REG-Diversified to Acquire Complementary, High-Quality, Low-Decline Producing Assets

Diversified Energy CoAnnouncement

26/02/2026 21:15

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Accretive Acquisition of Contiguous Operating Position

BIRMINGHAM, Ala., Feb. 26, 2026 (GLOBE NEWSWIRE) -- 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
Commenting on the Acquisition, CEO Rusty Hutson, Jr. said:

"The target assets are a perfect fit with our existing East Texas operations
and offer meaningful opportunities for material synergies upon completion of
the Acquisition. The accretive transaction adds scale to our East Texas
regional footprint and remains consistent with our strategy to focus on
acquiring high-quality, low-decline producing assets at attractive valuations.
These assets will benefit from our Smarter Asset Management approach to
improve production, enhance margins, and grow free cash flow. Additionally, we
anticipate that incremental cash flow can be generated from our Portfolio
Optimization Programs. Our Company has a proven, demonstrated track record of
delivering value to shareholders from our strategy of acquiring, operating,
and optimizing established cash-generating energy assets."

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.

Footnotes:

(a) )Current production based on estimated average daily production for 2026;
Estimate based on historical performance and engineered type curves for the
Assets.

(b) )Estimated annual rate of production declines and PDP reserves values
(including volumes, PV-10 and approximate PV value) calculated using
historical production data, asset-specific type curves and an effective date
of March 1, 2026 and based on the NYMEX strip at February 2, 2026, with
terminal price assumptions of $3.75/MMBtu and $65.00/Bbl for natural gas and
oil, respectively.

(c) )Based on engineering reserves assumptions using historical cost
assumptions and NYMEX strip as of February 2, 2026 for the 12 month period
ended March 1, 2027; does not include the impact of any projected or
anticipated synergies that may occur subsequent to acquisition.

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No. 596/2014 on Market Abuse (“UK
MAR”), as it forms part of the UK domestic law by virtue of the European
Union (Withdrawal) Act 2018.

For further information, please contact:

 Diversified Energy Company                                           +1 973 856 2757        
 Doug Kris                                                            dkris@dgoc.com         
 Senior Vice President Investor Relations & Corporate Communications  www.div.energy         
 FTI Consulting                                                       dec@fticonsulting.com  
 U.S. & UK Financial Public Relations                                                        
                                                                                             

About Diversified Energy Company

Diversified is a leading publicly traded energy company focused on acquiring,
operating, and optimizing cash-generating energy assets. Through our unique
differentiated strategy, we acquire established assets and invest in them to
improve environmental and operational performance until retiring those assets
in a safe and environmentally secure manner. Recognized by ratings agencies
and organizations for our sustainability leadership, this solutions-oriented,
stewardship approach makes Diversified the Right Company at the Right Time to
responsibly produce energy, deliver reliable free cash flow, and generate
shareholder value. 

Forward-Looking Statements

This announcement contains forward-looking statements (within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995). These
forward-looking statements, which contain the words "anticipate", "believe",
"intend", "estimate", "expect", "may", "will", "seek", "continue", "aim",
"target", "projected", "plan", "goal", "achieve", "opportunity" and words of
similar meaning, reflect the Company's beliefs and expectations and are based
on numerous assumptions regarding the Company's present and future business
strategies and the environment the Company will operate in and are subject to
risks and uncertainties that may cause actual results to differ materially. No
representation is made that any of these statements or forecasts will come to
pass or that any forecast results will be achieved. Expected benefits of the
Acquisition may not be realized and the Acquisition may not close on the terms
described in this release at all. Forward-looking statements involve inherent
known and unknown risks, uncertainties and contingencies because they relate
to events and depend on circumstances that may or may not occur in the future
and may cause the actual results, performance or achievements of the Company
to be materially different from those expressed or implied by such
forward-looking statements. Many of these risks and uncertainties relate to
factors that are beyond the Company's ability to control or estimate
precisely, including the risk factors described in the "Risk Factors" section
in the Company's Annual Report and Form 10K for the year ended December 31,
2025, filed with the United States Securities and Exchange Commission. The pro
forma financial information in this announcement is for informational purposes
only, is not a projection of our future financial performance, and should not
be considered indicative of actual results should the Acquisition be
consummated. Forward-looking statements speak only as of their date and
neither the Company nor any of its directors, officers, employees, agents,
affiliates or advisers expressly disclaim any obligation to supplement, amend,
update or revise any of the forward-looking statements made herein, except
where it would be required to do so under applicable law. As a result, you are
cautioned not to place undue reliance on such forward-looking statements.

USE OF PROJECTIONS

This communication contains projections, including expected production
volumes, PV-10, EBITDA and decline rates. Our independent auditors have not
audited, reviewed, compiled, or performed any procedures with respect to the
projections for the purpose of their inclusion in this communication, and
accordingly, have not expressed an opinion or provided any other form of
assurance with respect thereto for the purpose of this communication. These
projections are for illustrative purposes only and should not be relied upon
as being indicative of future results. The assumptions and estimates
underlying the projected information are inherently uncertain and are subject
to a wide variety of significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially from those
contained in the projected information. Even if our assumptions and estimates
are correct, projections are inherently uncertain due to a number of factors
outside our control. Accordingly, there can be no assurance that the projected
results are indicative of our future performance after completion of the
Acquisition or that actual results will not differ materially from those
presented in the projected information. Inclusion of the projected information
in this communication should not be regarded as a representation by any person
that the results contained in the projected information will be achieved.

Adjusted EBITDA

As used herein, EBITDA represents earnings before interest, taxes, depletion,
depreciation and amortization. Adjusted EBITDA includes adjusting for items
that are not comparable period-over-period, namely, accretion of asset
retirement obligation, other (income) expense, loss on joint and working
interest owners receivable, (gain) loss on bargain purchases, (gain) loss on
fair value adjustments of unsettled financial instruments, (gain) loss on
natural gas and oil property and equipment, costs associated with
acquisitions, other adjusting costs, non-cash equity compensation, (gain) loss
on foreign currency hedge, net (gain) loss on interest rate swaps and items of
a similar nature.

Adjusted EBITDA should not be considered in isolation or as a substitute for
operating profit or loss, net income or loss, or cash flows provided by
operating, investing, and financing activities. However, we believe such a
measure is useful to an investor in evaluating our financial performance
because it (1) is widely used by investors in the natural gas and oil industry
as an indicator of underlying business performance; (2) helps investors to
more meaningfully evaluate and compare the results of our operations from
period to period by removing the often-volatile revenue impact of changes in
the fair value of derivative instruments prior to settlement; (3) is used in
the calculation of a key metric in one of our Credit Facility financial
covenants; and (4) is used by us as a performance measure in determining
executive compensation. We are unable to provide a quantitative reconciliation
of forward-looking Adjusted EBITDA to the most directly comparable
forward-looking GAAP measure because the items necessary to estimate such
forward-looking IFRS measure are not accessible or estimable at this time
without unreasonable efforts. The reconciling items in future periods could be
significant.

PV-10

PV-10 is a non-GAAP financial measure and generally differs from Standardized
Measure, the most directly comparable GAAP measure, because it does not
include the effects of income taxes on future net cash flows. While the
Standardized Measure is free cash dependent on the unique tax situation of
each company, PV-10 is based on a pricing methodology and discount factors
that are consistent for all companies. In this announcement, PV-10 is
calculated using NYMEX pricing. It is not practicable to reconcile PV-10 using
NYMEX pricing to standardized measure in accordance with GAAP at this time.
Investors should be cautioned that neither PV-10 nor the Standardized Measure
represents an estimate of the fair market value of proved reserves