March 17, 2025 - 20-F: Annual and transition report of foreign private issuers [Sections 13 or 15(d)]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from to

Commission file number: 001-41870


	Diversified Energy Company PLC
	(Exact name of Registrant as specified in its charter)

	Not Applicable		England and Wales
	(Translation of Registrant’s name into English)		(Jurisdiction of incorporation or organization)

	1600 Corporate Drive Birmingham, Alabama 35242 Tel: +1 205 408 0909		Bradley G. Gray Diversified Energy Company PLC 1600 Corporate Drive Birmingham, Alabama 35242 Tel: +1 205 408 0909
	(Address of principal executive offices)		(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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
Ordinary shares, nominal (par) value £0.20 per share	DEC	New York Stock Exchange
Ordinary shares, nominal (par) value £0.20 per share	DEC	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		þ Accelerated filer		¨ Non-accelerated filer		¨ Emerging growth company

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 whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the

registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:


¨ U.S. GAAP		þ International Financial Reporting Standards as issued by the International Accounting Standards Board		¨ Other

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 ¨

Diversified Energy Company PLC

2024 Annual Report & Form 20-F

For the Year Ended December 31, 2024

Table of Contents


	Page
Cross Reference to Form 20-F	1
Strategic Report	3
A Differentiated Business Model	3
Geographic Operating Areas	3
Key Facts	4
Strategy	4
Key Performance Indicators	5
Our Business	7
Sustainability Review	17
Financial Review	20
Risk Management Framework	31
Risk Factors	34
Viability and Going Concern	50
Corporate Governance	52
The Chairman’s Governance Statement	52
Governance Framework	52
Our Approach to Governance	55
Board of Directors & Senior Management	57
Directors’ Report	60
The Nomination & Governance Committee’s Report	65
The Audit & Risk Committee’s Report	67
The Remuneration Committee’s Report	72
The Sustainability & Safety Committee’s Report	93
Group Financial Statements	96
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)	97
Consolidated Statement of Comprehensive Income	99
Consolidated Statement of Financial Position	100
Consolidated Statement of Changes in Equity	101
Consolidated Statement of Cash Flows	102
Notes to the Group Financial Statements	103
Supplemental Natural Gas & Oil Information (Unaudited)	145
Additional Information (Unaudited)	148
Payments to Governments Report	148
Alternative Performance Measures	150
Officers and Professional Advisors	153
Shareholder Information	154
Glossary of Terms	160
Exhibits	162
Signatures	164

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. In APMs 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.”


	1

Cross Reference to Form 20-F


			Pages
Part I
Item 1.	Identity of Directors, Senior Management and Advisers		N/A
Item 2.	Offer Statistics and Expected Timetable		N/A
Item 3.	Key Information
	A.	[Reserved]
	B.	Capitalization and indebtedness	N/A
	C.	Reasons for the offer and use of proceeds	N/A
	D.	Risk factors	34-50
Item 4.	Information on the Group
	A.	History and development of the Group	3, 7, 103
	B.	Business overview	7-14
	C.	Organizational structure	104, Exhibit 8.1
	D.	Property, plant and equipment	3, 107, 120, 133
Item 4A.	Unresolved Staff Comments		N/A
Item 5.	Operating and Financial Review and Prospects
	A.	Operating results	20-26
	B.	Liquidity and capital resources	26
	C.	Research and development, patents and licenses, etc.	N/A
	D.	Trend information	31
	E.	Critical accounting estimates	30
Item 6.	Directors, Senior Management and Employees
	A.	Directors and senior management	53, 57-59
	B.	Compensation	72-93, 129, 131
	C.	Board practices	52-55, 63-64
	D.	Employees	115
	E.	Share ownership	61, 63, 129, 131
	F.	Disclosure of a registrant’s action to recover erroneously awarded compensation	N/A
Item 7.	Major Shareholders and Related Party Transactions
	A.	Major shareholders	61, 63
	B.	Related party transactions	144
	C.	Interests of experts and counsel	N/A
Item 8.	Financial Information
	A.	Consolidated Statements and Other Financial Information	96-147
	B.	Significant Changes	N/A
Item 9.	The Offer and Listing
	A.	Offer and listing details	103
	B.	Plan of distribution	N/A
	C.	Markets	103
	D.	Selling shareholders	N/A
	E.	Dilution	N/A
	F.	Expenses of the issue	N/A


	2


			Pages
Item 10.	Additional Information
	A.	Share capital	N/A
	B.	Memorandum and articles of association	[OPEN]
	C.	Material contracts	154
	D.	Exchange controls	154
	E.	Taxation	154-158
	F.	Dividends and paying agents	N/A
	G.	Statement by experts	N/A
	H.	Documents on display	159
	I.	Subsidiary information	N/A
	J.	Annual report to security holders	N/A
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		30, 142-144
Item 12.	Description of Securities Other than Equity Securities
	A.	Debt securities	N/A
	B.	Warrants and rights	N/A
	C.	Other securities	N/A
	D.	American depositary shares	N/A
Part II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		N/A
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		N/A
Item 15.	Controls and Procedures
	A.	Disclosure Controls and Procedures	159
	B.	Management’s annual report on internal control over financial reporting	159-159
	C.	Attestation report of the registered public accounting firm	159
	D.	Changes in internal control over financial reporting	N/A
Item 16.	[Reserved]		N/A
Item 16A.	Audit Committee Financial Expert		68
Item 16B.	Code of Ethics		62
Item 16C.	Principal Accountant Fees and Services		71, 116
Item 16D.	Exemptions from the Listing Standards for Audit Committees		N/A
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		127-129
Item 16F.	Change in Registrant’s Certifying Accountant		N/A
Item 16G.	Corporate Governance		N/A
Item 16H.	Mine Safety Disclosure		N/A
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		N/A
Item 16J.	Insider Trading Policies		61
Item 16K.	Cybersecurity		33
Part III
Item 17.	Financial Statements		N/A
Item 18.	Financial Statements		96-147
Item 19.	Exhibits		162


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Strategic Report


	Page
A Differentiated Business Model	3
Geographic Operating Areas	3
Key Facts	4
Strategy	4
Key Performance Indicators	5
Our Business	7
Sustainability Review	17
Financial Review	20
Risk Management Framework	31
Risk Factors	34
Viability and Going Concern	50

Overview of Our Business

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 natural gas, natural gas liquids and crude oil.

Our proven business model creates sustainable value in today's energy markets 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 and then retire our wells at the end of their lives to optimally steward the resource previously developed by our peers, 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.

A Differentiated Business Model

Our business model is unique among the natural gas and oil industry in that we do not rely on 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, improve operational safety, reduce emissions and

generate consistent free cash flow before safely and permanently retiring those assets at the end of their useful lives.

Daily Operating Priorities

Our guiding daily principles underline our commitment to value creation without compromising the safety of employees. These principles - Safety,

Production, Efficiency and Enjoyment - drive the success of our business model. Our workforce gives precedence to these principles in their daily work.

Geographic Operating Areas

Appalachian Region

The Appalachian Region spans Pennsylvania, Virginia, West Virginia, Kentucky, Tennessee and Ohio and consists of two productive unconventional shale

formations, along with numerous conventional formations. We entered the Appalachian Region in 2001 and currently operate within the Marcellus Shale

and the slightly deeper Utica Shale, as well as many conventional formations.

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 entered

the Central Region in 2021 and currently operate within the Haynesville, Bossier, Cotton Valley, Barnett and Mid Continent plays.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Key Facts for 2024


Net Loss		Total Revenue		Adjusted EBITDA Margin(a)		Adjusted EBITDA(a)
$87 million		$795 million		50%		$472 million

Production Mix		Production		PV-10 Value of Reserves		Asset Acquisitions
84%	natural gas	244,298	natural gas (MMcf)	$1.6	billion(b)	3 acquisitions
12%	NGLs	5,980	NGLs (MBbls)	3,627,589	MMcfe	$585 million, gross
4%	oil	1,568	oil (MBbls)			$388 million, net

Scope 1 Methane Emissions Intensity		No-Leak Rate on Surveyed Assets		Total Recordable Incident Rate		Reportable Spill Intensity
0.7	MT CO2e/MMcfe	98%	Group-wide	0.89	per 200,000 work hours	0.08	oil & water per MBbl

(a)Refer to APMs within this Annual Report & Form 20-F for information on how this metric is calculated and reconciled to IFRS measures.

(b)Based on SEC pricing.

Strategy

Our growth and ability to generate consistent shareholder returns stems from our unique business model and successful execution of low-risk,

disciplined and proven operating techniques.

1 Acquire long-life stable assets

We practice a disciplined approach to acquire long-life stable assets by targeting low-decline producing assets that are value accretive, high margin and

strategically complementary, while also applying extensive environmental, social, land and legal due diligence.


2024 Achievements		Targets for 2025
•Completed three acquisitions in our Central Region, including: •Oaktree working interest acquisition for gross consideration of $410 million and net consideration of $222 million, contributing approximately $66 million MMcfepd to 2024 revenue. •Crescent Pass acquisition for gross consideration of $106 million and net consideration of $98 million, contributing approximately $10 million MMcfepd to 2024 revenue. •East Texas II acquisition for gross consideration of $69 million and net consideration of $68 million, contributing approximately $5 million MMcfepd to 2024 revenue.		•Successfully merge assets acquired in the recently completed acquisition of Maverick Natural Resources, LLC (“Maverick”) to build scale and achieve synergies. •Effectively integrate acquisitions into our existing operations, ensuring seamless transitions and alignment with our strategic objectives to drive growth and maximize synergies. •We will continue our disciplined acquisition strategy, targeting assets that meet our strict investment standards. •We will maintain liquidity rigor, ensuring we are well-positioned to capitalize on market opportunities as they emerge. •Our growth strategy will prioritize expanding in complementary and synergistic ways, while building strong partnerships with development-focused producers in our key operating regions.


Link to Risks:	1 2 4	Link to KPIs:	1 5

2 Operate our assets in a safe, efficient and responsible manner

Our operational strategy and success is closely aligned with the culture we created with our daily operational priorities. Our team embodies these

priorities through our Smarter Asset Management (“SAM”) program, working tirelessly to ensure the safe delivery of clean, affordable and reliable

energy.


2024 Achievements		Targets for 2025
•Annual production of 791 MMcfepd. •Exit rate of 864 MMcfepd. •Adjusted EBITDA margin of 50%. •Achieved a 98% no-leak rate on surveyed assets. •LTIR of 0.38 per 200,000 work hours, a decline of 63% year-over- year.		•We will remain committed to our daily operating priorities: Safety, Production, Efficiency, and Enjoyment. •Our dedication to responsible stewardship remains steadfast. We will focus intently on continuous improvement in all aspects of sustainability, striving to exceed our stakeholders’ expectations. •We will continue to prioritize the SAM program to sustain margins, mitigate natural declines, and leverage expense efficiency opportunities.


Link to Risks:	1 2 4 5 6 7	Link to KPIs:	3 4 5 6 7


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

3 Generate Reliable Free Cash Flow

Our business model is inherently designed to generate free cash flow. Furthermore, we aspire to make cash flows predictable and reliable so we can

consistently generate shareholder return, pay down debt, fund acquisitive growth, and accomplish our sustainability goals and ambitions.


2024 Achievements		Targets for 2025
•Repaid $206 million in asset-backed debt securitizations. •Repurchased 1,638,030 shares, representing $21 million in shareholder value above and beyond the $84 million in dividend distributions. •$151 million gain on settled derivative instruments. •Recorded $8 million in coal mine methane revenues. •Divested certain non-core undeveloped acreage across our footprint for a total of $59 million.		•We will continue our effective hedging strategy to protect cash flows. Additionally, we will capitalize on accretive market opportunities to elevate our hedge book floor. •We will continue to apply our Smarter Asset Management program to maintain low decline rates across our producing assets and review opportunities to optimize both core and non-core assets. •We will remain dedicated to prudent cash flow growth through accretive acquisitions that complement our existing asset base.


Link to Risks:	1 2 3 4 7	Link to KPIs:	1 2 3 4 5

4 Retire assets safely and responsibly

At the end of a well’s economic life, our safe and systematic asset retirement program ensures wells are permanently retired and well sites are

responsibly restored to their natural condition. Our retirement program underscores our strong commitment to a healthy environment, the surrounding

community, our neighbors, and state regulatory authorities.


2024 Achievements		Targets for 2025
•Expanded our asset retirement operations to 18 teams and 18 rigs. •Retired 202 DEC-owned wells in the Appalachian Region and a further 13 DEC-owned wells in our Central Region, surpassing our goal to retire 200 wells in 2024 and exceeding our collective state commitments in Appalachia. •Additionally, we retired 85 third party-owned wells in the Appalachian Region, including 51 state and federal orphan wells and 34 for third party operators, bringing the total wells retired by the Next LVL team to 287 wells.		•We will continue to safely retire wells, aiming to exceed state asset retirement program commitments by identifying and retiring wells at the end of their productive lives. •We will continue to leverage the benefits of vertical integration through our expanded internal asset retirement capacity. •We will maintain constructive and collaborative dialogue with states and industry associations to innovate and ensure best practices in well retirement.


Link to Risks:	1 2 4 5 6	Link to KPIs:	2 4 5 6

Key Performance Indicators

In assessing our performance, the Directors use key performance indicators (“KPIs”) to track our success against our stated strategy. The Directors

assess our KPIs on an annual basis and modify them as needed, taking into account current business developments. The following KPIs focus on

corporate and environmental responsibility, consistent cash flow generation underpinned by prudent cost management, low leverage and adequate

liquidity to protect the sustainability of the business.

Refer to APMs within this Annual Report & Form 20-F for information on how these metrics are calculated and reconciled to IFRS measures.

1 Net Debt-to-Adjusted EBITDA


	2024	2023	2022
Net debt-to-pro forma adjusted EBITDA	3.0x	2.2x	2.4x

During 2024 our leverage ratio increased to 3.0x primarily due to financing the majority of our acquisitions with debt. We actively manage our balance

sheet and seek to maintain a long-term leverage ratio of approximately 2.5x.


Link to Strategy:	1 3	Link to Risks:	1 3 4 5 6 7

2 Adjusted EBITDA Margin


	2024	2023	2022
Adjusted EBITDA Margin	50%	52%	49%

Total revenue, inclusive of settled hedges and adjusted EBITDA decreased 10% and 14%, respectively, in 2024, while adjusted EBITDA margin

remained relatively consistent at 50%. The decrease in total revenue, inclusive of settled hedges was primarily due to a decrease in the average realized

sales price, lower production, a decline in hedge settlement gains, and normal declines. The decrease in adjusted EBITDA was driven by a decrease in

commodity pricing and lower production.


