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Diversified Energy Co PLC on Tuesday posted a widened loss for 2021 as a result of a sharp loss on derivative financial instruments, despite revenue having doubled as production and sales prices increased.
The Birmingham, Alabama-based oil & gas producer reported a pretax loss of $550.9 million, widened from $136.7 million in 2020. This was mostly due to a $974.9 million loss on derivative financial instruments, reflecting higher gas prices on the forward price curve causing mark-to-market losses.
Hedged adjusted earnings before interest, tax, depreciation and amortisation increased 14% in 2021 to $343.1 million from $300.6 million the year before, on revenue which more than doubled to $1.01 billion from $408.7 million.
Revenue growth was due to higher production and a more than doubled sales price. For 2021, average production increased 19% to 118,512 barrels of oil equivalent per day, while the average realised sales price increased to $22.50 per barrel from $10.45.
On an adjusted basis, when including the effect of derivatives settled in cash, revenue rose 24% to $686.9 million from $553.3 million.
Diversified declared a final dividend of 4.25 US cents per share, bringing the total payout to 16.5 cents, up 7.8% from 15.3 cents in 2020.
‘I'm pleased to report another year of consistent operational excellence amplified by the strategic expansion of our low-risk, long-life, low-decline asset acquisition model into the Central Region through four accretive, complementary acquisitions and an acquisition of an established Appalachian well plugging company that significantly increases our well retirement capacities. These transactions enhanced our scale, enlarged our portfolio of Smarter Asset Management opportunities and created strategic optionality across our expanded operations,’ said Chief Executive Officer Rusty Hutson.
Shares in Diversified Energy were up 1.0% at 116.20 pence each on Tuesday morning in London.
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