34 +€0.895.

Oil price

Oil remains quiet, equity markets surged yesterday on the inflation data, the US was 0% in October and 3.2% y/y, a touch below the whisper helped by energy prices and food costs. Rates are now unlikely to rise anytime soon and the dollar continues to weaken. Today the UK has also seen a low number of 4.6%, again against forecast of 4.8%. 

The IEA report managed to go against its own anti fossil fuel views with a hike in demand for the end of 2023 and 2024 where huge demand is expected from chemicals in South East Asia. The API stats were modest, crude built by 1.3m barrels, gasoline by 0.2m and distillates drew 1m b’s. EIA stats return today after a 2 week delay while they rework the data. 

Diversified Energy Company

Diversified Energy has announced it is trading in line with expectations and provides the following operations and trading update for the quarter ended 30 September 2023.

Delivering Reliable Results

•     .Average net daily production: 804 MMcfepd (134.0 Mboepd)

◦     Average net daily production of 814 MMcfepd (135.7 Mboepd), adjusted for extraordinary maintenance

◦     September 2023 exit rate of 806 MMcfepd (134.4 Mboepd)

◦     Maintained industry-leading consolidated corporate decline rate of ~10%

•     Recorded Adjusted EBITDA(a) of $140 million

◦     Adjusted Operating Cost per Unit of $1.63/Mcfe ($9.81/Boe)(b) down 2% versus 1H23

◦     Adjusted EBITDA Margin(c) of 52%

•     Annualized Free Cash Flow Yield of 22%(d)including the impact of working capital changes

•     Leverage ratio of 2.4x(e)

◦     Affirmation by Fitch of all five of its rated ABS notes as BBB or higher (Investment Grade)

•     Current Liquidity of ~$135 million

•     Declared 3Q23 interim dividend that is maintained at $0.04375 per share 

Creating Value Through Stewardship

•     Winner of Best ESG Report 2023 from ESG Awards Europe

•     Awarded Oil & Gas Methane Partnership (OGMP) Gold rating for the second year

•     Increased MSCI sustainability rating to AA

•     On track to retire ~200 Diversified wells in 2023

◦     136 of 169 external wells retired YTD in conjunction with state orphan well programs

Commenting on the results, CEO Rusty Hutson, Jr. said:

We have once again delivered consistent and reliable results during the third quarter despite continued commodity price headwinds. Our solid operational execution against the high-quality assets we manage, the ongoing integration of our most recent acquisitions of Tanos II and ConocoPhillips, and our focus on efficiency delivered sequential cost improvement, which translated into 52% Adjusted EBITDA margins. The asset performance and stability of cash flows were further corroborated  by Fitch’s recent affirmation of its ABS notes rating. 

The combination of peer-leading, low capital intensity, and low corporate declines creates a distinct competitive advantage for our Company, mitigating the need to replace production while maintaining free cash flow generation from an asset base that provides consistent production. Implementing our smarter asset management programs enhances the discretionary cash flow we generate and increases the availability of capital for reinvestment, debt repayment, and return of capital to shareholders, ultimately creating long-term value.

I am also incredibly proud of the ongoing focus on sustainability, with our achievements being rewarded by a distinguished panel of European judges bestowing our 2022 report, “Decarbonising While Delivering,” with the ESG Report of the Year, recognizing it as the most accurate, best structured and informative report.

Our commitment to providing long-term total returns to shareholders is underscored by our consistent dividend history, declaring our 25th consecutive dividend, returning over $800 million of capital to shareholders, including share repurchases, since going public in 2017.

The management team and Board remain focused on executing value-enhancing initiatives to drive additional returns for our shareholders.”

For yet another quarter DEC has presented an enviable trading update in which average production was 804 MMcf/d in line with the market whisper, perhaps more important is that they have maintained industry-leading consolidated corporate decline rate of ~10%.

This has led to $140m of EBITDA and with adjusted Operating Cost per Unit of $1.63/Mcfe ($9.81/Boe),(b) down 2% versus 1H23, gives adjusted EBITDA Margin(c)of 52% and yet another highly impressive annualized Free Cash Flow Yield of 22%,(d) including the impact of working capital changes giving a leverage ratio of 2.4x.

The company has also announced its third quarter dividend which is maintained at $0.04375 per share at which DEC yields over 20% and company policy is to pass on its incredible FCF yield and very high margins to shareholders. One of the valuations used by investors is that yield and with inflation falling in the US and the UK recently, rival investments such as Government Bonds are slowly becoming less of a rival attraction.