Link to Strategy:	3 4	Link to Risks:	1 2 3 4 5 6 7


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

3 Adjusted Operating Cost per Mcfe


	2024	2023	2022
Adjusted Operating Cost per Mcfe	$1.78	$1.76	$1.77

Adjusted operating cost per Mcfe for 2024 was $1.78, an increase of 1% compared with 2023. This increase was primarily due to higher employees,

administrative costs and professional services due to investments made in staff and systems and costs related to litigation expense.


Link to Strategy:	2 3	Link to Risks	1 4 5 6

4 Net Cash Provided by Operating Activities


	2024	2023	2022
Net Cash Provided by Operating Activities (in millions)	$346	$410	$388

Net cash provided by operating activities for 2024 was $346 million, a decrease of 16% compared with 2023. This decrease was due to the decrease in

total revenue resulting from decreases in pricing and production. However, this was partially offset by changes in working capital, which generated $50

million less in cash outflows compared to 2023.


Link to Strategy:	2 3 4	Link to Risks:	1 2 3 5 6 7

5 Emissions Intensity


	2024	2023	2022
Emissions Intensity (MT CO2e/MMcfe)	0.7	0.8	1.2

Realized a 13% year-over-year reduction in Scope 1 methane emissions intensity, achieved through investments in leak detection technologies,

replacing natural gas-driven pneumatics with instrument air or solar solutions, and enhanced aerial emissions surveillance in our Central Region.


Link to Strategy:	1 2 3 4	Link to Risks:	2 5

6 Meet or Exceed State Asset Retirement Goals


	2024	2023	2022
DEC-owned well retirements(a)	215	222	214
Wells retired by Next LVL	287	383	262

(a)DEC wells inclusive of 13, 21 and 14 Central Region wells retired during 2024, 2023 and 2022, respectively.

A total of 215 DEC-owned wells, including 13 in the Central Region, were retired across our operating footprint, surpassing our goal to retire 200 wells

and exceeding our collective state commitments in Appalachia. Additionally, Next LVL Energy plugged a total of 287 wells in Appalachia, including 202

DEC-owned wells and 85 third party-owned wells consisting of 51 state and federal orphan wells and 34 for third party operators.


Link to Strategy:	.4.	Link to Risks:	2 4 5

7 Safety Performance


	2024	2023	2022
TRIR (per 200,000 work hours)	0.89	1.28	0.73
LTIR (per 200,000 work hours)	0.38	1.04	0.66
MVA (incidents per million miles)	0.34	0.55	0.69

Our 2024 TRIR was 0.89, a 30% improvement from 2023, driven by a foreman-led safety approach, enhanced good catch/near miss reporting, and a

new safety program for short-service field employees. Additionally, our 2024 LTIR was 0.38, reflecting a 63% improvement from 2023, attributable to

the same initiatives.

Moreover, our 2024 MVA rate was 0.34, a 38% improvement from 2023. This improvement was primarily due to specific actions taken to enhance

performance and accountability, including the implementation of vehicle telemetric monitoring.


Link to Strategy:	.2.	Link to Risks:	5 6


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Our Business

History & Development of the Business

We are an independent energy company focused on natural gas and liquids production, transportation, marketing and well retirement, primarily located

within the Appalachian and Central regions of the United States. We were incorporated in 2014 in the United Kingdom, and our predecessor business

was co-founded in 2001 by our Chief Executive Officer, Robert Russell (“Rusty”) Hutson, Jr., with an initial focus on primarily natural gas and oil

production in West Virginia. In recent years, we have grown rapidly by capitalizing on opportunities to acquire and enhance producing assets and by

leveraging the operating efficiencies that result from economies of scale. As of December 31, 2024, we have completed 27 acquisitions since 2017 for a

combined purchase price of approximately $3.1 billion. In addition, on March 14, 2025, we completed our previously announced acquisition of Maverick

for a gross purchase price of approximately $1,275 million.

Throughout our history, we have prioritized sustainability and efficiency in our operations. Recognizing the global reliance on natural gas, we emphasize

the importance of responsible ownership and environmental stewardship in managing natural gas and crude oil wells and pipelines. Our proven track

record of acquiring, integrating and responsibly operating assets reflects this commitment. With our focus on efficient and environmentally sound energy

production, we are well-positioned to assist in meeting national and global energy demands.

Other Information

We were incorporated as a public limited company with the legal name Diversified Gas & Oil PLC under the laws of the United Kingdom on July 31, 2014

with the company number 09156132. On May 6, 2021, we changed our company name to Diversified Energy Company PLC.

Our registered office is located at 4th Floor Phoenix House, 1 Station Hill, Reading, Berkshire United Kingdom, RG1 1NB. In February 2017, our shares

were admitted to trading on the AIM Market of the London Stock Exchange (“AIM”) under the ticker “DGOC.” In May 2020, our shares were admitted to

the premium listing of the Official List of the Financial Conduct Authority and to trading on the Main Market of the LSE. With the change in corporate

name in 2021, our shares listed on the LSE began trading under the new ticker “DEC.” In December 2023, the Group’s shares were admitted to trading

on the New York Stock Exchange (“NYSE”) under the ticker “DEC.” Following the changes to the UK Listing Rules on July 29, 2024, the Company

continues to remain listed on the new equity shares (commercial companies) category of the Official List of the Financial Conduct Authority. As of

December 31, 2024, the principal trading market for the Group’s ordinary shares was the LSE.

Our principal executive offices are located at 1600 Corporate Drive, Birmingham, Alabama 35242, and our telephone number at that location is +1 205

408 0909. Our website address is www.div.energy. The information contained on, or that can be accessed from, our website does not form part of this

Annual Report & Form 20-F. We have included our website address solely as an inactive textual reference.

Business Overview

Our Business Model

•Acquire - We maintain a disciplined approach to evaluating opportunities to ensure that we only pursue those properties 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.

•Optimize - 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 emissions.

•Produce - 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 safety, environmental and financial best interests.

•Transport - 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.

•Retire - 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. Between 2022 and 2024,

we made investments that allowed us to expand our asset retirement capabilities through a series of acquisitions.

Our Strengths

•Low-risk and low-cost portfolio of assets

•Long-life and low-decline production

•High margin assets that leverage significant scale, supported by owned midstream and asset retirement infrastructure, along with an internal

product marketing team

•A management and operational team with extensive experience

•Proven history of successfully consolidating and integrating acquired assets

Outlook

Looking ahead, we will continue to prudently manage our long-life, low-decline asset portfolio and the consistent cash flows they generate. We plan to

maintain our hedging strategy to safeguard cash flow. Our goal is to retain our strategic advantages through purposeful growth, employing a disciplined

acquisition strategy that secures low-cost financing to support acquisitive growth while maintaining low leverage and prudent liquidity. Additionally, we

intend to stay proactive in our sustainability efforts by continuing to allocate capital to future sustainability initiatives.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Reserve Data

Summary of Reserves

The following table presents our estimated net proved reserves, Standardized Measure and PV-10 as of December 31, 2024, using SEC pricing.

Standardized Measure and PV-10 are based on the proved reserve report as of such date by Netherland, Sewell & Associates, Inc. (“NSAI”), our

independent petroleum engineering firm. A copy of the proved reserve report is included as an exhibit to this Annual Report & Form 20-F. Refer to

Preparation of Reserve Estimates and Estimation of Proved Reserves within this Annual Report & Form 20-F for a definition of proved reserves and the

technologies and economic data used in their estimation.


	December 31, 2024
	SEC Pricing(a)
Proved developed reserves
Natural gas (MMcf)	2,895,619
NGLs (MBbls)	103,471
Oil (MBbls)	18,524
Total proved developed reserves (MMcfe)	3,627,589
Proved undeveloped reserves
Natural gas (MMcf)	—
NGLs (MBbls)	—
Oil (MBbls)	—
Total proved undeveloped reserves (MMcfe)	—
Total proved reserves
Natural gas (MMcf)	2,895,619
NGLs (MBbls)	103,471
Oil (MBbls)	18,524
Total proved reserves (MMcfe)	3,627,589
Prices used
Natural gas (Mmbtu)	$2.13
Oil and NGLs (Bbls)	$76.32
PV-10 (thousands)
Pre-tax (Non-GAAP)(b)	$1,591,772
PV of Taxes	(194,851)
Standardized Measure	$1,396,921
Percent of estimated total proved reserves that are:
Natural gas	80%
Proved developed	100%
Proved undeveloped	—%

(a)Our estimated net proved reserves were determined using average first-day-of-the-month prices for the prior 12 months in accordance with SEC guidance. For natural

gas volumes, the average Henry Hub spot price of $2.13 per MMBtu as of December 31, 2024 was adjusted for gravity, quality, local conditions, gathering and

transportation fees, and distance from market. For NGLs and oil volumes, the average WTI price of $76.32 per Bbl as of December 31, 2024 was similarly adjusted for

gravity, quality, local conditions, gathering and transportation fees, and distance from market. All prices are held constant throughout the lives of the properties.

(b)The PV-10 of our proved reserves as of December 31, 2024 was prepared without giving effect to taxes or hedges. PV-10 is a non-GAAP and non-IFRS 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. We believe that the presentation of PV-10 is relevant and useful to our investors as supplemental disclosure to the Standardized Measure because it presents

the discounted future net cash flows attributable to our reserves prior to taking into account future corporate income taxes and our current tax structure. 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. Because of this, PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from

proved reserves on a more comparable basis. Investors should be cautioned that neither PV-10 nor the Standardized Measure represents an estimate of the fair market

value of our proved reserves.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Proved Reserves

As of December 31, 2024, our estimated proved reserves totaled 3,627,589 MMcfe, a decrease of 6% from the prior year-end, with a Standardized

Measure of $1.4 billion. Natural gas constituted approximately 80% of our total estimated proved reserves and 80% of our total estimated proved

developed reserves. The following table provides a summary of the changes in our proved reserves during the years ended December 31, 2024, 2023

and 2022.


	Total (MMcfe)
Total proved reserves as of December 31, 2021	4,629,029
Extensions and discoveries	13,326
Revisions to previous estimates	379,812
Purchase of reserves in place	331,043
Sales of reserves in place	(6,912)
Production	(296,121)
Total proved reserves as of December 31, 2022	5,050,177
Extensions and discoveries	1,012
Revisions to previous estimates	(659,379)
Purchase of reserves in place	126,803
Sales of reserves in place	(369,035)
Production	(299,632)
Total proved reserves as of December 31, 2023	3,849,946
Extensions and discoveries	1,287
Revisions to previous estimates	(106,936)
Purchase of reserves in place	173,056
Sales of reserves in place	(178)
Production	(289,586)
Total proved reserves as of December 31, 2024	3,627,589

Extensions and Discoveries

During 2024, 1,287 MMcfe were adjusted due to well assignments recorded in the accounting actuals.

During 2023, 1,012 MMcfe were adjusted due to well assignments recorded in the accounting actuals.

During 2022, we elected to participate in select development activities on a non-operated basis generating 13,326 MMcfe in reserves.

Revisions to Previous Estimates

During 2024, we recorded 106,936 MMcfe in revisions to previous estimates. The downward revisions were primarily associated with changes in the

trailing 12-month average realized Henry Hub first day spot price, which decreased approximately 19% as compared to the December 31, 2023. These

factors drove a net downward revision that impacted well economics and well life.

During 2023, we recorded 659,379 MMcfe in revisions to previous estimates. The downward revisions were primarily associated with changes in the

trailing 12-month average realized Henry Hub first day spot price, which decreased approximately 58% as compared to December 31, 2022 along with a

17% decrease in the 12 month average WTI first day spot price. These factors primarily drove a net downward revision that impacted well economics

and well life.

During 2022, we recorded 379,812 MMcfe in revisions to previous estimates. These positive performance revisions were primarily associated with

changes in the trailing 12-month average realized Henry Hub spot price, which increased approximately 77% as compared to the December 31, 2021

Henry Hub spot price due to the war between Russia and Ukraine, as well as other geopolitical factors. These factors primarily drove a net upward

revision of 386,064 MMcfe due to changes in pricing that impacted well economics. These increases were offset by a 6,252 MMcfe downward revision

for changes in timing.

Purchase of Reserves in Place

During 2024, 173,056 MMcfe of purchases of reserves in place were associated with the Oaktree, Crescent Pass and East Texas II acquisitions.

During 2023, 126,803 MMcfe of purchases of reserves in place were associated with the Tanos II acquisition.

During 2022, 331,043 MMcfe of purchases of reserves in place were associated with the East Texas and ConocoPhillips acquisitions.

Refer to Note 5 in the Notes to the Group Financial Statements for additional information about acquisitions and divestitures.

Sales of Reserves in Place

During 2024, 178 MMcfe of sales of reserves in place were primarily associated with the divestitures of non-core assets.

During 2023, 369,035 MMcfe of sales of reserves in place were primarily associated with the divestitures of non-core assets.

During 2022, 6,912 MMcfe of sales of reserves in place were primarily associated with the divestitures of non-core assets.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Refer to Note 5 in the Notes to the Group Financial Statements for additional information about acquisitions and divestitures.

Proved Undeveloped Reserves

We aim to obtain proved developed producing wells through acquisitions in accordance with our growth strategy rather than through development

activities. We accordingly contribute limited capital to development activities. From time to time, when acquiring packages of wells, we also acquire

certain locations that are in development by the acquiree at the time of the acquisition or could be developed in the future. When economic, we will

engage third parties to complete the existing development activities, and such reserves are included below as proved undeveloped reserves. We do not

have a development program and, as a result, any additional undrilled locations that we hold cannot be classified as undeveloped reserves in

accordance with SEC rules unless a development plan is in place. As of December 31, 2024, we had no such development plans and therefore have not

classified these undrilled locations as proved undeveloped reserves.

The following table summarizes the changes in our estimated proved undeveloped reserves during the years ended December 31, 2024, 2023 and 2022:


	Total (MMcfe)
Proved undeveloped reserves as of December 31, 2021	3,505
Extensions and discoveries	8,832
Revisions to previous estimates	—
Purchase of reserves in place	—
Sales of reserves in place	—
Converted to proved developed reserves	(3,505)
Proved undeveloped reserves as of December 31, 2022	8,832
Extensions and discoveries	—
Revisions to previous estimates	—
Purchase of reserves in place	24,821
Sales of reserves in place	(8,832)
Converted to proved developed reserves	—
Proved undeveloped reserves as of December 31, 2023	24,821
Extensions and discoveries	—
Revisions to previous estimates	(8,528)
Purchase of reserves in place	—
Sales of reserves in place	—
Converted to proved developed reserves	(16,293)
Proved undeveloped reserves as of December 31, 2024	—

Extensions and Discoveries

During 2024, no reserves were added from extension or discovery activities.

