20-F: Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)
Published on March 19, 2024
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
OR
For the fiscal year ended December 31 , 2023
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission file number: 001-41870
(Exact name of Registrant as specified in its charter) |
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Not Applicable |
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(Translation of Registrant’s name into English) |
(Jurisdiction of incorporation or organization) |
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Diversified Energy Company PLC
Tel: +1
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(Address of principal executive offices) |
(Name, Telephone, E-mail and/or Facsimile
number and Address of Company Contact
Person)
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Securities registered or to be registered, pursuant to Section 12(b) of the Act
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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London Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report: N/A
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes ¨ No þ
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations
under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large
accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
¨ Large accelerated filer
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¨ Accelerated filer
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þ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ¨
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
¨ U.S. GAAP
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þ |
¨ Other
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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨
2023
Annual Report
& FORM 20-F
Our Core Values
We CARE for each other, our communities, our industry
and our country!
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COMMITMENT
—Seek opportunities for continuous learning
and improvement.
—Serve and support our teams and communities with
passion and enthusiasm.
ACCOUNTABILITY
—Act with personal and business integrity.
RESPECT
—Value the dignity and worth of all individuals.
—Respect environmental stewardship as we make
business decisions.
EXCELLENCE
—Commit to excellence in our performance.
—Exhibit courage of convictions, challenge the status quo
and strive to create value.
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Report of Independent Registered Public Accounting
Firm
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Additional Information (Unaudited)
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We have prepared our financial statements and the notes thereto in accordance with IFRS as issued by the International Accounting Standards Board.
To provide metrics that we believe enhance the comparability of our results to similar companies, throughout this Annual Report & Form 20-F, we refer
to Alternative Performance Measures (“APMs”). APMs are intended to be used in addition to, and not as an alternative for the financial information
contained within the Group Financial Statements, nor as a substitute for IFRS. Within the APMs section located in the Additional Information section
within this Annual Report & Form 20-F, we define, provide calculations and reconcile each APM to its nearest IFRS measure. These APMs include
“adjusted EBITDA,” “net debt,” “net debt-to-adjusted EBITDA,” “total revenue, inclusive of settled hedges,” “adjusted EBITDA margin,” “free cash flow,”
“adjusted operating cost per Mcfe,” “employees, administrative costs and professional services,” and “PV-10.”
Diversified Energy Company PLC (the “Parent” or “Company”) and its
wholly owned subsidiaries (the “Group,” “DEC,” or “Diversified”) is an
independent energy company engaged in the production,
transportation and marketing of primarily natural gas.
Our proven business model creates sustainable value in today's natural gas market by investing in
producing assets, reducing emissions and improving asset integrity while generating significant, hedge-
protected cash flows. We Acquire, Optimize, Produce and Transport natural gas, natural gas liquids and oil
from existing wells then Retire our wells at the end of their life to optimally steward the resource already
developed by others within our industry, reducing the environmental footprint, while sustaining important
jobs and tax revenues for many local communities. While most companies in our sector are built to explore
and develop new reserves, we fully exploit existing reserves through our focus on safely and efficiently
operating existing wells to maximize their productive lives and economic capabilities, which in turn
reduces the industry’s footprint on our planet.
Key Achievements
Accretive Growth
Investment in the Tanos II
Central Region acquisition
totaled $262 million and
bolstered average daily
production by 8%.
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Asset Monetization
Unlocked value on non-core
assets through the sale of
undeveloped acreage and
non-operated well interests
for total consideration of
$66 million.
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U.S. Listing
Commenced trading on the
New York Stock Exchange
under the “DEC” ticker in
December 2023, expanding
access to U.S. investors and
improving trading liquidity.
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Prioritizing Sustainability
Realized 33% year-over-year
reduction in Scope 1
methane intensity, achieving
our 2030 goal of cumulative
50% reduction in Scope 1
methane intensity (from
2020 baseline) and driven
largely by our focused and
continual emissions
detection, measurement and
mitigation programs in both
our Appalachia and Central
regions.
