Diversified Energy Executes Purchase And Sale Agreement For Acquisition Of Natural Gas Properties And Related Facilities In East Texas From Sheridan Production For $245M In Cash

Diversified Energy Company (NYSE:DEC, LSE: DEC))) ("Diversified" or the "Company") is pleased to announce the execution of a purchase and sale agreement for the acquisition of high-working interest, natural gas properties and related facilities located in east Texas (the "Assets") from Sheridan Production (the "Seller") (the "Acquisition").

The Acquisition is expected to be funded through existing liquidity from Diversified's senior secured bank facility. The Company expects to close the Acquisition in the second quarter of 2026, subject to customary closing conditions.

Acquisition Highlights

• Purchase price of $245 million in cash before anticipated, customary purchase price adjustments
• Net purchase price represents estimated ~PV-15 valuation
• 2026 estimated net production of ~62 MMcfepd (~10 Mboepd)(a) with low annual declines of ~6%(b)
  • Complements Diversified's industry-leading corporate declines and low capital intensity
  • Gas-weighted production with ~72% gas volumes
• Estimated NTM EBITDA of ~$52 million(c) 
  • PDP Reserves of ~397 Bcfe with estimated PV-10 of $310 million(b)
• Assets are contiguous with Diversified's existing East Texas assets
  • Proximity to existing assets creates immediate line of sight to future operating efficiencies
  • Includes ~75,000 acres of commercially attractive leasehold in East Texas

Bolt-On Addition of Low-Decline PDP Assets

The Acquisition's estimated NTM EBITDA is approximately $52 million and reflects attractive valuation of approximately PV-15. The Acquisition is expected to add approximately 62 MMcfepd (~10 Mboepd) of production and approximately 397 Bcfe reserves with a PV-10 of $310 million(b). Additionally, the production profile of the Assets are highly complementary to the Company's existing portfolio and operational strategy, with low annual production declines of ~6% per year that would result in an unchanged consolidated decline rate, pro forma for the Acquisition. The Assets include additional undeveloped acreage that presents potential upside opportunities in line with Diversified's demonstrated ability to unlock value on non-core assets and the Assets provide opportunities to realize synergies attributable to Diversified's operating scale and asset density.