During 2023, no reserves were added from extension or discovery activities.

During 2022, we elected to participate in select development activities where third parties were engaged to complete the development. Seven of these

wells were in progress as of December 31, 2023, generating 8,832 MMcfe in proved undeveloped reserves.

Revisions of Previous Estimates

During 2024, there were 8,528 MMcfe of revisions to previous estimates as a result of changes in engineering assumptions due to performance. These

revisions were related to the completion of one Tanos II well in 2024 that was under development as of December 31, 2023.

During 2023, no reserves were added from extension or discovery activities.

During 2022, no reserves were added from extension or discovery activities.

Purchase of Reserves in Place

During 2024, there were no purchases of proved undeveloped reserves in place.

During 2023, the 24,821 MMcfe of purchase of reserves in place were associated with the Tanos II acquisition and related to four wells in progress that

have been drilled and are awaiting hydraulic fracture stimulation.

During 2022, there were no purchases of proved undeveloped reserves in place.

Refer to Note 5 in the Notes to the Group Financial Statements for additional information about acquisitions and divestitures.

Sales of Reserves in Place

During 2024, there were no sales of reserves in place.

During 2023, the 8,832 in sales of reserves in place were divested as part of the sale of 80% of the equity interest in DP Lion Equity Holdco LLC in

December 2023.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

During 2022, there were no sales of reserves in place.

Refer to Note 5 in the Notes to the Group Financial Statements for additional information about acquisitions and divestitures.

Converted to Proved Developed Reserves

During 2024, there were 16,293 undeveloped reserves converted to developed reserves as a result of completing three Tanos II wells in 2024 that were

under development as of December 31, 2023.

During 2023, the were no undeveloped reserves converted to developed reserves.

During 2022, 3,505 MMcfe of undeveloped reserves were converted to developed reserves as a result of completing five Tapstone wells in 2022 that

were under development as of December 31, 2021.

Developed and Undeveloped Acreage

The following table sets forth certain information regarding the total developed and undeveloped acreage in which we owned an interest as of

December 31, 2024. Developed acres are acres spaced or assigned to productive wells and do not include undrilled acreage held by production under

the terms of the lease. Undeveloped acres are acres on which wells have not been drilled or completed to a point that would permit the production of

commercial quantities of oil or natural gas, regardless of whether such acreage contains proved reserves. Approximately 99.9% of our acreage was held

by production at December 31, 2024.


	Developed Acreage		Undeveloped Acreage		Total Acreage
	Gross(a)	Net(b)	Gross(a)	Net(b)	Gross(a)	Net(b)
As of December 31, 2024	7,073,071	3,917,121	8,418,195	5,572,567	15,491,266	9,489,688

(a)A gross acre is an acre in which a working interest is owned. The number of gross acres is the total number of acres in which a working interest is owned.

(b)A net acre is deemed to exist when the sum of the fractional ownership working interests in gross acres equals one. The number of net acres is the sum of the fractional

working interests owned in gross acres expressed as whole numbers and fractions thereof.

The undeveloped acreage numbers presented in the table above have been compiled using best efforts to review and determine acreage that is not

currently drilled but may be available for drilling at the current time under certain circumstances. Whether or not undrilled acreage may be drilled and

thereafter produce economic quantities of oil or gas is related to many factors which may change over time, including natural gas and oil prices, service

vendor availability, regulatory regimes, midstream markets, end user demand, and macro and micro financial conditions; the undeveloped acreage

described herein is presented without an opinion as to economic viability, as a result of the aforesaid factors. Additionally, it is noted that certain

formations on a land tract may be already developed while other formations are undeveloped.

The following table sets forth the number of total gross and net undeveloped acres as of December 31, 2024 that will expire in 2025, 2026 and 2027

unless production is established within the spacing units covering the acreage prior to the expiration dates or unless such acreage is extended or

renewed.


	Gross	Net
2025	25,721	2,884
2026	2,690	59
2027	—	—

Our primary focus is to operate our existing producing assets safely, efficiently and responsibly. However we also evaluate areas nearing lease

expiration for potential development opportunities when it is prudent to do so. As of December 31, 2024, we had no development plans and therefore

have not classified any other potential undrilled locations on this acreage as proved undeveloped reserves.

Preparation of Reserve Estimates

Our reserve estimates as of December 31, 2024 included in this Annual Report & Form 20-F were evaluated by our independent reserves auditors,

Netherland, Sewell & Associates, Inc. (“NSAI”), in accordance with petroleum engineering and evaluation standards published by The Petroleum

Resources Management System jointly sponsored by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of

Petroleum Geologists and the Society of Petroleum Evaluation Engineers. These estimates have been prepared in accordance with the definitions and

regulations of the SEC.

NSAI is a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies. NSAI was founded in 1961

and performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F-2699. Within NSAI, the

technical persons primarily responsible for auditing the estimates set forth in the NSAI reserves report incorporated herein are Mr. Robert C. Barg and

Mr. William J. Knights. Mr. Barg, a Licensed Professional Engineer in the State of Texas (No. 71658), has been practicing consulting petroleum

engineering at NSAI since 1989 and has over six years of prior industry experience. He graduated from Purdue University in 1983 with a Bachelor of

Science Degree in Mechanical Engineering. Mr. Knights, a Licensed Professional Geoscientist in the State of Texas, Geology (No. 1532), has been

practicing consulting petroleum geoscience at NSAI since 1991 and has over 10 years of prior industry experience. He graduated from Texas Christian

University in 1981 with a Bachelor of Science Degree in Geology and in 1984 with a Master of Science Degree in Geology. Both technical principals meet

or exceed the education, training and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas

Reserves Information promulgated by the Society of Petroleum Engineers; both are proficient in judiciously applying industry standard practices to

engineering and geoscience evaluations, as well as applying SEC and other industry reserves definitions and guidelines.

Our internal staff of petroleum engineers and geoscience professionals work diligently to ensure the integrity, accuracy and timeliness of data furnished

to our independent reserves auditors for their reserve evaluation process. Our technical team regularly meets with the independent reserves auditors to

review properties and discuss methods and assumptions used to prepare reserve estimates. The reserve estimates and related reports are reviewed and

approved by our Vice President of Reservoir Engineering. The Vice President of Reservoir Engineering holds a Bachelor of Science in Petroleum

Engineering and has been with the Group since 2018 with 26 years of experience in petroleum engineering and over 23 years of experience evaluating


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

natural gas and oil reserves. Prior to joining the Group in 2018, our Vice President of Reservoir Engineering, who is an active member of the Society of

Petroleum Engineers, served in various reservoir engineering roles for public companies engaged in exploration and production operations.

Estimation of Proved Reserves

Proved reserves are quantities of natural gas or oil which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to

be commercially recoverable from known reservoirs under existing economic and operating conditions. The term “reasonable certainty” implies a high

degree of confidence that the quantities of natural gas or oil actually recovered will equal or exceed the estimate. To achieve reasonable certainty, DEC

and the independent reserves auditors employed technologies that have been demonstrated to yield results with consistency and repeatability. The

technologies and economic data used in the estimation of our proved reserves may include, but are not limited to, well logs, geologic maps and

available downhole and production data, and well-test data.

Reserves engineering is and must be recognized as a subjective process of estimating volumes of economically recoverable oil and natural gas that

cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and

geological interpretation. As a result, the estimates of different engineers often vary. In addition, the results of drilling, testing and production may

justify revisions of such estimates. Accordingly, reserve estimates often differ from the quantities of natural gas, NGLs and oil that are ultimately

recovered. Estimates of economically recoverable natural gas, NGLs and oil and of future net cash flows are based on a number of variables and

assumptions, all of which may vary from actual results, including geologic interpretation, prices and future production rates and costs. See Risk Factors

for additional information.

Productive Wells

Productive wells consist of producing wells, wells capable of production and wells awaiting connection to production facilities. Gross wells are the total

number of producing wells in which we have an interest, operated and non-operated, and net wells are the sum of our fractional working interest owned

in gross wells. The following table summarizes our productive natural gas and oil wells as of December 31, 2024.


	As of December 31, 2024
Natural gas wells	73,055
Oil wells	3,455
Total gross productive wells	76,510

Natural gas wells	62,384
Oil wells	1,796
Total net productive wells	64,180


	As of December 31, 2024
Total gross in progress wells	—
Total net in progress wells	—

Exploratory and Development Drilling Activities

Information regarding our drilling and development activities is set forth below:


	Development
	Productive Wells		Dry Wells		Total
Year	Gross	Net	Gross	Net	Gross	Net
2024	—	—	—	—	—	—
2023	4	4	—	—	4	4
2022	5	2	—	—	5	2

We drilled no exploratory wells (productive or dry) during the years ended December 31, 2024, 2023 and 2022.

During 2022, we completed the development of the five wells that had been under development as of December 31, 2021. We then elected to

participate in seven development opportunities on a non-operating basis in our Appalachian Region. All seven of the Appalachian development wells

remained in progress as of December 31, 2022.

During 2023, we completed the development of two of the seven Appalachian wells that were under development as of December 31, 2022. The

remaining five Appalachian wells were divested in connection with the sale of 80% of the equity interest in DP Lion Equity Holdco LLC in December

2023. On March 1, 2023, we also completed the Tanos II acquisition, which included five wells in the Central Region that were under development at

the date of acquisition. During 2023, we completed one of these five wells. Four Central Region development wells remain in progress as of December

31, 2023.

During 2024, we completed the development of the four remaining wells acquired in the Tanos II acquisition that had been under development as of

December 31, 2023. As of December 31, 2024, we had no development wells in progress.

Refer to Note 5 in the Notes to the Group Financial Statements for additional information regarding the acquisitions and divestitures.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Production Volumes, Average Sales Prices and Operating Costs


	Year Ended
	December 31, 2024	December 31, 2023	December 31, 2022
Production
Natural Gas (MMcf)	244,298	256,378	255,597
NGLs (MBbls)	5,980	5,832	5,200
Oil (MBbls)	1,568	1,377	1,554
Total production (MMcfe)	289,586	299,632	296,121
Average realized sales price
(excluding impact of derivatives settled in cash)
Natural gas (Mcf)	$1.90	$2.17	$6.04
NGLs (Bbls)	25.17	24.23	36.29
Oil (Bbls)	74.71	75.46	89.85
Total (Mcfe)	$2.53	$2.68	$6.33
Average realized sales price
(including impact of derivatives settled in cash)
Natural gas (Mcf)	$2.57	$2.86	$2.98
NGLs (Bbls)	24.32	26.05	19.84
Oil (Bbls)	69.54	68.44	72.00
Total (Mcfe)	$3.05	$3.27	$3.30
Operating costs per Mcfe
LOE(a)	$0.80	$0.71	$0.62
Production taxes(b)	0.12	0.21	0.25
Midstream operating expense(c)	0.24	0.23	0.24
Transportation expense(d)	0.31	0.32	0.40
Total operating expense per Mcfe	$1.47	$1.47	$1.51

(a)LOE is defined as the sum of employee and benefit expenses, well operating expense (net), automobile expense and insurance cost.

(b)Production taxes include severance and property taxes. Severance taxes are generally paid on produced natural gas, NGLs and oil production at fixed rates established

by federal, state or local taxing authorities. Property taxes are generally based on the taxing jurisdictions’ valuation of our natural gas and oil properties and midstream

assets.

(c)Midstream operating expenses are daily costs incurred to operate our owned midstream assets inclusive of employee and benefit expenses.

(d)Transportation expenses are daily costs incurred from third-party systems to gather, process and transport our natural gas, NGLs and oil.

Significant Fields

We operate in four primary producing areas: (i) Appalachia, (ii) East Texas and Louisiana, (iii) the Barnett Shale, and (iv) the mid-continent region. The

following table presents production for our Appalachian Region, which is considered significant, or greater than 15% of our total proved reserves, for the

periods presented.


	Year Ended
APPALACHIA	December 31, 2024	December 31, 2023	December 31, 2022
Production
Natural Gas (MMcf)	139,900	167,930	180,194
NGLs (MBbls)	2,931	3,018	2,810
Oil (MBbls)	390	394	423
Total production (MMcfe)	159,826	188,402	199,592

Customers

Our production is generally sold on month-to-month contracts at prevailing market prices.

During the years ended December 31, 2024, 2023 and 2022, no customers individually comprised more than 10% of total revenues.

Given the availability of alternative purchasers for oil and natural gas, we believe that losing any single purchaser would not materially impact our ability

to sell future production. To mitigate potential credit risk, we may occasionally require customers to provide financial security.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Delivery Commitments

We have contractually agreed to deliver firm quantities of natural gas to various customers, which we expect to fulfill with production from existing

reserves. We regularly monitor our proved developed reserves to ensure sufficient availability to meet these commitments. The following table

summarizes our total gross commitments, compiled using best estimates based on our sales strategy, as of December 31, 2024.


	Natural gas (MMcf)
2025	77,187
2026	52,802
2027	130,911
Thereafter	242,276

Transportation and Marketing

Diversified Energy Marketing, LLC, our wholly owned marketing subsidiary, focuses on commodity marketing, asset optimization, producer services and

strategic management of our transportation portfolio. Our mission is to enhance operational efficiency and profitability by leveraging market insights,

operational expertise and strategic asset management to ensure reliable flow market access.

We offer a comprehensive suite of services, including the marketing of natural gas, NGL’s and oil, risk management, logistical support and strategic

transportation management. This approach maximizes market presence, financial outcomes and consistent product flow, capitalizing on our

transportation infrastructure and vertically integrated midstream systems. Our midstream infrastructure and strategic arrangements provide access to

high-demand markets, particularly in the U.S. Gulf Coast, while utilizing low-cost transportation in Appalachia. This synergy with our asset profile

ensures advantageous pricing and flow assurance with minimal firm transportation agreements. As of December 31, 2024, our transportation

arrangements provide access to 522 MMcfepd of takeaway capacity.

As a dedicated arm of DEC, our marketing team aligns closely with our broader goals. With experienced professionals and a deep understanding of the

energy market, we are committed to delivering value and reliability to our stakeholders, navigating industry complexities to achieve operational

excellence.