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Financing
Executed the sale of certain
producing assets in
Appalachia to a special
purpose vehicle “SPV”,
generating proceeds of
approximately $192 million
through placement of an
asset-backed securitization at
the SPV, including the sale of
an 80% equity interest in the
SPV for $30 million.
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Delivering Shareholder Value
Share buybacks and
distributed dividends
represent $179 million in
return of capital to
shareholders.
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Cross Reference to Form 20-F
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Part I |
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Item 1. |
Identity of Directors, Senior Management and Advisers |
N/A |
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Item 2. |
Offer Statistics and Expected Timetable |
N/A |
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Item 3. |
Key Information |
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A. |
[Reserved] |
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B. |
Capitalization and indebtedness |
N/A |
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C. |
Reasons for the offer and use of proceeds |
N/A |
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D. |
Risk factors |
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Item 4. |
Information on the Group |
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A. |
History and development of the Group |
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B. |
Business overview |
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C. |
Organizational structure |
181, Exhibit 8.1
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D. |
Property, plants and equipment |
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Item 4A. |
Unresolved Staff Comments |
N/A |
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Item 5. |
Operating and Financial Review and Prospects |
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A. |
Operating results |
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B. |
Liquidity and capital resources |
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C. |
Research and development, patents and licenses, etc. |
N/A |
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D. |
Trend information |
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E. |
Critical accounting estimates |
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Item 6. |
Directors, Senior Management and Employees |
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A. |
Directors and senior management |
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B. |
Compensation |
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C. |
Board practices |
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D. |
Employees |
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E. |
Share ownership |
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F. |
Disclosure of a registrant’s action to recover erroneously awarded
compensation
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N/A |
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Item 7. |
Major Shareholders and Related Party Transactions |
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A. |
Major shareholders |
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B. |
Related party transactions |
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C. |
Interests of experts and counsel |
N/A |
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Item 8. |
Financial Information |
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A. |
Consolidated Statements and Other Financial Information |
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B. |
Significant Changes |
N/A |
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Item 9. |
The Offer and Listing |
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A. |
Offer and listing details |
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B. |
Plan of distribution |
N/A |
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C. |
Markets |
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D. |
Selling shareholders |
N/A |
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E. |
Dilution |
N/A |
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F. |
Expenses of the issue |
N/A |
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Pages |
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Item 10. |
Additional Information |
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A. |
Share capital |
N/A |
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B. |
Memorandum and articles of association |
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C. |
Material contracts |
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D. |
Exchange controls |
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E. |
Taxation |
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F. |
Dividends and paying agents |
N/A |
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G. |
Statement by experts |
N/A |
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H. |
Documents on display |
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I. |
Subsidiary information |
N/A |
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J. |
Annual report to security holders |
N/A |
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Item 11. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 12. |
Description of Securities Other than Equity Securities |
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A. |
Debt securities |
N/A |
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B. |
Warrants and rights |
N/A |
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C. |
Other securities |
N/A |
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D. |
American depositary shares |
N/A |
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Part II |
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Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
N/A |
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Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
N/A |
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Item 15. |
Controls and Procedures |
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Item 16. |
[Reserved] |
N/A |
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Item 16A. |
Audit Committee Financial Expert |
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Item 16B. |
Code of Ethics |
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Item 16C. |
Principal Accountant Fees and Services |
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Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
N/A |
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Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
N/A |
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Item 16F. |
Change in Registrant’s Certifying Accountant |
N/A |
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Item 16G. |
Corporate Governance |
N/A |
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Item 16H. |
Mine Safety Disclosure |
N/A |
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Item 16I. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
N/A |
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Item 16J. |
Insider Trading Policies |
N/A |
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Item 16K. |
Cybersecurity |
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Part III |
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Item 17. |
Financial Statements |
N/A |
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Item 18. |
Financial Statements |
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Item 19. |
Exhibits |
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DEC at a Glance
Our Assets
Our assets primarily consist of long-life, low-decline natural gas wells and gathering systems located within the Appalachian
Basin and Central Region of the U.S., providing opportunistic synergies in our operations. Our headquarters are located in
Birmingham, Alabama with operational and field offices located throughout the states in which we operate.