I spoke to Rusty Hutson this morning and remain very confident that DEC is in a very strong place, it keeps all its options open in terms of M&A and of course has an abundant portfolio from which to trade. It is still transitioning assets from asset deals in the last year and that includes using any drilled but uncompleted wells in the portfolio. 

I remain totally convinced that DEC has an amazing portfolio from which it can trade and create significant free cash flows and a very high margin, this can continue and in the meantime with a yield of over 20% and in due course every chance of a capital appreciation which makes DEC a compelling investment. 

Operations and Finance Update

Production and Asset Integration

The Company recorded exit rate production in September 2023 of 806 MMcfepd (134.4 Mboepd) and delivered 3Q23 average net daily production of 804 MMcfepd (134.0 Mboepd). Adjusted for extraordinary midstream utility maintenance events that affected production in the Central Region, average net daily production of 814 MMcfepd (135.7 Mboepd) highlights Diversified’s peer-leading annual corporate decline profile of ~10%.

Margin and Total Cash Expenses per Unit

Adjusted EBITDA Margins(c) of 52% (36% unhedged) reflect Diversified’s ability to deliver consistent cash generation through the strategic execution of the Company’s differentiated hedging strategy and focus on the efficient operation of existing assets. During the quarter, Adjusted EBITDA margins benefited from diligent expense control measures in lease operating expenses, price-linked reductions in certain third-party gathering and transportation costs, while hedging provided consistent per-unit realizations compared to the prior quarter. 








Average Realised Price1

$      3.46

$    20.75

$     3.48

$ 20.90


Adjusted Operating Cost per Unit(b)








Lease Operating Expense2

$      0.62

$      3.72

$     0.66

$   3.97

(6) %

Midstream Expense





8 %

Gathering and Transportation





(10) %

Production Taxes





9 %

Total Operating Expense2

$      1.37

$      8.24

$     1.41

$   8.47

(3) %

Employees, Administrative Costs and Professional Fees(g)






Adjusted Operating Cost per Unit2

$      1.63

$      9.81

$     1.66

$   9.96

(2) %

Adjusted EBITDA Margin(c)



1 3Q23 excludes $0.15/Mcfe ($0.89/Boe) and 1H23 excludes $0.07/Mcfe ($0.45/Boe) of other revenues generated by Next LVL Energy; includes the impact of other revenue and gain on land sales during the respective periods

2 3Q23 excludes $0.08/Mcfe ($0.48/Boe) and 1H23 excludes $0.06/Mcfe ($0.38/Boe) of expenses attributable to Next LVL Energy

Values may not sum due to rounding 

Results of Hedging and Current Financial Derivatives Portfolio

Diversified’s use of hedges to leverage stable production for consistent cash generation is reflected in the Company’s 3Q23 average realised price of $3.46/Mcf, 35% higher than the average settled price for NYMEX Henry Hub during the quarter(h). Having proactively established its 2023 and a majority of its 2024 hedge portfolio, Diversified is focused on adding hedges to 2025 and beyond where forward natural gas prices remain strong.

Supplementary Presentation

Diversified has published a supplementary Corporate Presentation to accompany this announcement at


Shareholder Engagement

In accordance with the requirements of Provision 4 of the UK Corporate Governance Code, the Company provides this update following the significant votes against the below resolutions at the Company’s Annual General Meeting held on 2 May 2023.

All resolutions at the AGM were passed, although a supporting vote of 62% was received for Resolution 14, approving the Directors’ Remuneration Report. The UK Corporate Governance Code requires that companies provide an update to the market within six months of an AGM where more than 20% of shareholders have voted against a resolution.  This statement provides an update on the actions that the Company has taken. 

Following the AGM, the Company consulted and engaged with a number of shareholders who voted against the resolutions to better understand their concerns. The Directors are thankful to the shareholders for sharing their views. They understand that the negative vote was principally related to the specific, one-off issue of the grant price used for the 2020 LTIP awards and the resulting remuneration outcomes. The dialogue with the shareholders has highlighted that there remains strong support for the Company’s remuneration policy, which was approved by shareholders at the 2022 AGM.

The Company’s Remuneration Committee has discussed the feedback received in detail with the Board and will maintain dialogue with shareholders on matters related to executive remuneration.