Competition

Our marketing activities face competition from numerous companies, many with greater financial and other resources. Competitors include other

producers and affiliates with extensive pipeline systems for transportation from producers to end users. Competition is also influenced by the cost and

availability of alternative fuels, consumer demand, and the cost of and proximity of pipelines and other transportation facilities. We believe that our

future success in the marketing segment depends on establishing and maintaining strong customer relationships.

Seasonality

Demand for natural gas typically decreases in spring and fall, and increases in summer and winter. However, seasonal anomalies and consumer

procurement initiatives can mitigate these fluctuations. Seasonal anomalies can also heighten competition for equipment, supplies, and personnel,

potentially causing shortages, increased costs or, operational delays.

Title to Properties

We believe we hold satisfactory title to nearly all our active properties, adhering to industry standards. Our properties are subject to customary royalties,

contracts, consents, preferential purchase rights, tax liens, laws and other encumbrances, which we believe do not materially affect their use or value.

Before acquiring producing wells, we conduct thorough title investigations consistent with industry standards. For properties we operate, we address

significant title defects as needed. We believe our title reviews are reasonable and protective for a representative cross-section of our wells.

Government Regulation

General

Our operations in the United States are subject to various U.S. federal, state and local (including county and municipal level) laws and regulations.

These laws and regulations cover virtually every aspect of our operations including, among other things: use of public roads; construction of well pads,

impoundments, tanks and roads; pooling and unitizations; water withdrawal and procurement for well stimulation purposes; wastewater discharge, well

drilling, casing and hydraulic fracturing; stormwater management; well production; well plugging; venting or flaring of natural gas; pipeline construction

and the compression and transportation of natural gas and liquids; reclamation and restoration of properties after natural gas and oil operations are

completed; handling, storage, transportation and disposal of materials used or generated by natural gas and oil operations; the calculation, reporting

and payment of taxes on natural gas and oil production; and gathering of natural gas production. Various governmental permits, authorizations and

approvals under these laws and regulations are required for exploration and production as well as midstream operations. These laws and regulations,

and the permits, authorizations and approvals issued pursuant to such laws and regulations are intended to protect, among other things: air quality;

ground water and surface water resources, including drinking water supplies; wetlands; waterways; protected plants and animal species; natural

resources; and the health and safety of our employees and the communities in which we operate.

We endeavor to conduct our operations in compliance with all applicable U.S. federal, state and local laws (including county and municipal level) and

regulations. However, because of extensive and comprehensive regulatory requirements against a backdrop of variable geologic and seasonal

conditions, non-compliance during operations can occur. Certain non-compliance may result in fines or penalties, but depending on the nature of the

non-compliance could also result in civil or criminal enforcement actions, additional restrictions on our operations, or make it more difficult for us to

obtain necessary permits in the future. The possibility exists that new laws or regulations may be adopted which could have a significant impact on our

operations or on our customers’ ability to use our natural gas, natural gas liquids and oil, and may require us or our customers to change their

operations significantly or incur substantial costs.

Environmental Laws

Many of the U.S. laws and regulations referred to above vary according to the jurisdiction in which we conduct our operations. In addition to state or

local laws and regulations, our operations are also subject to numerous federal environmental laws and regulations. Below is a discussion of some of the

more significant federal laws and regulations applicable to our operations.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Clean Air Act

The federal Clean Air Act and associated federal and state regulations regulate air emissions through permitting and/or emissions control requirements.

These regulations affect the entire value chain from oil and natural gas production, to gathering, to processing, to transmission and storage, and then to

distribution operations. Various equipment and activities in our assets are subject to regulation, including compressors, engines, dehydrators, storage

tanks, pneumatic devices, fugitive components, and blowdowns. We obtain permits, typically from state or local authorities, or document exemptions

necessary to authorize these activities. Further, we are required to obtain pre-approval for construction or modification of certain facilities, and/or to use

specific equipment, technologies or best management practices to control emissions. Some states also require a separate operating permit to be

obtained for on-going operations.

Federal and state governmental agencies continue to review and revise the air quality regulations affecting oil and natural gas activities, and further

regulation could increase our cost or otherwise affect our ability to produce. For instance, on March 8, 2024, the U.S. Environmental Protection Agency

(“EPA”) finalized New Source Performance Standard Subpart OOOOb (“NSPS OOOOb”) for new, modified, and reconstructed sources after December 6,

2022, and Emissions Guideline Subpart OOOOc (“EG OOOOc”) for sources existing prior to December 6, 2022. Most provisions of NSPS OOOOb took

effect immediately while certain requirements have phase-in periods. EG OOOOc requires individual states to incorporate similar provisions into their

regulations (or rely upon EPA’s model requirements) and will require approximately five years to be implemented. The affected source categories under

NSPS OOOOb and EG OOOOc include well completions, fugitive emissions, liquids unloading, process controllers, process pumps, storage vessels, and

associated gas.

EPA last year also proposed two interrelated regulations. On August 1, 2023, EPA proposed revisions to the greenhouse gas reporting rule for the oil and

natural gas industry to change the calculation methodology to be primarily based on actual emission measurements rather than emission factors. These

changes facilitate the implementation of a methane fee under the Waste Emission Charge (“WEC”) rule which was proposed on January 26, 2024. Both

rules were finalized in late 2024 as required by the Inflation Reduction Act (“IRA”) of 2022. Under the WEC rule, reporters would be subject to a fee

beginning in 2025 at $900 per ton of methane emissions that exceed thresholds prescribed under the rule. These methane emissions would be based on

those reported under the greenhouse gas reporting rule. We achieved zero excess emissions under the WEC program in 2024 and therefore, are not

required to pay any WEC fees in 2025. President Trump announced following his election in November 2024 an intent to work with the Republican-

majority Congress to repeal any such “methane fee” (the WEC). In February 2025, Congress passed joint resolution H.J. Res. 35 disapproving EPA’s

2024 WEC rule under the Congressional Review Act; if the joint resolution becomes law, the WEC rule will have no force or effect.

Clean Water Act

The federal Clean Water Act (“CWA”) and corresponding state laws affect our operations by regulating storm water or other discharges of substances,

including pollutants, sediment, and spills and releases of oil, brine and other substances, into surface waters, and in certain instances imposing

requirements to dispose of produced wastes and other oil and gas wastes at approved disposal facilities. The discharge of pollutants into jurisdictional

waters is prohibited, except in accordance with the terms of a permit issued by the EPA, the U.S. Army Corps of Engineers, or a delegated state agency.

These permits require regular monitoring and compliance with effluent limitations, and include reporting requirements. Federal and state regulatory

agencies can impose administrative, civil and/or criminal penalties for non-compliance with discharge permits or other requirements of the CWA and

analogous state laws and regulations.

Endangered Species and Migratory Birds

The Endangered Species Act and related state laws and regulations protect plant and animal species that are threatened or endangered. The Migratory

Bird Treaty Act and the Bald and Golden Eagle Protection Act provides similar protections to migratory birds and bald and golden eagles, respectively.

Some of our operations are located in areas that are or may be designated as protected habitats for endangered or threatened species, or in areas

where migratory birds or bald and golden eagles are known to exist. Laws and regulations intended to protect threatened and endangered species,

migratory birds, or bald and golden eagles could have a seasonal impact on our construction activities and operations. New or additional species that

may be identified as requiring protection or consideration could also lead to delays in obtaining permits and/or other restrictions, including

operational restrictions.

Safety of Gas Transmission and Gathering Pipelines

Natural gas pipelines serving our operations are subject to regulation by the U.S. Department of Transportation’s Pipeline and Hazardous Materials

Safety Administration (“PHMSA”) pursuant to the Natural Gas Pipeline Safety Act of 1968 (“NGPSA”), as amended by the Pipeline Safety Act of 1992, the

Accountable Pipeline Safety and Partnership Act of 1996, the Pipeline Safety Improvement Act of 2002 (“PSIA”), the Pipeline Inspection, Protection,

Enforcement and Safety Act of 2006, and the 2011 Pipeline Safety Act. The NGPSA regulates safety requirements in the design, construction, operation

and maintenance of natural gas pipeline facilities, while the PSIA establishes mandatory inspections for all U.S. oil and natural gas transmission pipelines

in high-consequence areas. Additionally, certain states, such as West Virginia, also maintain jurisdiction over intrastate natural gas lines. In October

2019, PHMSA finalized the first of three rules that, collectively, are referred to as the natural gas “Mega Rule.” The first rule imposed additional safety

requirements on natural gas transmission pipelines, including maximum operating pressure and integrity management near HCAs for onshore gas

transmission pipelines. PHMSA finalized the second rule extending federal safety requirements to onshore gas gathering pipelines with large diameters

and high operating pressures in November 2021. PHMSA published the final of the three components of the Mega Rule in August 2022, which took

effect in May 2023. The final rule applies to onshore gas transmission pipelines, clarifies integrity management regulations, expands corrosion control

requirements, mandates inspection after extreme weather events, and updates existing repair criteria for both HCA and non-HCA pipelines.

Finally, on January 17, 2025, PHMSA published the final rule instituting more stringent gas pipeline leak detection and repair requirements, performance

standards for advanced leak detection programs, methane emission mitigation requirements, pressure control design and maintenance requirements,

reporting and recordkeeping. This forthcoming final rule is to be effective 180 days from formal publishing in the Federal Register. On January 20, 2025

the Trump Administration issued an Executive Order, Regulatory Freeze Pending Review, which withdrew all rules which had been sent to the Office of

the Federal Register but not yet published, so they could be reviewed and approved. This PHMSA final rule has yet to be published in the Federal

Register. The adoption of laws or regulations that apply more comprehensive or stringent safety standards can increase the expenses we incur for

gathering service.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Resource Conservation and Recovery Act

The Federal Resource Conservation and Recovery Act (“RCRA”) and corresponding state laws and regulations impose requirements for the management,

treatment, storage and disposal of hazardous and non-hazardous wastes, including wastes generated by our operations. Drilling fluids, produced waters

and most of the other wastes associated with the exploration, development and production of natural gas and oil are currently regulated under RCRA’s

solid (non-hazardous) waste provisions. However, legislation has been proposed from time to time, and various environmental groups have filed lawsuits

that, if successful, could result in the reclassification of certain natural gas and oil exploration and production wastes as “hazardous wastes,” which

would make such wastes subject to much more stringent handling, disposal and clean-up requirements. A change in the RCRA exclusion for drilling

fluids, produced waters and related wastes could result in an increase in our costs to manage and dispose of generated wastes, which could have a

material adverse effect on the industry as well as on our results of operations and financial position.

Comprehensive Environmental Response, Compensation, and Liability Act

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”) imposes joint and several liability for costs of

investigation and remediation, and for natural resource damages without regard to fault or the legality of the original conduct, on certain classes of

persons with respect to the release into the environment of substances designated under CERCLA as hazardous substances. These classes of persons,

called potentially responsible parties (“PRP”), include the current and past owners or operators of a site where the release occurred and anyone who

disposed, transported, or arranged for the disposal, transportation, or treatment of a hazardous substance found at the site. CERCLA also authorizes the

EPA and, in some instances, third parties to take actions in response to threats to public health or the environment, and to seek to recover from PRPs

for the costs of such action. Many states, including states in which we operate, have adopted comparable state statutes.

Although CERCLA generally exempts “petroleum” from regulation, in the course of our operations we have generated and will generate wastes that may

fall within CERCLA’s definition of hazardous substances, and may have disposed of these wastes at disposal sites owned and operated by others. We

may also be the owner or operator of sites on which hazardous substances have been released. In the event contamination is discovered at a site on

which we are or have been an owner or operator, or to which we have sent hazardous substances, we could be jointly and severally liable for the costs

of investigation and remediation, and for natural resource damages. Further, it is not uncommon for neighboring landowners and other third parties to

file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment.

Oil Pollution Act

The primary federal law related to oil spill liability is the Oil Pollution Act (“OPA”), which amends and augments oil spill provisions of the CWA and

imposes certain duties and liabilities on certain “responsible parties” related to the prevention of oil spills and damages resulting from such spills in or

threatening waters of the United States or adjoining shorelines. A liable “responsible party” includes the owner or operator of a facility, vessel or pipeline

that is a source of an oil discharge or that poses the substantial threat of discharge. The OPA assigns joint and several liability, without regard to fault,

to each responsible party for oil removal costs and a variety of public and private damages. Although defenses exist to the liability imposed by the OPA,

they are limited. In the event of an oil discharge or substantial threat of discharge, we may be liable for costs and damages.

Regulation of the Sale and Transportation of Natural Gas, NGLs and Oil

The transportation and sale, or resale, of natural gas in interstate commerce are regulated by the Federal Energy Regulatory Commission (“FERC”)

under the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, and regulations issued under those statutes. FERC regulates interstate natural

gas transportation rates, and the terms and conditions of service, which affects the marketing of natural gas that we produce, as well as the revenues

we receive for sales of our natural gas. FERC regulations require that rates, terms and conditions of service for interstate service pipelines that transport

crude oil and refined products and certain other liquids be just and reasonable and must not be unduly discriminatory or confer any undue preference

upon any shipper. FERC regulations also require interstate common carrier petroleum pipelines to file with FERC and publicly post tariffs stating their

interstate transportation rates, terms and conditions of service.

Section 1(b) of the Natural Gas Act exempts from regulation by FERC facilities used for the production and gathering of natural gas. However, the

distinction between federally unregulated gathering facilities and FERC regulated transmission facilities is a fact-based determination, and the

classification of facilities has recently been the subject of regulatory dispute. We own certain natural gas pipeline facilities that we believe meet the

traditional tests FERC has used to establish a pipeline’s primary function as “gathering,” thus exempting it from the jurisdiction of FERC under the

Natural Gas Act.

Intrastate natural gas transportation is also subject to regulation by state regulatory agencies. The basis for intrastate regulation of natural gas

transportation and the degree of regulatory oversight and scrutiny given to intrastate natural gas pipeline rates and services varies from state to state.

Like the regulation of interstate transportation rates, the regulation of intrastate transportation rates affects the marketing of natural gas that we

produce, as well as the revenues we receive for sales of our natural gas.

FERC regulates the rates and terms and conditions of service for transportation of oil and NGLs on interstate pipelines under the provisions of the

Interstate Commerce Act, the Energy Policy Act of 1992 and amendments to and regulations issued under those statutes. Intrastate transportation of

oil, NGLs and other products is dependent on pipelines whose rates, terms and conditions of service are subject to regulation by state regulatory bodies

under state statutes.