KEY
l Upstream assets
l Midstream assets
l States in which we operate
APPALACHIA ASSETS
CENTRAL ASSETS
Key Facts
PRODUCTION MIX
86%
natural gas
12%
NGLs
2%
oil
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PRODUCTION
256,378
natural gas (MMcf)
5,832
NGLs (MBbls)
1,377
oil (MBbls)
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PV-10 VALUE OF RESERVES
$2.1
billion(a)
3,849,946
MMcfe
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MIDSTREAM SYSTEM
~17,700
miles
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SCOPE 1 METHANE
EMISSIONS INTENSITY
0.8
MT CO2e/MMcfe
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NO LEAK RATE ON
SURVEYED WELLS
~98%
Group-wide
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AERIALLY SURVEYED
MIDSTREAM MILES
~10,000
miles
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REPORTABLE SPILL
INTENSITY
0.08
oil & water per MBbl
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NET
INCOME
$760
million
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TOTAL
REVENUE
$868
million
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ADJUSTED EBITDA
MARGIN(b)
52%
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ADJUSTED
EBITDA(b)
$543
million
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(a)Based on SEC pricing.
(b)Please refer to the APMs section in Additional Information within this Annual Report & Form 20-F for information on how these metrics
are calculated and reconciled to IFRS measures.
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Strategic
Report
Chairman’s Statement
On behalf of the Board of Directors, I am
pleased to share our financial and operational
results that reflect the hard work, dedication,
and focus of the entire Diversified team. Their
consistent execution of our strategy and
management initiatives has driven another year
of strong environmental, financial, and
operational performance.
Throughout 2023, we continued to focus on
cash flow generation, capital discipline, and
balance sheet management. This, together with
our resilient business model, means we have
been able to deliver strong results which have
benefited all stakeholders.
In addition, we are proud of the part we are
playing in responsibly providing the energy
needed for our communities and country, as
well as meeting growing demand beyond
the U.S.
Since 2017, Diversified’s demonstrated track
record has delivered more than $800 million in
returns to the Group’s stockholders including
approximately $700 million in cash dividends
paid and declared, along with approximately
$110 million in share repurchases.
The Board’s dedication to shareholder returns
remains an absolute priority. We continuously
refine the capital allocation framework in order
to balance debt reduction, sustainable fixed
dividends, strategic share repurchases and
accretive acquisitions. We are proposing a final
fourth quarter 2023 dividend of $0.29 which
allows us to focus our cash flows on what we
believe are the highest and best uses of capital.
We are confident that this new level will be
sustainable, and will also allow for continued
debt reduction, more flexibility for alternative
capital returns, and for funding future growth.
We believe that our share price has been
significantly undervalued for some while and
has been affected by the structural de-
equitization of the UK share market. We have,
therefore, also authorized a share buyback
program, which we believe will be an effective
use of our capital and will further increase total
shareholder returns.
Part of our business model and strategy
revolves around the continued addition of
growth opportunities. We identified a listing on
the New York Stock Exchange, in addition to
the London listing, as an opportunity that could
help to add significant value and were pleased
to deliver on that key milestone this year. We
view the NYSE listing as a great opportunity to
expand access to U.S. investors and improve
trading liquidity. We continue to evaluate
opportunities to grow and to increasingly
make Diversified the “Right Company at the
Right Time.”
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Another important part of our focused strategy
is to create value through sustainability and
stewardship. Over the past year, we have made
significant progress with our methane emissions
program, reducing emissions by over 33% from
2022 and achieving our 2030 goal meaningfully
ahead of schedule. We are proud that we
received recognition from the United Nations’
Oil & Gas Methane Partnership 2.0 (OGMP),
being awarded the Gold rating for the second
year. Our initiatives related to methane emission
reductions are of paramount importance, and it
gives us great confidence to see this recognized
by international bodies.