As used herein, Adjusted EBITDA represents earnings before interest, taxes, depletion, depreciation and amortisation, and includes adjusting items that are not comparable period-over-period, non-cash items such as gains on the sale of assets, acquisition related expenses and integration costs, mark-to-market adjustments related to Diversified’s hedge portfolio, non-cash equity compensation charges and items of a similar nature


As used herein, includes operating expense; employees, administrative costs and professional services and recurring allowance for credit losses, which include fixed and variable cost components; for the purpose of comparability, amounts from Operating Expense relating to Diversified’s wholly-owned plugging subsidiary, Next Level Energy, have been excluded (3Q23: $0.08/Mcfe)


As used herein, Adjusted EBITDA Margin is measured as Adjusted EBITDA, as a percentage of Total Revenue, inclusive of settled hedges; Total Revenue, inclusive of settled hedges is calculated as Total Revenue and the applicable gain (loss) on settled derivative instruments during the period


As used herein, Annualized Free Cash Flow Yield represents Free Cash Flow for the nine months ended 30 September 2023 as a percentage of Diversified’s average total market capitalisation for the nine months ended 30 September 2023, annualized; Free Cash Flow is calculated as net cash provided by operating activities less expenditures on natural gas and oil properties and equipment and cash paid for interest; includes the impact of working capital changes


Calculated as Net Debt at 30 September 2023 divided by Pro Forma Adjusted EBITDA; Pro Forma Adjusted EBITDA as reported for the twelve months ended 30 September 2023, including the unrealised impact of estimated NTM Adjusted EBITDA for previously announced acquisitions and divestitures for the twelve months ended 30 September 2023


As previously announced via RNS, includes combined value of the sale of certain leaseholds, acreage positions and non-operated interests in producing properties during 1H 2023; Includes ~$16 million in asset sales that occurred in July 2023


As used herein, employees, administrative costs and professional services represents total administrative expenses excluding cost associated with acquisitions, other adjusting costs and non-cash expenses. We use Employees, administrative costs and professional services because this measure excludes items that affect the comparability of results or that are not indicative of trends in the ongoing business.


Source: Bloomberg; Calculated as the settled contract price for July 2023 – September 2023;

For Company-specific items, refer to the Glossary of Terms and/or Alternative Performance Measures found in the Company’s 2023 Interim Report

Dividend announcement

Diversified Energy Company PLC (LSE:DEC) is pleased to announce that the Board has declared an interim dividend of 4.375 cents per share in respect of 3Q23 for the three month period ended 30 September 2023.

Key dates related to this dividend include:

Ex-dividend Date:

29 February 2024

Record Date:

1 March 2024

Payment Date:

28 March 2024

Default Currency:

US Dollar

Currency Election Option:


Last Date for Currency Election:

8 March 2024


Diversified will pay the dividend in U.S. dollars while continuing to make available to shareholders a sterling election. For those shareholders who wish to receive their dividend payment in sterling, and who have not yet completed a currency election form, the Company has made available a dividend election form on its website at https://ir.div.energy/dividend-information. Shareholders who wish to receive sterling should submit the currency election form to Computershare Investor Services no later than 8 March 2024.

Diversified will announce the sterling value of the dividend payable per share approximately two weeks prior to the payment date.

Zephyr Energy

Zephyr has provided initial third quarter 2023 results related to hydrocarbon production and cashflows from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.


·    Q3 revenue was US$6.0 million compared to second quarter 2023 revenues of US$7.1 million (subject to audit). Q3 revenues reflect the standard decline rates expected from the portfolio.

·    Q3 sales volumes averaged 1,043 barrels of oil equivalent per day compared to Q2 sales volumes average of 1,385 boepd, in line with management expectations.  The average sale price per barrel of oil equivalent  was US$64.35 per boe in Q3 compared to US$56.64 per boe in Q2 (not including realised hedging impacts).

·    Q3 operating income was US$4.3 million (after taxes, lease operating expenses, realised hedging impacts, and gathering and marketing fees), compared to Q2 operating income of US$4.2 million. 

·    At 30 September 2023, 220 wells in Zephyr’s portfolio were available for production (versus 223 wells at 30 June 2023).

o Net working-interests across the Zephyr portfolio now average 7% per well, equivalent to 14.7 gross wells in total.

·    As announced on 1 November 2023, production has commenced from the pad site for six wells in which Zephyr acquired a working-interest, and which are operated by Slawson Exploration Company.  These wells are expected to lead to a material increase in production rates during the fourth quarter of 2023 and beyond, and Zephyr intends to update the market on flow rates after the first thirty days of stabilised production.

Colin Harrington, Chief Executive of Zephyr, said:

“Our non-operated assets continue to deliver strong and robust cash flows, allowing Zephyr to continue to fund investment and growth across both our operated and non-operated portfolios. 

“Furthermore, I’m pleased that this year’s investment in the Slawson wells is expected to materially boost production rates in the current quarter, and the resulting cashflows will be utilised to deliver additional growth as we intensify our operational activity.”    