The price of natural gas, NGLs, and crude oil are currently not directly regulated, but Congress historically has been active in the area of natural gas,

NGLs and crude oil regulation. We cannot predict whether new legislation to regulate sales might be enacted in the future or what effect, if any, any

such legislation might have on our operations.

Health and Safety Laws

Our operations are subject to regulation under the federal Occupational Safety and Health Act (“OSHA”) and comparable state laws in some states, all of

which regulate health and safety of employees at our operations. Additionally, OSHA’s hazardous communication standard, the EPA community right-to-

know regulations under Title III of the federal Superfund Amendment and Reauthorization Act, and comparable state laws require that information be

maintained about hazardous materials used or produced by our operations and that this information be provided to employees, state and local

governments and the public.

Emissions Laws and Regulations

There are a number of proposed and recently-enacted laws and regulations at the international, federal, state, regional and local level that seek to limit

or require disclosure regarding greenhouse gas emissions and climate-related matters. Such laws and regulations could increase our costs, including

requirements that necessitate the installation of new equipment or the purchase of emission allowances. These laws and regulations could also impact

our customers, including the electric generation industry, making alternative sources of energy more competitive and thereby decreasing demand for


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

the natural gas and oil we produce. Additional regulation could also lead to permitting delays and additional monitoring and administrative requirements,

in turn impacting electricity generating operations.

At the international level, the UN-sponsored “Paris Agreement,” for nations to limit their greenhouse gas emissions through non-binding, individually-

determined reduction goals every five years after 2020. In November 2021, the international community gathered in Glasgow at the 26th Conference of

the Parties to the UN Framework Convention on Climate Change, during which multiple announcements were made, including a call for parties to

eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide greenhouse gases. In a related gesture, the United States and the

European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution by at least 30% by 2030

relative to 2020 levels, including “all feasible reductions” in the energy sector. Such commitments were re-affirmed at the 27th Conference of the Parties

in Sharm El Sheikh. However, the United States indicated in January 2025 it will withdraw from the Paris Agreement, and changes undertaken by the

new U.S. Presidential Administration have or may in the future reverse or rescind climate-related initiatives and regulations adopted by prior

administrations and focus on driving increased U.S. energy production. Although it is not possible at this time to predict how legislation or new

regulations that may be adopted pursuant to the Paris Agreement to address greenhouse gas emissions would impact our business, any such future

laws and regulations imposing reporting obligations on, or limiting emissions of greenhouse gases from, our equipment and operations could require us

to incur costs to implement such measures associated with our operations.

In addition, activists concerned about the potential effects of climate change have directed their attention at sources of funding for energy companies,

which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in natural gas and oil

activities. Ultimately, this could make it more difficult to secure funding for exploration and production activities. Litigation risks are also increasing, as a

number of cities and other local governments have sought to bring suits against the largest oil and natural gas exploration and production companies in

state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to global climate

change effects, such as rising sea levels, and therefore are responsible for roadway and infrastructure damages, or alleging that the companies have

been aware of the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts.

Sustainability Review

We are committed to addressing key environmental issues from our operations, as well as relevant social issues for the people across our operations,

while upholding the values and principles upon which we were founded. We adhere to high operating standards with a strong focus on environmental

protection, employee health and safety, and positive community engagement.

We proudly accept the responsibility and privilege of being part of the solution to the significant challenges of our nation’s energy, environment, and

economic security. By providing a reliable supply of abundant domestic energy from assets with a smaller environmental footprint than newly drilled

wells, we support our nation’s energy security. We invest in and implement measures to reduce emissions at our facilities, produce differentiated natural

gas through industry-recognized emissions detection, measurement, and mitigation processes, and retire orphan wells for several states, contributing to

environmental best practices. Additionally, we provide affordable and sustainable domestic energy, direct and indirect employment, mineral royalties,

and support tax revenues for the communities where we operate, contributing to economic prosperity, opportunity, and security.

We invite you to explore our annual Sustainability Report, typically released in the second calendar quarter, to gain insights into our actions aimed at

identifying, improving, and monitoring our sustainability efforts focused on planet, people, and principles. Our Sustainability Reports are available on our

website at www.div.energy.

Incentivizing Performance

Our commitment to climate and business resiliency is reflected, in part, in our compensation plans for executives and senior leaders. Depending on their

respective roles in the Group, these leaders have a proportion of their variable pay each year tied to the delivery of sustainability and climate-related

targets.

The Board and its Remuneration Committee annually review the appropriateness of the measures incorporated into the Executive Director’s annual

bonus plan and have consistently increased the non-financial sustainability-related component within the plan. For the year ended 2024, this component

represented 30% of the total eligible bonus, including a 15% environmental component directly related to methane intensity reductions and pneumatic

valve replacements. This plan and its results are audited annually.

Since 2022, 20% of the Executive Director’s long-term incentive plan (“LTIP”) also has been tied to non-financial climate targets. Audited annually, the

LTIP contains a three-year vesting period with 20% of the incentive specifically tied to tactical methods to achieve additional methane intensity

reductions in our climate journey.

For the Executive Director in the 2025 calendar year, the annual bonus and LTIP percentages tied to non-financial sustainability-related performance

remain at 25% and 20%, respectively.

Similar short- and long-term climate-related incentive compensation metrics are also applicable to members of senior leadership who play an active role

in executing the Group’s tactical emission reduction plans as well as executing other operational and environmental stewardship initiatives.

For more information on the performance conditions attached to executive remuneration incentive arrangements, refer to the Remuneration

Committee's Report within this Annual Report & Form 20-F.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Section 172 Companies Act Statement

In compliance with sections 172 (‘Section 172”) and 414CZA of the UK Companies Act, the Board makes the following statement in relation to the year

ended December 31, 2024:

Our stakeholders are the many individuals and organizations that are affected by or interact with our operations and with whom we therefore seek to

proactively and positively engage. We strive to maintain productive, mutually beneficial relationships with each stakeholder group by treating all

stakeholders with fairness and respect and by providing timely and effective information and responses.

We maintain several communication methods that afford two-way engagement with our stakeholder groups, including interactions via face-to-face,

telephone, or email exchange; published company reports, press releases, and investor presentations; industry or conference participation; and other

company engagement.

As the owner and operator of long-life assets, we aim to make decisions that consider both the long-term success of Diversified and value creation for

our stakeholders. Engaging with our stakeholders informs our decision-making, including consideration of our long-term strategic objectives and the

activities that support these aims, such as merger and acquisition diligence and the management of climate risk.

The following information provides a summary of stakeholder engagements from 2024.

Employees

We know our employees are essential to our success and growth. We recognize the need for a skilled and committed workforce, with a diverse range of

experience and perspectives, and we value the contribution it affords.

Key Areas of Focus

•Incident management

•Employee, driver and process safety

•Employee development

•Workplace culture

Action and Engagement

Our CEO and other executive management periodically conduct town hall meetings and field visits to personally and directly engage with employees and

to provide opportunities for employees to have direct management engagement. Our Board’s Non-Executive Director Employee Representative, Sandra

M. Stash, also periodically engages with the workforce to receive employee feedback on our business strategy, corporate culture and remuneration

policies, and shares this feedback with the Board. The valuable feedback from these meetings, along with that resulting from a periodic corporate-wide

Employee Experience Survey, when applicable, is used to strengthen future employee engagement and initiatives. We also regularly conduct new hire

surveys regarding the onboarding process and exit interviews, both important tools to further improve employee experiences.

In 2024, our CEO, accompanied by members of the executive and senior management teams, visited several locations across our operating footprint,

conducting town hall meetings with some 60% of total employees and presenting updates on strategic operational and financial company initiatives. To

better support our employees, we expanded our family-focused programs to include an Employee Adoption Program, which provides financial assistance

and maternal or paternal leave for the adoption process, and further continued our focus on mental and physical well-being through health and fitness

challenges and educational webinars.

Communities

We actively support sustainable socio-economic development in the communities in which we live and work and aim to minimize any potential negative

impacts from our operations. Community engagement includes developing and maintaining trusted relationships with our land and mineral owners with

the recognition that these relationships are key to our acquisitive business strategy and ability to achieve our operational goals. From personal and

socio-economic investment to strategic academic and educational support, our employees engage and serve their local communities through effective

partnerships that make a real difference.

Key Areas of Focus

•Incident management

•Effective grievance mechanisms

•Environmental protection

•Royalty payments

•Socio-economic investment and outreach

•Local hiring

Action and Engagement

Through our formalized Community Giving and Engagement Program and other corporate initiatives throughout our operating footprint, in 2024 we

provided approximately $2.1 million in financial support to numerous organizations, including adult and children’s health and well-being programs, local

food banks, secondary and higher educational programs and initiatives, student athlete-related ventures and engagements, and municipal services. We

were especially pleased to support children’s initiatives which included, for the fourth consecutive year, distributing $205,000 worth of winter coats to

more than 2,700 children in nine schools through Operation Warm. We also supported 12 different foster care organizations and provided meals for the

associated families and workers within these organizations.

Our employees responded to more than 33,000 inquiries from our royalty and surface owners through our corporate call center. We also distributed

approximately $167 million in royalty payments to more than 84,000 royalty owners in 2024.

Equity and Debt Investors

We actively engage with our capital market partners, financial institutions and rating agencies to support a full understanding of our business and

progress against our strategic priorities.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Key Areas of Focus

•Emissions reductions

•Climate risk and energy transition

•Incident management

•Risk management

•Corporate Governance

•Financial stability

•Access to funding

Action and Engagement

We regularly provide financial, operational and other sustainability performance updates to our equity and debt investors. These updates may be in the

form of investor relations presentations, press releases, website updates, or direct calls and meetings, inclusive of the CEO, CFO, SVP-Investor

Relations, SVP-Sustainability, SVP-EHS and/or Board Chairman, as applicable. The Annual General Meeting (“AGM”) also provides an opportunity for

shareholders to engage with the Board and Executive Management.

Our increasing participation in energy conferences, industry events and non-deal roadshows has provided added opportunities for discussions with

current and potential Credit Facility lenders and ABS investors particularly interested in our sustainability and emissions reductions strategies, activities

and results. Reflective of that interest by ABS investors and our commitment to climate and operating targets, certain of our ABS transactions, as well as

our sustainability-linked Credit Facility, have included interest rate impacts tied to certain of these sustainability targets.

Governments

We seek to develop and maintain positive relationships and regular dialogue with various stakeholder groups within our federal, state and local

governments.

Key Areas of Focus

•Legal compliance

•Tax payments to governments

•Safe and efficient asset retirement

•Emissions reductions

•Risk management

•Environmental protection

Action and Engagement

Executive and operational management engage with federal, state and local regulators to address legislative, regulatory and operational matters

important to our company and our industry. With risk identification and protection of the local environment and biodiversity in mind, we proactively

engage applicable regulatory agencies before commencing a project to foster transparent dialogue during the completion and approval of applicable

environmental assessments and related actions.

We seek to keep regulatory agencies appraised of our operational and well retirement activities and to provide objective and measurable progress

indicators. Our Next LVL Energy well retirement subsidiary supports company efforts to exceed annual state plugging requirements and well retirement

needs of other oil and gas operators in the Appalachia Region as well as the individual states in their respective federal orphan well retirement

programs.

Customers

We believe hydrocarbon production is, and will continue to be, essential to supporting modern human life. Therefore, we work hard to deliver

environmentally-focused, responsibly produced natural gas, NGLs and oil that satisfy regulatory requirements and meet the energy demands of our local

communities and customers while supporting our climate goals.

Key Areas of Focus

•Incident management

•Process safety

•Access to funding

Action and Engagement

We delivered 791 MMcfepd in 2024 with no cited process and pipeline safety events or associated civil penalties. We continue to use our

pipeline awareness programs to provide relevant information and education to those who interact with our assets or employees.

Business Partners

We aim to establish mutually beneficial relationships with our business partners. As operator, we work on behalf of our joint operating partners to safely

and efficiently manage the assets and deliver our products. Further, we strive to develop strong relationships with our contractors and suppliers that are

built on trust, transparency and quality products and services.

Key Areas of Focus

•Access to funding

•Risk management

•Employee and process safety

•Accident prevention

•Procurement management


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Action and Engagement

We fulfill our responsibility as operator by responsibly managing the wells, ensuring payment of related expenses, and distributing to our joint interest

partners the applicable revenues and royalties from the wells’ commodity sales.

We use local contractors and suppliers in each of the states in which we conduct our operations. We engage the expertise and capability of a leading

supply chain risk management firm to continuously screen and monitor contractor safety performance and compliance through stringent operating

guidelines. With a network of approximately 700 contractors, this real-time monitoring helps to ensure our contractors are providing us with the

necessary product and service quality to meet the expectations of our stakeholders and supports ongoing agreements with those contractors who satisfy

our safety thresholds.

Financial Review

Operating Results

Key Factors Affecting Our Performance

Our financial condition and results of operations have been, and will continue to be, affected by a number of important factors, including the following:

Strategic Acquisitions

We have made, and will continue to make, strategic acquisitions to strengthen our current market presence and expand into new markets. We have

made the following business combinations or asset acquisitions for a total aggregate consideration of $939 million during the years ended December 31,

2024, 2023 and 2022, comprised of:

•October 2024: The East Texas II Acquisition, in which we acquired certain upstream assets and related infrastructure in the Central Region;

•August 2024: The Crescent Pass Acquisition, in which we acquired certain upstream assets and related infrastructure in the Central Region;

•June 2024: The Oaktree Acquisition, in which we acquired Oaktree’s proportionate working interest in the East Texas, Tapstone, Tanos and Indigo

acquisitions;

•March 2023: The Tanos II Assets Acquisition, in which we acquired certain upstream assets and related infrastructure in the Central Region;

•September 2022: The ConocoPhillips Assets Acquisition, in which we acquired certain upstream assets and related gathering infrastructure in the

Central Region;

•July 2022: Certain plugging infrastructure in the Appalachian Region;

•May 2022: Certain plugging infrastructure in the Appalachian Region;

•April 2022:

•The East Texas I Acquisition, in which we acquired working interests in certain upstream assets and related facilities within the Central Region

from a private seller, in conjunction with Oaktree;

•Certain midstream assets, inclusive of a processing facility, in the Central Region that was contiguous to our East Texas I assets; and

•February 2022: Certain plugging infrastructure in the Appalachian Region.

Our strategic acquisitions may impact the comparability of our financial results across different periods. We plan to continue selectively pursuing

acquisitions to continue to produce reliable free cash flow for our shareholders. We will evaluate and execute opportunities that complement and scale

our business, optimize profitability, expand into adjacent markets, and add new capabilities.