Operationally, we conducted over 246,000 leak
detection surveys using industry-leading and
proven detection equipment, and attaining a
zero emissions rate of approximately 98%,
proving the positive impact of our actions to
eliminate methane leaks. Next LVL Energy, our
asset retirement business, has continued to
grow and contribute significantly to safe and
efficient well retirements, retiring a total of 404
wells. This achievement included retiring a total
of 222 Diversified wells in 2023, significantly
exceeding state agreements. Additionally, our
partnership with states on their orphan well
programs resulted in 148 retired wells. We are
immensely proud of the material investments
we have made to lower our methane intensity,
and to safely retire wells, and we remain
focused on delivering continuous improvement.
The Board and its Committees continue to
operate effectively and are active in both
supporting and challenging strategic
discussions. There is an exceptional depth of
knowledge and diversity of thinking. We again
conducted a Board Performance Review during
2023 and will continue to ensure that we
comply with all governance guidelines.
As we look ahead to 2024 and beyond, I would
like to recognize the quality of the team we
have at Diversified, across the entire Group. I am
very grateful for their work and look forward to
future successes as a company in the years to
come. In particular, I would like to thank the
Executive Team, led by Rusty Hutson, Jr., who
navigated the team through a year that has
seen its share of broader challenges, notably an
unfavorable commodity price environment. I
also wish to express gratitude to our
shareholders, lenders, and other stakeholders
for their trust in our commitment to deliver
long-term sustainable value and their support
whilst we provide essential energy security and
continue to care for our communities.
David E. Johnson
Chairman of the Board
March 19, 2024
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“
Together with our
resilient business
model, we have been
able to deliver strong
results which have
benefited all
stakeholders.
Chief Executive’s Statement
The fundamental need for natural gas is well-
cemented in our domestic and global energy
outlooks. Natural gas is the essential fuel to
tackling global challenges – from enhancing energy
security of the United States and allies around the
world to addressing the universally shared need for
reliable, affordable, and sustainable power, natural
gas demand remains strong.
It’s against this backdrop of rising global energy
demand, consolidation in the U.S. energy markets,
and enhanced expectations for sustainably
produced energy that the case for Diversified’s
stewardship business model sharpens. Thanks to
our approach – focused on acquiring, improving,
and retiring existing, long-life U.S. energy assets
and honed through two decades of field
experience – Diversified is the “Right Company at
the Right Time” to responsibly manage existing
domestic natural gas and oil production in a
manner that’s consistent with environmental
stewardship and a lower-carbon energy future.
We continue to aggressively pursue this mission
each and every day, and 2023 was no different.
From closing the Tanos II acquisition – which
increased our footprint in the Central Region and
aligned with our stewardship and sustainability
commitments – to ending the year with dual-listing
on the New York Stock Exchange, 2023 was a year
focused on execution against our core business
objectives.
Through our focused commitment to responsible
asset management, we continue to drive methane
intensities downward, while returning wells to
production and gaining operational efficiencies.
Compared to a 2020 baseline, upstream methane
intensity has fallen over 50%, achieving our 2030
goal meaningfully ahead of schedule, and we are
continuing to take aggressive steps to optimize
environmental performance across our operating
areas. By viewing asset retirement as a business
opportunity, Diversified’s Next LVL Energy
subsidiary is the largest well retirement company in
Appalachia. Our focus on asset retirement stands
out, with our dedicated teams responsibly retiring
404 wells in 2023 alone, as no other company is
addressing state orphaned and end-of-life wells
head-on like we are.
This focus on sustainability principles has been
validated on the domestic and global stage, with
sustained Gold standard designations from the
United Nation’s Oil and Gas Methane Partnership
2.0 (second year), attainment of the second-
highest MSCI ESG “AA” rating, and multiple
sustainability awards, to name a few. Last year’s
sustainability report detailing our proactive
approach took home the ESG Report of the Year
by the international ESG Awards 2023 for speaking
to “both head and heart,” while also receiving the
top category nomination from IR Magazine. I am
proud to see the hard work of our employees
recognized as industry leaders time and again.
