Diversified Energy Company announced it had signed a deal to supply 40 billion cubic feet (Bcf) of natural gas over three years to a “major Gulf Coast LNG facility” for exporting. The contract begins in November (next month!), which means even though Diversified isn’t (yet) willing to identify the LNG export facility, it will sell to a facility already up and running and not fully supplied, limiting the pool of potentials to a handful.
Tthe Company has been able to strategically take advantage of the recent strength of the natural gas price curve to add to its multiple-year hedge portfolio in 2025 through 2027, with an average NYMEX hedge price of approximately $3.45 per MMBtu. The Company will provide additional disclosures and an updated hedging schedule with its Third Quarter 2024 Trading Statement.
Commenting on the Agreement & Hedging Program, Diversified Energy CEO Rusty Hutson, Jr. said:
“This supply agreement to a Gulf Coast LNG export facility is a great example of the market’s recognition of Diversified’s reliable natural gas production and operational efficiency while providing another lever for the Company to enhance margins and deliver consistent cash flows. In line with the Company’s strategy to reduce commodity price risk, we believe this agreement, along with tactically adding to our 2025-2027 hedge position during the recent natural gas price strength, will help us to provide consistent, robust cash margins. The agreement not only reflects the critical need and strong global demand for natural gas but also the importance natural gas plays in powering global economies for decades to come. We look forward to advancing our relationships with Gulf Coast LNG export facilities that shares our commitment to building a future of energy abundance, affordability, and security.”
Diversified Energy Company plc (LON:DEC) is an independent energy company engaged in the production, marketing, transportation and retirement of primarily natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets.