Recent Developments

•In March 2025, the Group announced the completion of its previously announced Maverick acquisition for a gross purchase price of approximately

$1,275 million. The transaction was funded through the assumption of approximately $700 million of Maverick debt outstanding, the issuance of

21,194,213 new ordinary shares direct to the unitholders of Maverick, and approximately $207 million in cash on hand.

•In March 2025, in connection with the close of the Maverick acquisition, the Group amended and restated the credit agreement governing its Credit

Facility. The amendment extended the maturity of the Credit Facility to March 2029 and increased the borrowing base to $900 million, primarily

resulting from the additional collateral acquired from Maverick. There were no other material changes to pricing or terms. The Group utilized the

proceeds from the upsized borrowing base to fund a portion of the Maverick acquisition and repay the outstanding principal on Term Loan II.

•In February 2025, the Group formed Diversified ABS Phase X LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS X”), to

issue asset-backed securities with a total principal amount of $530 million at par value (“the ABS X Notes”). The Group utilized the proceeds from

the ABS X Notes to refinance the ABS I Notes, ABS II Notes, and Term Loan I, and to fund the Summit Natural Resources (“Summit”) transaction.

•In February 2025, the Group announced the completion of its previously announced acquisition of certain upstream assets and related

infrastructure within Virginia, West Virginia, and Alabama of the Appalachian Region from Summit for a gross purchase price of approximately $45

million before customary purchase price adjustments. The transaction was funded through the new ABS X Notes collateralized, in part, by the

acquired assets.

•In February 2025, the Company issued 8,500,000 new ordinary shares at $14.50 per share to raise gross proceeds of $123 million. In addition, the

Company has granted the underwriters a 30-day option to purchase up to an additional 850,000 ordinary shares at the public offering price, less

underwriting discount. The Group used the net proceeds to repay a portion of the debt to be incurred in connection with the Maverick transaction.

Refer to Notes 5, 16, and 21 in the Notes to the Group Financial Statements for additional information regarding acquisitions, share capital, and debt.

Segment Reporting

Our operations consist of one reportable segment in the United States under IFRS 8. Refer to Note 2 in the Notes to the Group Financial Statements for

a description of our segment reporting.

Results of Operations

Refer to APMs within this Annual Report & Form 20-F for information on how certain of the metrics below are calculated and reconciled to IFRS

measures. Discussion related to prior period results can be found in the Results of Operations section of our 2023 Annual Report & Form 20-F on our

website at www.div.energy.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report


	Year Ended
	December 31, 2024	December 31, 2023	Change	% Change
Net production
Natural gas (MMcf)	244,298	256,378	(12,080)	(5%)
NGLs (MBbls)	5,980	5,832	148	3%
Oil (MBbls)	1,568	1,377	191	14%
Total production (MMcfe)	289,586	299,632	(10,046)	(3%)
Average daily production (MMcfepd)	791	821	(30)	(4%)
% Natural gas (Mcfe basis)	84%	86%
Average realized sales price (excluding impact of derivatives settled in cash)
Natural gas (Mcf)	$1.90	$2.17	$(0.27)	(12%)
NGLs (Bbls)	25.17	24.23	0.94	4%
Oil (Bbls)	74.71	75.46	(0.75)	(1%)
Total (Mcfe)	$2.53	$2.68	$(0.15)	(6%)
Average realized sales price (including impact of derivatives settled in cash)
Natural gas (Mcf)	$2.57	$2.86	$(0.29)	(10%)
NGLs (Bbls)	24.32	26.05	(1.73)	(7%)
Oil (Bbls)	69.54	68.44	1.10	2%
Total (Mcfe)	$3.05	$3.27	$(0.22)	(7%)
Revenue (in thousands)
Natural gas	$464,600	$557,167	$(92,567)	(17%)
NGLs	150,513	141,321	9,192	7%
Oil	117,146	103,911	13,235	13%
Total commodity revenue	$732,259	$802,399	$(70,140)	(9%)
Midstream revenue	32,535	30,565	1,970	6%
Other revenue	30,047	35,299	(5,252)	(15%)
Total revenue	$794,841	$868,263	$(73,422)	(8%)
Gain (loss) on derivative settlements (in thousands)
Natural gas	$164,452	$177,139	$(12,687)	(7%)
NGLs	(5,055)	10,594	(15,649)	(148%)
Oil	(8,108)	(9,669)	1,561	(16%)
Net gain (loss) on commodity derivative settlements(a)	$151,289	$178,064	$(26,775)	(15%)
Total revenue, inclusive of settled hedges	$946,130	$1,046,327	$(100,197)	(10%)


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report


	Year Ended
	December 31, 2024	December 31, 2023	Change	% Change
Per Mcfe Metrics
Average realized sales price
(including impact of derivatives settled in cash)	$3.05	$3.27	$(0.22)	(7%)
Midstream and other revenue	0.22	0.22	—	—%
LOE	(0.80)	(0.71)	(0.09)	13%
Midstream operating expense	(0.24)	(0.23)	(0.01)	4%
Employees, administrative costs and professional services	(0.30)	(0.26)	(0.04)	15%
Recurring allowance for credit losses	—	(0.03)	0.03	(100%)
Production taxes	(0.12)	(0.21)	0.09	(43%)
Transportation expense	(0.31)	(0.32)	0.01	(3%)
Proceeds received from leasehold sales(b)	0.14	0.09	0.05	56%
Adjusted EBITDA per Mcfe	$1.64	$1.82	$(0.18)	(10%)
Adjusted EBITDA margin	50%	52%
Other financial metrics (in thousands)
Operating profit (loss)	$(43,026)	$1,161,051	$(1,204,077)	(104%)
Net income (loss)	$(87,001)	$759,701	$(846,702)	(111%)
Adjusted EBITDA	$472,309	$546,788	$(74,479)	(14%)

(a)Net gain (loss) on commodity derivative settlements represents cash (paid) or received on commodity derivative contracts. This excludes settlements on foreign

currency and interest rate derivatives as well as the gain (loss) on fair value adjustments for unsettled financial instruments for each of the periods presented.

(b)Proceeds received from leasehold sales consists of $27 million, $24 million and $2 million in cash proceeds received for leasehold sales during the years ended

December 31, 2024, 2023 and 2022, respectively, less $14 million and $4 million of basis in leasehold sales for the years ended December 31, 2024 and 2023,

respectively.

Forward-Looking Statements

This Annual Report & Form 20-F contains forward-looking statements that can be identified by the following terminology, including the terms “may,”

“might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,”

“contemplate,” “possible,” or the negative of these terms or other variations or comparable terminology, or by discussions of strategy, plans, objectives,

goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places

throughout this Annual Report & Form 20-F and include, but are not limited to, statements regarding our intentions, beliefs or current expectations

concerning, among other things, our results of operations, financial positions, liquidity, prospects, growth, strategies and the natural gas and oil

industry. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.

Forward-looking statements are not guarantees of future performance and the actual results of our operations, financial position and liquidity, and the

development of the markets and the industry in which we operate, may differ materially from those described in, or suggested by, the forward-looking

statements contained in this Annual Report & Form 20-F. In addition, even if the results of operations, financial position and liquidity, and the

development of the markets and the industry in which we operate are consistent with the forward-looking statements contained in this Annual Report &

Form 20-F, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause

results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general

economic and business conditions, the behavior of other market participants, industry trends, competition, commodity prices, changes in regulation,

currency fluctuations, our ability to recover our reserves, our ability to successfully integrate acquisitions, our ability to obtain financing to meet liquidity

needs, changes in our business strategy, political and economic uncertainty.

Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this Annual Report & Form 20-F

speak only as of the date of this Annual Report & Form 20-F, reflect our current view with respect to future events and are subject to risks relating to

future events and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. Investors

should specifically consider the factors identified in this Annual Report & Form 20-F which could cause actual results to differ before making an

investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules or applicable

law, we explicitly disclaim any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this Annual

Report & Form 20-F that may occur due to any change in our expectations or to reflect events or circumstances after the date of this Annual Report &

Form 20-F.

Production, Revenue & Hedging

Total revenue in the year ended December 31, 2024 of $795 million decreased 8% from $868 million reported for the year ended December 31, 2023,

primarily due to a 6% decrease in the average realized sales price, excluding the impact of derivatives settled in cash, and 3% lower production which

was primarily related to the sale of equity interest in DP Lion Equity Holdco in December 2023 along with normal declines. This decrease was partially

offset by increased production as a result of the Oaktree, Crescent Pass, and East Texas II acquisitions in 2024. Including commodity hedge settlement

gains of $151 million and $178 million in 2024 and 2023, respectively, total revenue, inclusive of settled hedges, decreased by 10% to $946 million in

2024 from $1,046 million in 2023.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

The following table summarizes average commodity prices for the periods presented with Henry Hub on a per Mcf basis and Mont Belvieu and WTI on a

per Bbl basis:


	Year Ended
	December 31, 2024	December 31, 2023	$ Change	% Change
Henry Hub	$2.27	$2.74	$(0.47)	(17%)
Mont Belvieu	38.16	34.11	4.05	12%
WTI	75.72	77.62	(1.90)	(2%)

Commodity Revenue

The following table reconciles the change in commodity revenue (excluding the impact of hedges settled in cash) by reflecting the effect of changes in

volume and in the underlying prices:


(In thousands)	Natural Gas	NGLs	Oil	Total
Commodity revenue for the year ended December 31, 2022	$1,544,658	$188,733	$139,620	$1,873,011
Volume increase (decrease)	4,717	22,935	(15,903)	11,749
Price increase (decrease)	(992,208)	(70,347)	(19,806)	(1,082,361)
Net increase (decrease)	(987,491)	(47,412)	(35,709)	(1,070,612)
Commodity revenue for the year ended December 31, 2023	$557,167	$141,321	$103,911	$802,399
Volume increase (decrease)	(26,214)	3,586	14,413	(8,215)
Price increase (decrease)	(66,353)	5,606	(1,178)	(61,925)
Net increase (decrease)	(92,567)	9,192	13,235	(70,140)
Commodity revenue for the year ended December 31, 2024	$464,600	$150,513	$117,146	$732,259

To manage our cash flows in a volatile commodity price environment and as required by our SPV-level asset-backed securities, we utilize derivative

hedging contracts that allow us to fix the per unit sales prices for our production. As of December 31, 2024, approximately 86% of our production was

fixed through derivative hedging contracts over the next twelve months. The tables below set forth the commodity hedge impact on commodity

revenue, excluding and including cash received for commodity hedge settlements:


(In thousands, except per unit data)	Year Ended December 31, 2024
	Natural Gas		NGLs		Oil		Total Commodity
	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
	Revenue	per Mcf	Revenue	per Bbl	Revenue	per Bbl	Revenue	per Mcfe
Excluding hedge impact	$464,600	$1.90	$150,513	$25.17	$117,146	$74.71	$732,259	$2.53
Commodity hedge impact	164,452	0.67	(5,055)	(0.85)	(8,108)	(5.17)	151,289	0.52
Including hedge impact	$629,052	$2.57	$145,458	$24.32	$109,038	$69.54	$883,548	$3.05


(In thousands, except per unit data)	Year Ended December 31, 2023
	Natural Gas		NGLs		Oil		Total Commodity
	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
	Revenue	per Mcf	Revenue	per Bbl	Revenue	per Bbl	Revenue	per Mcfe
Excluding hedge impact	$557,167	$2.17	$141,321	$24.23	$103,911	$75.46	$802,399	$2.68
Commodity hedge impact	177,139	0.69	10,594	1.82	(9,669)	(7.02)	178,064	0.59
Including hedge impact	$734,306	$2.86	$151,915	$26.05	$94,242	$68.44	$980,463	$3.27

Refer to Note 13 in the Notes to the Group Financial Statements for additional information regarding derivative financial instruments.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Expenses


(In thousands, except per unit data)	Year Ended
	December 31, 2024		December 31, 2023		Total Change		Per Mcfe Change
	December 31, 2024	Per Mcfe	December 31, 2023	Per Mcfe	$	%	$	%
LOE(a)	$231,651	$0.80	$213,078	$0.71	$18,573	9%	$0.09	13%
Production taxes(b)	36,043	0.12	61,474	0.21	(25,431)	(41%)	(0.09)	(43%)
Midstream operating expenses(c)	70,747	0.24	69,792	0.23	955	1%	0.01	4%
Transportation expenses(d)	90,461	0.31	96,218	0.32	(5,757)	(6%)	(0.01)	(3%)
Total operating expenses	$428,902	$1.47	$440,562	$1.47	$(11,660)	(3%)	$—	—%
Employees, administrative costs and professional services(e)	86,885	0.30	78,659	0.26	8,226	10%	0.04	15%
Costs associated with acquisitions(f)	11,573	0.04	16,775	0.06	(5,202)	(31%)	(0.02)	(33%)
Other adjusting costs(g)	22,375	0.08	17,794	0.06	4,581	26%	0.02	33%
Non-cash equity compensation(h)	8,286	0.03	6,494	0.02	1,792	28%	0.01	50%
Total operating and G&A expenses	$558,021	$1.92	$560,284	$1.87	$(2,263)	—%	$0.05	3%
Depreciation, depletion and amortization	256,484	0.89	224,546	0.75	31,938	14%	0.14	19%
Allowance for credit losses(i)	101	—	8,478	0.03	(8,377)	(99%)	(0.03)	(100%)
Total expenses	$814,606	$2.81	$793,308	$2.65	$21,298	3%	$0.16	6%

(a)LOE encompasses costs incurred to maintain producing properties. These costs include direct and contract labor, repairs and maintenance, emissions reduction

initiatives, water hauling, compression, automobile, insurance, and materials and supplies expenses.

(b)Production taxes consist of severance and property taxes. Severance taxes are typically paid on produced natural gas, NGLs and oil at fixed rates set by federal, state or

local taxing authorities. Property taxes are generally based on the valuation of the Group’s natural gas and oil properties and midstream assets by the taxing

jurisdictions.

(c)Midstream operating expenses are the daily costs of operating the Group’s owned midstream assets, including employee and benefit expenses.

(d)Transportation expenses are the daily costs incurred from third-party systems to gather, process, and transport the Group’s natural gas, NGLs and oil.

(e)Employees, administrative costs and professional services include payroll and benefits for our administrative and corporate staff, costs of maintaining administrative and

corporate offices, managing our production operations, franchise taxes, public company costs, fees for audit and other professional services, and legal compliance.