We also continue to expand Diversified’s
community-giving culture in the communities
where we live and work, and we’re privileged to
strengthen our corporate commitments to
employees. We fully recognize none of this
progress would be possible without our 1,600+
diligent team who work every day to ensure
families across the United States have safe, clean,
and reliable energy resources.
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In the year ahead, we are taking a renewed focus
on the values on which Diversified was founded:
investing in strategic, aligned acquisitions that
scale our model and deliver greater operational
efficiencies, taking proactive steps to ensure the
sustainability of assets, keeping costs low and de-
leveraging the balance sheet – all while returning
value to shareholders.
Diversified has set in motion its “Focus Five” in
order to demonstrate meaningful expansion of
free cash flow generation while growing the
company in a disciplined manner. That plan
consists of the following core objectives:
—Optimized cash flow generation
—Cost structure optimization
—Financial and operational flexibility
—Sustainability innovation
—Scale through accretive growth
I believe these principles will help differentiate the
Company among its peers in unlocking corporate
value throughout 2024 and into the future.
The Company has undertaken a reassessment of
its capital allocation strategy to weigh the
intrinsic value of the current share price level
against the historical practice of returning capital
through dividends. The Board and executive
management team have jointly evaluated a
number of potential scenarios to align the
dividend level with expected future capital
allocation needs, peer trends, current commodity
prices and current equity market dynamics.
The result of this assessment is the Board’s
realignment of capital allocation and is designed
to best position the Company to create long-term
shareholder value through the proper
combination of:
—Systematic debt reduction
—Fixed per-share dividend
—Strategic share repurchases
—Accretive strategic acquisitions
We are proud to be part of the solution to the
broader challenge of existing energy
infrastructure and to do our part in driving our
country’s energy, climate, and economic security
– and we couldn’t do it without our OneDEC team.
 Robert R. (“Rusty”) Hutson, Jr.
Chief Executive Officer
March 19, 2024
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Diversified is the Right
Company at the Right
Time to responsibly
manage existing
domestic natural gas
and oil production in a
manner that’s
consistent with
environmental
stewardship and a
lower-carbon energy
future.
“
A Differentiated Business Model
1 |
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ACQUIRE |
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We maintain a disciplined approach to evaluating
opportunities to ensure that we only pursue those
that possess a consistent asset profile. We target
existing long-life, stable assets with synergistic
opportunities that produce predictable and stable
cash flows, are value accretive, margin enhancing
and strategically complementary.
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2 |
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OPTIMIZE |
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The primarily mature nature of the assets we
acquire provides us with a portfolio of low-cost
optimization opportunities. These optimization
activities, applied through our internally
developed SAM program, are strategically
important as they aid in offsetting natural
production declines, creating expense efficiency
and reducing our emissions.
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3 |
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PRODUCE |
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Our culture makes the difference as our team of
industry veterans strive to efficiently produce as
many units as possible in a safe and
environmentally responsible manner, aligning both
environmental and financial best interests.
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4 |
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TRANSPORT |
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We seek to acquire midstream systems into which
we are a large producer and more fully integrate
those assets into our upstream portfolio to provide
immediate and long-term synergies.
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5 |
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RETIRE |
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We embrace our commitment to be a responsible
operator of existing assets. With safety and
environmental stewardship as top priorities, we
design our asset retirement program to
permanently retire wells that have reached the end
of their producing lives. During 2022, we made
investments that allowed us to meaningfully
expand our asset retirement capabilities through a
series of acquisitions that we believe have provided
us with the operational capacity to be a leader in
asset retirement.
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DAILY OPERATING PRIORITIES
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Safety |
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No compromises. Ensuring the care and well-being of
our employees, our families, our partners and
communities is our top priority.