As predicted recently Zephyr has updated the market, since its most recent update the six Slawson wells producing and which are to get materially better during this quarter and ‘beyond’. With an exciting period of exploration and development expected in the Paradox Basin to come as we go into the new year prospects at Zephyr are extremely good. 


Q3 Sales Detail

Zephyr’s net sales for Q3 were approximately 93,186 boe.

Q3 sales product mix was 91% crude oil, 3% natural gas, and 6% natural gas liquids. The table below provides sales volumes, product mix, and average sales prices for the quarter:

Oil:                                   66,889 bbls at an average sales price of US$84.69/bbl*

Natural Gas:                     91,778 thousand cubic feet (“mcf”) at an average sales price

of US$2.08 /mcf

Natural Gas Liquids:        13,682 bbls at an average sales price of US$26.93 per bbl

 *not including hedges

(Note: Q3 volumes and average sales prices figures include field estimates in respect of September 2023 natural gas and natural gas liquids sales volumes and are subject to future revision.)

In the Williston Basin, cashflow from non-operated interests in newly drilled wells may lag actual production by up to five months.  Such payments from the operator accrue on a monthly basis and are paid in full prior to the sixth month of production, which may result in impacts to quarterly sales volumes and revenues during times of significant completion activity. Zephyr expects additional accrued payments from operators during the remainder of 2023 and into 2024 given the Company’s interests in the six Slawson operated wells (which came online in November of 2023), and the ten Harms East Federal / Quale Federal wells which are expected to come online in December 2023 or January 2024.

The Company has hedged 67,000 barrels of oil over the next six months at a weighted-average price of US$82.93 per barrel.  The Company will continue to evaluate its commodity price risk management strategy on a regular basis.

Eco (Atlantic) Oil & Gas

Eco (Atlantic) has announced Government approval of the transfer of 60% Working Interest and Operatorship in the offshore Orinduik Block in Guyana from the Minister of Natural Resources, Cooperative Republic of Guyana. 

On 10 August 2023, the Company announced the signing of a Sale Purchase Agreement pursuant to which its wholly owned subsidiary, Eco Guyana Oil and Gas (Barbados) Limited (“Eco Guyana”), will acquire a 60% Operated Interest in Orinduik Block, offshore Guyana, through the acquisition of Tullow Guyana B.V. (“TGBV”), a wholly owned subsidiary of Tullow Oil Plc. (“Tullow”) in exchange for a combination of upfront US$700,000 cash and contingent consideration.  The Company is pleased to announce that it has now received approval from Minister of Natural Resources and the Government of Guyana for the transfer of the one hundred percent (100%) shareholding interest in TGBV to Eco Guyana.   

On completion of the transaction, Eco will become the Operator and hold an aggregate 75% Participating Interest in the Orinduik Block, via subsidiary Eco Orinduik B.V. following a scheduled name change (“Eco Orinduik”), which will hold a 60% Operated Interest, and Eco (Atlantic) Guyana Inc. which holds a 15% Participating Interest. TOQAP Guyana B.V will continue to hold a Participating Interest of 25%. Completion of the transaction is expected before year-end 2023. 


Colin Kinley, Co-founder and Chief Operating Officer of Eco Atlantic, commented: 

“We are very happy to have support from the Minister of Natural Resources and the Government of Guyana and their approval to transfer 60% of the Working Interest and Operatorship of the Orinduik Block to Eco.  We have always been very involved with the exploration and interpretation of the Block, and our experienced team will step directly into Operatorship to finalize target selection.

“After nearly 10 years of exploration and interpretation, and multiple regional discoveries at the Cretaceous level of close to 11 Billion Barrels of recoverable oil, our team has a good understanding of the Cretaceous play and we have a great deal of confidence in drilling our first well, targeting a   stacked pay target in this well proven horizon.  This Transaction structure allows Tullow to continue to share upside in a discovery.

“Eco now seeks qualified partners in this high-value play and has commenced a formal farm-out process for the Block. Recent interest from supermajors and other well capitalized energy companies in the latest licencing bid round in Guyana, for blocks up dip of us, supports our thesis of the oil migration and the high quality and charged reservoirs we see on our Block.”

Nothing much to add here, the transaction was announced some time ago and now Eco have the Government approval and so they own 75% and operatorship of the block. With the farm-out process underway at long last the company can get after an asset they have always wanted to drill if they hadn’t been held up by the previous owner…

And finally…

In the CWC first semi final India scored 397-4 and the Black Caps are 137-2 in reply after 22 overs

And in the FA Cup tonight a memorable fixture, Cray Valley Paper Mills host the Addicks after a 1-1 draw in the first game.