(f)Costs associated with acquisitions are related to the integration of acquisitions, which vary for each acquisition. For acquisitions classified as business combinations,

these costs include transaction costs directly associated with a successful acquisition. They also encompass costs related to transition service arrangements, where the

Group pays the seller of the acquired entity a fee to manage G&A functions until full integration of the assets. Additionally, these costs include costs to cover expenses

for integrating IT systems, consulting, and internal workforce efforts directly related to incorporating acquisitions into the Group’s systems.

(g)Other adjusting costs include items that affect the comparability of results or are not indicative of ongoing business trends. These costs consist of one-time projects,

contemplated transactions or financing arrangements, contract terminations, deal breakage and/or sourcing costs for acquisitions, and unused firm transportation.

(h)Non-cash equity compensation represents the expense recognition for share-based compensation provided to key members of the management team. Refer to Note 17

in the Notes to the Group Financial Statements for additional details on non-cash share-based compensation.

(i)Allowance for credit losses consists of the recognition and reversal of credit losses. Refer to Note 14 in the Notes to the Group Financial Statements for additional

information regarding credit losses.

Operating Expenses

Per unit operating expense remained flat year-over-year, resulting from:

•Higher per unit LOE that increased 13%, or $0.09 per Mcfe, which is reflective of the Oaktree, Crescent Pass, and East Texas II acquisitions in 2024.

•Lower per unit production taxes that declined 43%, or $0.09 per Mcfe were primarily attributable to a decrease in severance and property taxes as a

result of a decrease in revenue due to lower production and commodity prices, as well as lower valuations for property taxes experienced during the

year;

•Higher per unit midstream operating expense that increased 4%, or $0.01 per Mcfe were primarily attributable to the growth in our midstream

operations due to Central region expansion; and

•Lower per unit transportation expenses that declined 3%, or $0.01 per Mcfe, were primarily related to decreases in commodity price-linked

components of third-party midstream rates and costs.

General and Administrative Expense

G&A expense increased primarily due to:

•Higher employees, administrative costs and professional services resulting in additional cost to support our ongoing growth through acquisitions. On

a per Mcfe basis, these costs increased 15%, or $0.04 per Mcfe;

•Lower costs associated with acquisitions primarily related to a reduction in legal and consulting services incurred in 2024 as compared to 2023. On a

per Mcfe basis, these costs decreased 33% or $0.02 per Mcfe;

•Higher other adjusting costs primarily related to increased costs associated with litigation expense. These costs were partially offset by decreases in

costs related to unused firm transportation and employee severance costs. On a per Mcfe basis, these costs increased 33%, or $0.02 per Mcfe; and


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

•Higher non-cash equity compensation due to an increase in the number of participants in the long-term incentive plan in 2024. On a per Mcfe basis,

these costs increased 50%, or $0.01 per Mcfe.

Other Expenses

Depreciation, depletion and amortization (“DD&A”) increased due to:

•Higher depletion expense as a result of an increase in our DD&A rate, which was partially offset by a 3% decrease in production over the period.

The increase in our DD&A rate was due to the decrease in our estimated proved reserves relative to our depreciable base, driven primarily by

changes in commodity prices year-over-year as well as the sale of equity interest in DP Lion Equity Holdco LLC in December 2023. The proved

reserves decrease was partially offset by the acquisition of the Oaktree, Crescent Pass, and East Texas II assets in 2024.

Allowance for credit losses decreased due to:

•The impact on anticipated credit losses on joint interest owner receivables has a direct relationship with pricing and distributions to individual

owners. As the pricing environment declined in 2023, the underlying well economics did as well, and as a result, in 2023, we increased our reserve

by $8 million. In 2024, with pricing more stable, no such adjustment to the reserve was deemed necessary.

Refer to Notes 5, 10, 11 and 13 in the Notes to the Group Financial Statements for additional information regarding acquisitions, natural gas and oil

properties, property, plant and equipment and derivative financial instruments, respectively.

Derivative Financial Instruments

We recorded the following gain (loss) on derivative financial instruments in the Consolidated Statement of Comprehensive Income for the periods

presented:


(In thousands)	Year Ended
(In thousands)	December 31, 2024	December 31, 2023	$ Change	% Change
Net gain (loss) on commodity derivatives settlements(a)	$151,289	$178,064	$(26,775)	(15%)
Net gain (loss) on interest rate swap(a)	190	(2,722)	2,912	(107%)
Gain (loss) on foreign currency hedges(a)	—	(521)	521	(100%)
Total gain (loss) on settled derivative instruments	$151,479	$174,821	$(23,342)	(13%)
Gain (loss) on fair value adjustments of unsettled financial instruments(b)	(189,030)	905,695	(1,094,725)	(121%)
Total gain (loss) on derivative financial instruments	$(37,551)	$1,080,516	$(1,118,067)	(103%)

(a)Represents the cash settlement of hedges that settled during the period.

(b)Represents the change in fair value of financial instruments net of removing the carrying value of hedges that settled during the period.

For the year ended December 31, 2024, we recognized a loss on derivative financial instruments of $38 million compared to a gain of $1,081 million in

2023. Adjusting our unsettled derivative contracts to their fair values drove a loss of $189 million in 2024, as compared to a gain of $906 million in 2023,

which is reflective of higher commodity prices on the forward curve.

For the year ended December 31, 2024, we recognized a gain on settled derivative instruments of $151 million as compared to a gain of $175 million in

2023. The gain on settled derivative instruments relates to lower commodity market prices than those we secured through our derivative contracts. With

consistent reliable cash flows central to our strategy, we routinely hedge at levels that, based on our operating and overhead costs, provide a significant

adjusted EBITDA margin even if it means forgoing potential price upside.

Refer to Note 13 in the Notes to the Group Financial Statements for additional information regarding derivative financial instruments.

Finance Costs


(In thousands)	Year Ended
(In thousands)	December 31, 2024	December 31, 2023	$ Change	% Change
Interest expense, net of capitalized and income amounts(a)	$120,773	$117,808	$2,965	3%
Amortization of discount and deferred finance costs	16,870	16,358	512	3%
Total finance costs	$137,643	$134,166	$3,477	3%

(a)Includes payments related to borrowings and leases.

For the year ended December 31, 2024, interest expense of $121 million increased by $3 million compared to $118 million in 2023, primarily related to

interest on the new ABS IX Notes, Oaktree Seller’s Note, and Term Loan II. These increases were partially offset by lower outstanding balances on our

existing ABS structures.

As of December 31, 2024 and 2023, total borrowings were $1,736 million and $1,325 million, respectively. For the period ended December 31, 2024,

the weighted average interest rate on borrowings was 7.37% as compared to 6.03% as of December 31, 2023. As of December 31, 2024, 83% of our

borrowings reside in fixed-rate, hedge-protected, amortizing structures compared to 87% as of December 31, 2023.


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Refer to Notes 5, 20, and 21 in the Notes to the Group Financial Statements for additional information regarding acquisitions, leases and borrowings,

respectively.

Taxation

The effective tax rate is calculated on the face of the Statement of Comprehensive Income by dividing the amount of recorded income tax benefit

(expense) by the income (loss) before taxation as follows:


(In thousands)	Year Ended
(In thousands)	December 31, 2024	December 31, 2023	$ Change	% Change
Income (loss) before taxation	$(223,952)	$1,000,344	$(1,224,296)	(122%)
Income tax benefit (expenses)	136,951	(240,643)	377,594	(157%)
Effective tax rate	61.2%	24.1%

The differences between the statutory U.S. federal income tax rate and the effective tax rates are summarized as follows:


	Year Ended
	December 31, 2024	December 31, 2023	December 31, 2022
Expected tax at statutory U.S. federal income tax rate	21.0%	21.0%	21.0%
State income taxes, net of federal tax benefit	3.7%	3.1%	1.2%
Federal credits	41.3%	—%	—%
Other, net	(4.8%)	—%	0.2%
Effective tax rate	61.2%	24.1%	22.4%

For the year ended December 31, 2024, we reported a tax benefit of $137 million, a change of $378 million, compared to expense of $241 million in

2023 which was a result of the change in the loss before taxation and a change in the amount of tax credits generated relative to the pre-tax loss. The

resulting effective tax rates for the years ended December 31, 2024 and 2023 were 61.2% and 24.1%, respectively. The effective tax rate can be

materially impacted by the recognition of the marginal well tax credit available to qualified producers as noted in our 2024 effective tax rate. A marginal

well tax credit was not available for the 2023 tax year. The federal government provides these credits to encourage companies to continue operating

lower-volume wells during periods of low prices to maintain production and the underlying jobs they create and the state and local tax revenues they

generate for communities to support schools, social programs, law enforcement and other similar public services.

Refer to Note 8 in the Notes to the Group Financial Statements for additional information regarding taxation.

Operating Profit, Net Income, Adjusted EBITDA & EPS


(In thousands, except per unit data)	Year Ended
(In thousands, except per unit data)	December 31, 2024	December 31, 2023	$ Change	% Change
Operating profit (loss)	$(43,026)	$1,161,051	$(1,204,077)	(104%)
Net income (loss) attributable to Owners of Diversified Energy Company PLC	(88,272)	758,018	(846,290)	(112%)
Adjusted EBITDA	472,309	546,788	(74,479)	(14%)
Earnings (loss) per share - basic	$(1.84)	$16.07	$(17.91)	(111%)
Earnings (loss) per share - diluted	$(1.84)	$15.95	$(17.79)	(112%)

For the year ended December 31, 2024, we reported a net loss of $88 million and basic and diluted loss per share of $1.84 compared to net income of

$758 million and basic EPS of $16.07 ($15.95 diluted EPS) in 2023, a decrease of 112%. We also reported an operating loss of $43 million compared

with an operating profit of $1,161 million for the years ended December 31, 2024 and 2023, respectively. This year-over-year decrease in net income

was primarily attributable to a $1,118 million decrease in gains on derivatives due to changes in commodity prices on the forward curve, a $24 million

decrease in gains on sale of assets, a decrease in gross profit of $94 million, a $3 million increase in finance costs, partially offset by a $378 million

swing in income tax expense to a benefit as compared to 2023, as a result of marginal well credits.

Excluding the mark-to-market loss on long-dated derivative valuations, as well as other customary adjustments, we reported adjusted EBITDA of $472

million for the year ended December 31, 2024 compared to $547 million for the year ended December 31, 2023, representing a decrease of 14% driven

by a decrease in commodity pricing and production from prior year, primarily as a result of our sale of equity interest in DP Lion Equity Holdco in

December 2023, in addition to normal declines. These decreases were partially offset by adjusted EBITDA growth through the Oaktree, Crescent Pass,

and East Texas II acquisitions in 2024.

Liquidity & Capital Resources

Overview

Our principal sources of liquidity are cash generated from operations and available borrowings under our Credit Facility. To minimize interest expense,

we use our excess cash flow to reduce borrowings on our Credit Facility. Consequently, we have historically maintained low cash balances on our

Consolidated Statement of Financial Position, as evidenced by the $6 million and $4 million in cash and cash equivalents as of December 31, 2024 and

2023, respectively.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

When we acquire assets for growth, we complement our Credit Facility with long-term, fixed rate, fully-amortizing, asset-backed debt secured by certain

natural gas and oil assets. This financing strategy aligns with the long-life nature of our assets, offering us lower borrowing rates and a clear path to

reduce leverage through scheduled principal payments. For larger, value-adding acquisitions, and to maintain an appropriate leverage profile for the

assets we acquire, we also periodically raise funds through secondary equity offerings.

We closely monitor our working capital to ensure it remains sufficient for business operations, using any excess liquidity primarily to repay debt.

Alongside managing working capital, we take a disciplined approach to controlling operating costs and allocating capital resources. This approach

ensures that capital investments generate returns that support our strategic initiatives.

Capital expenditures were $52 million for the year ended December 31, 2024, compared to $74 million for the year ended December 31, 2023. This

decrease was primarily driven by the completion of wells in 2023 that were under development at the time of the March 2023 Tanos II acquisition.

Although we completed additional wells in 2024, the capital expenditures required for their development were less significant than those in 2023.

Additionally, we made improvements at our Black Bear facility in the Central Region in 2024, which contributed to the overall capital expenditure. We

expect to meet our capital expenditure needs for the foreseeable future from our operating cash flows and our existing cash and cash equivalents. Our

future capital requirements will depend on several factors, including our growth rate, commodity prices and future acquisitions.

With respect to our other known current obligations, we believe that our sources of liquidity and capital resources will be sufficient to meet our existing

business needs for at least the next 12 months. However, our ability to satisfy our working capital requirements, debt service obligations and planned

capital expenditures will depend upon our future operating performance, which will be affected by prevailing economic conditions in the natural gas and

oil industry and other financial and business factors, some of which are beyond our control.

Refer to Note 21 in the Notes to the Group Financial Statements for additional information regarding our current debt obligations.

Liquidity

The table below represents our liquidity position as of December 31, 2024 and 2023.


	As of
(In thousands)	December 31, 2024	December 31, 2023
Cash and cash equivalents	$5,990	$3,753
Available borrowings under the Credit Facility(a)	86,690	134,817
Liquidity	$92,680	$138,570

(a)Represents available borrowings under the Credit Facility of $101 million as of December 31, 2024 less outstanding letters of credit of $14 million as of such date.

Represents available borrowings under the Credit Facility of $146 million as of December 31, 2023 less outstanding letters of credit of $11 million as of such date.

Debt

Our net borrowings consisted of the following as of the reporting date:


	As of
(In thousands)	December 31, 2024	December 31, 2023
Total debt	$1,693,242	$1,276,627
LESS: Cash	5,990	3,753
LESS: Restricted cash(a)	46,269	36,252
Net debt	$1,640,983	$1,236,622

(a)The increase of restricted cash as of December 31, 2024, is due to the addition of $21 million and $3 million in restricted cash for the ABS VIII Notes and ABS IX Notes,

respectively, offset by $7 million and $9 million for the retirement of the ABS III Notes and ABS V Notes, respectively.

Our Capital Expenditure Program

The majority of our capital expenditures are directed towards upstream and midstream operations, including pipelines and compression. The remaining

expenditures focus on production optimization, technology, plugging capacity expansion, fleet, reducing emissions, and, when prudent, development

activities aimed at replacing production. Our strategy to acquire and operate mature wells with shallow decline rates allows us to avoid the large capital

expenditures associated with drilling and completion activities of development focused companies.

We actively manage our balance sheet and seek to maintain a long-term leverage ratio of approximately 2.5x. We believe this leverage range is

supported by our differentiated business model, characterized by long-life, low-decline production that ensures resilient cash flows. Our strategic

financial framework, strengthened by hedging and amortizing debt instruments, further supports this leverage target.