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Production |
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Every unit counts. Ensuring that every unit we
safely produce provides affordable and reliable
energy to our communities and generates value for
our shareholders.
|
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Efficiency |
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Every dollar counts. Ensuring every dollar we spend
protects our employees and communities and grows
the investment of our shareholders.
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Enjoyment |
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Have fun delivering great results. Ensuring our
company is an attractive place to work,
encouraging innovation and celebrating our
employees’ accomplishments.
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STRATEGY |
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Acquire long-life stable assets
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Operate our assets in a safe, efficient and
responsible manner
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Generate reliable free cash flow
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Retire assets safely and responsibly
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Priorities |
Strategy |
Sustainability |
Risk |
see page 7 |
see page 11 |
see page 33 |
see page 79 |
Our business model and the corporate culture we cultivate is unique among the natural
gas and oil industry in that we do not engage in capital-intensive drilling and
development. Rather, our stewardship model focuses on acquiring existing long-life,
low-decline producing wells and, at times, their associated midstream assets, and then
efficiently managing the assets to improve or restore production, reduce unit operating
costs, reduce emissions and generate consistent free cash flow before safely and
permanently retiring those assets at the end of their useful lives.
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Execute Commodity Hedges
to Secure Healthy Margins
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Protect our ability to provide
durable shareholder returns
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Generate Reliable
Free Cash Flow
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Maintain adjusted EBITDA
margins, low capital intensity
and low LOE per unit
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Provide Durable
Shareholder Returns
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Create value for our
shareholders via debt
reduction, fixed dividends,
strategic share repurchases
and accretive acquisitions
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Maintain A Healthy
Balance Sheet
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Maintain low leverage, ample
liquidity and access to
additional capital for
opportunistic growth
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Geographic
Operating
Areas
U.S. NATURAL GAS PLAYS
Our Operating Areas
CENTRAL REGION
Our Central Region includes parts of Texas, Louisiana and Oklahoma, and is home to a number of asset rich natural gas and oil
formations. We currently operate within Texas, Louisiana and Oklahoma in the following plays:
Haynesville, Bossier and Cotton Valley
While in a relatively similar geographic region of East Texas
and West Louisiana, the Bossier shale lies directly above the
Haynesville shale but beneath the Cotton Valley sandstones.
A key benefit to operations in this region is the ability to
access consistent natural gas pipeline transportation from
the wellhead to the Gulf Coast, an area of strong demand
and advantageous pricing. This access to strong pricing and
takeaway capacity has made it a desirable area for
developers and one of rapid growth, particularly in the
Haynesville, with Cotton Valley and Bossier viewed as more
mature. As the wells in this region continue to mature and
decline rates continue to shallow and become more
predictable, it will be a fertile ground for our
continued expansion.
Barnett
An original shale play in the U.S., the Barnett shale is located
in North Texas and is a geological formation rich in natural
gas. The Barnett is home to some of the first horizontal
drilling and hydraulic stimulation that occurred in the early
1990s, unlocking the U.S. shale revolution. For a time during
the early 2000s, the Barnett was the largest natural gas
producing shale play in the U.S. Though drilling in this area
has largely subsided, the maturity of the play with its now
vast portfolio of low decline rate wells makes this area
available for opportunities to complement our existing
mature portfolio through future acquisitions.
Mid Continent
The Mid Continent region stretches across Oklahoma, Kansas
and the Texas panhandle and is generally understood to
reference the Fayetteville, Woodford, Granite Wash,
Springer, Sycamore and Cana Woodford shale natural gas
plays along with numerous other conventional and
unconventional natural gas reservoirs in the Arkoma Basin,
Ardmore Basin and Anadarko Basin. This mature and
developed region has undergone a redevelopment
renaissance over the last several years through the use of
hydraulic stimulation and horizontal drilling. It is an asset rich
environment with an abundance of mature wells and
developed transportation infrastructure making it a valuable
complement to our current portfolio.
U.S. DRY SHALE GAS PRODUCTION
billion cubic feet per day
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