Looking ahead, we aim to maximize cash flow by maintaining our hedging strategy and capitalizing on market opportunities to enhance the floor price of

our risk management program. We will preserve our strategic advantages through purposeful growth, supported by a disciplined capital expenditure

program. This approach will ensure we secure low-cost financing for acquisitive growth while maintaining appropriate leverage and sufficient liquidity.

Asset Retirement Obligations

We remain proactive and innovative in our approach to asset retirement. Following our LSE IPO in 2017, we initiated meetings with state officials to

develop a long-term plan for retiring our expanding portfolio of long-life wells. By collaborating with state regulators, we have designed our retirement

activities to be equitable for all stakeholders, with a strong emphasis on environmental responsibility.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Asset retirements for the year ended December 31, 2024 were as follows:


DEC-owned Appalachian well retirements	202
3rd party-owned Appalachian well retirements(a)	85
Total Appalachian wells retired by Next LVL	287
DEC-owned Central Region well retirements	13
Total wells retired	300

(a)Includes 51 state and federal orphan wells and 34 wells for other operators.

We expanded asset retirement operations from 17 rigs at December 31, 2023 to 18 rigs by December 31, 2024. Our continued growth in capacity

enhances our ability to integrate asset retirement operations and achieve cost efficiencies across a broader footprint. Additionally, it enables us to

generate third-party revenues by offering a suite of services to other production companies and state orphan well programs, which can help fund our

own asset retirement program. Consequently, we aim to achieve a prudent mix of cost reduction and third-party revenues to maximize the benefits of

our internal asset retirement program.

Our asset retirement program demonstrates our strong commitment to a healthy environment and the surrounding communities. We anticipate

continued investment and innovation in this area. In 2025, we will focus on realizing the benefits of vertical integration by expanding our internal asset

retirement capacity. This will help us reduce reliance on third-party contractors, mitigate outsource risks, improve process quality and responsiveness,

and enhance control over environmental remediation and costs.

The composition of the provision for asset retirement obligations at the reporting date was as follows for the periods presented:


	Year Ended
(In thousands)	December 31, 2024	December 31, 2023
Balance at beginning of period	$506,648	$457,083
Additions(a)	111,265	3,250
Accretion	30,868	26,926
Asset retirement costs	(6,724)	(5,961)
Disposals(b)	—	(17,300)
Revisions to estimate(c)	6,521	42,650
Balance at end of period	$648,578	$506,648
Less: Current asset retirement obligations	6,436	5,402
Non-current asset retirement obligations	$642,142	$501,246

(a)Refer to Note 5 in the Notes to the Group Financial Statements for additional information regarding acquisitions and divestitures.

(b)Associated with the divestiture of natural gas and oil properties. Refer to Note 5 in the Notes to the Group Financial Statements for additional information.

(c)As of December 31, 2024, we performed normal revisions to our asset retirement obligations, which resulted in a $7 million million increase in the liability. This increase

was comprised of increases of $95 million for cost revisions, which was partially offset by an $89 million decrease attributable to a higher discount rate as a result of an

increase in bond yield volatility during the year. As of December 31, 2023, we performed normal revisions to our asset retirement obligations, which resulted in a $43

million increase in the liability. This increase was comprised of a $28 million increase attributable to a lower discount rate as a result of slightly decreased bond yields as

compared to 2022 as inflation began to increase at a lower rate and $16 million in cost revisions. Partially offsetting these decreases was a $1 million change attributed

to timing.

The anticipated future cash outflows for our asset retirement obligations on an undiscounted and discounted basis are set forth in the tables below as of

December 31, 2024 and 2023. When discounting the obligation, we apply annual inflationary cost increases to our current cost expectations and then

discount the resulting cash flows using a credit adjusted risk free discount rate resulting in a net discount rate of 3.7% and 3.4% for the periods

indicated, respectively. While the rate is comparatively small to the commonly utilized PV-10 metric in our industry, the impact is significant due to the

long-life low-decline nature of our portfolio. Although productive life varies within our well portfolio, presently we expect all of our existing wells to have

reached the end of their productive lives and be retired by approximately 2098.

When evaluating our ability to meet our asset retirement obligations we review reserves models which utilize the income approach to determine the

expected discounted future net cash flows from estimated reserve quantities. These models determine future revenues associated with production using

forward pricing then consider the costs to produce and develop reserves, as well as the cost of asset retirement at the end of a well’s life. These future

net cash flows are discounted using a weighted average cost of capital of 10% to produce the PV-10 of our reserves. After considering the asset

retirement costs in these models, our PV-10 was approximately $1.6 billion, $2.1 billion and $8.8 billion as of December 31, 2024, 2023 and 2022,

respectively.

As of December 31, 2024:


(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years
(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years	Total
Undiscounted	$6,436	$27,913	$2,432,934	$2,467,283
Discounted	6,436	24,450	617,692	648,578


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

As of December 31, 2023:


(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years
(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years	Total
Undiscounted	$5,402	$20,365	$1,778,876	$1,804,643
Discounted	5,402	17,975	483,271	506,648

Cash Flows

Our principal sources of liquidity have historically been cash generated from operating activities. To minimize financing costs, we apply our excess cash

flow to reduce borrowings on our Credit Facility.

We monitor our working capital to ensure that the levels remain adequate to operate the business with excess cash primarily being utilized for the

repayment of debt or shareholder distributions. In addition to working capital management, we have a disciplined approach to managing operating costs

and allocating capital resources, ensuring that we are generating returns on our capital investments to support the strategic initiatives in our

business operations.


(In thousands)	Year Ended
(In thousands)	December 31, 2024	December 31, 2023	$ Change	% Change
Net cash provided by operating activities	$345,663	$410,132	$(64,469)	(16%)
Net cash used in investing activities	(272,916)	(239,369)	(33,547)	14%
Net cash used in financing activities	(70,510)	(174,339)	103,829	(60%)
Net change in cash and cash equivalents	$2,237	$(3,576)	$5,813	(163%)

Net Cash Provided by Operating Activities

For the year ended December 31, 2024, net cash provided by operating activities of $346 million decreased by $64 million, or 16%, when compared to

$410 million in 2023. The change in net cash provided by operating activities was predominantly attributable to the following:

•A decrease in net income of $847 million, driven by a decrease in the fair value adjustments of unsettled derivative financial instruments of $1,095

million, and a decrease of $378 million in income tax expense as a result of marginal well credits; and

•Changes in working capital generated reduced cash outflows of $50 million compared to 2023.

Production, realized prices, operating expenses, and G&A are discussed above.

Net Cash Used in Investing Activities

For the year ended December 31, 2024, net cash used in investing activities of $273 million increased by $34 million, or 14%, from outflows of $239

million in 2023. The change in net cash used in investing activities was primarily attributable to the following:

•A net increase in cash outflows of $58 million for acquisition, divestiture and disposal activity. Net cash outflows associated with acquisitions,

divestitures and disposals was $220 million during the year ended December 31, 2024 when compared to $162 million for the year ended

December 31, 2023. Refer to Note 5 and Note 11 in the Notes to the Group Financial Statements for additional information regarding acquisitions,

divestitures and disposals; and

•A decrease in cash outflows of $22 million for capital expenditures. Capital expenditures were $52 million for the year ended December 31, 2024

compared to $74 million for the year ended December 31, 2023. This decrease was primarily driven by the completion of wells in 2023 that were

under development at the time of the March 2023 Tanos II acquisition. Although we completed additional wells in 2024, the capital expenditures

required for their development were less significant than those in 2023. Additionally, we made improvements at our Black Bear facility in the

Central Region in 2024, which contributed to the overall capital expenditure.

Net Cash Used in Financing Activities

For the year ended December 31, 2024, net cash used in financing activities of $71 million decreased by $103 million, or 59%, as compared to $174

million in 2023. This change in net cash used in financing activities was primarily attributable to the following:

•An increase in cash inflows of $202 million related to debt activity. Debt activity resulted in proceeds, or a net cash inflow of $191 million (including

$805 million in repayments of amortizing debt, inclusive of the retirement of ABS III and V Notes and the ABS Warehouse Facility) in 2024 versus

payments, or a net cash outflow, of $11 million in 2023, with much of the change attributable to the issuance of the ABS VIII and IX Notes and the

Term Loan II during 2024, which was partially offset by the retirement of the ABS III and V Notes;

•A decrease of $84 million due to a reduction in dividends paid in 2024 as compared to 2023;

•A decrease of $6 million due to reduced hedge modifications associated with ABS notes in 2024 as compared to 2023;

•An increase of $9 million due to proceeds received as a result of a lease modification for our fleet that was executed in 2024;

•A decrease of $157 million in proceeds from the equity issuance in 2023 that did not occur in 2024;

•An increase of $29 million due to increased finance costs and restricted cash requirements, primarily attributable to the ABS VIII and IX Notes, and

the Oaktree Seller’s Note issued in 2024, partially offset by the retirement of the ABS III and V Notes; and

•An increase of $10 million due to an increase in share repurchases in 2024.

Refer to Notes 16, 18 and 21 in the Notes to the Group Financial Statements for additional information regarding share capital, dividends and

borrowings, respectively.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Off-Balance Sheet Arrangements

We may enter into off-balance sheet arrangements and transactions that give rise to material off-balance sheet obligations. As of December 31, 2024

and December 31, 2023, our material off-balance sheet arrangements and transactions include operating service arrangements of $158 million and $14

million in letters of credit outstanding against our Credit Facility. Refer to Contractual Obligations & Contingent Liabilities & Commitments for additional

information regarding off-balance sheet operating service arrangements.

There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to

materially affect our liquidity or availability of capital resources.

Contractual Obligations & Contingent Liabilities & Commitments

We have various contractual obligations in the normal course of our operations and financing activities. Significant contractual obligations as of

December 31, 2024 were as follows:


(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years
(In thousands)	Not Later Than One Year	Later Than One Year and Not Later Than Five Years	Later Than Five Years	Total
Recorded contractual obligations
Trade and other payables	$35,013	$—	$—	$35,013
Borrowings	209,463	940,780	585,330	1,735,573
Leases	13,776	30,733	91	44,600
Asset retirement obligation(a)	6,436	27,913	2,432,934	2,467,283
Other liabilities(b)	161,467	5,384	—	166,851
Off-Balance Sheet contractual obligations
Firm Transportation(c)	51,795	106,324	—	158,119
Total	$477,950	$1,111,134	$3,018,355	$4,607,439

(a)Represents our asset retirement obligation on an undiscounted basis. On a discounted basis the liability is $649 million as of December 31, 2024 as presented in the

Consolidated Statement of Financial Position.

(b)Represents accrued expenses and net revenue clearing. Excludes asset retirement obligations and revenue to be distributed. Refer to Note 23 in the Notes to the Group

Financial Statements for information.

(c)Represents reserved capacity to transport gas from production locations through pipelines to the ultimate sales meters.

We believe that our operational cash flows and existing liquidity will be sufficient to meet our contractual obligations and commitments over the next

twelve months, even in a stressed scenario, as demonstrated by our Viability and Going Concern assessment. Cash flows from operations were $346

million for the year ended December 31, 2024, which includes partial-year contributions from the Oaktree, Crescent Pass and East Texas II acquisitions

in 2024. Cash flows from operations were $410 million for the year ended December 31, 2023, which similarly included partial-year contributions from

the Tanos II acquisition in 2023. As of December 31, 2024 and 2023, we had current assets of $304 million and $305 million, respectively, and available

borrowings on our Credit Facility of $101 million and $146 million, respectively, (excluding $14 million and $11 million in outstanding letters of credit,

respectively), which could also be used to service our contractual obligations and commitments over the next twelve months.

Litigation and Regulatory Proceedings

From time to time, we may be involved in legal proceedings in the ordinary course of business. Currently, we are not a party to any material litigation

proceedings that, if determined adversely, are reasonably expected to have a material and adverse effect on our business, financial position, or results

of operations. Additionally, we are not aware of any material legal or administrative proceedings that are contemplated to be brought against us.

We have no other contingent liabilities that would have a material impact on our financial position, results of operations, or cash flows.

Environmental Matters

Our operations are subject to environmental laws and regulations in all the jurisdictions where we operate. We cannot predict the impact of additional

environmental laws and regulations that may be adopted in the future, including whether they would adversely affect our operations. We can offer no

assurance regarding the significance or cost of compliance with any new environmental legislation or regulation once implemented.

Recently Issued Accounting Pronouncements

Refer to Note 3 in the Notes to the Group Financial Statements for information regarding recent accounting pronouncements applicable to our

Consolidated Financial Statements.

Significant Accounting Policies & Estimates

Refer to Note 3 and 4 in the Notes to the Group Financial Statements for information regarding our significant accounting policies, judgments and

estimates.

Quantitative & Qualitative Disclosure About Market Risk

Refer to Note 25 in the Notes to the Group Financial Statements for information regarding market risk.

Internal Control Over Financial Reporting

We are subject to Section 404 of the Sarbanes-Oxley Act of 2002 which requires that we include a report of management on our internal control over

financial reporting in our Annual Report & Form 20-F. In addition, our independent registered public accounting firm must attest to and report on the


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

effectiveness of our internal control over financial reporting in our Annual Report & Form 20-F. No material weakness in financial reporting was identified

for the years ended December 31, 2024, 2023, or 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable

possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Refer to Risk Factors for additional information.

Trend Information

Other than as disclosed elsewhere in this Annual Report & Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events

since December 31, 2024 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources,

or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. For a discussion

of trend information, refer to Financial Review for additional information.

Risk Management Framework

Our Enterprise Risk Management (“ERM”) program underscores the significance of risk awareness and mitigation throughout the organization. We

proactively identify, assess, prioritize, monitor, and mitigate risks, enabling us to achieve the strategic objectives outlined in our business model. The

Board conducts thorough assessments of our principal and emerging risks regularly. Principal risks are actively managed due to their potential to

jeopardize our business model, future performance, or financial stability. Emerging risks are new, uncertain, or evolving threats that require ongoing

monitoring, as they may escalate to principal risks over time.

Our ERM program relies on systematic processes to continuously evaluate and enhance based on experience and industry best practices. As directed by

the Audit & Risk Committee, our Senior Leadership Team regularly engages in risk discussions across all operational areas. This proactive dialogue

fosters a culture that highly values risk mitigation, thereby preserving and creating value for our stakeholders. We consider risk management a collective

responsibility and empower all employees to enhance our processes and procedures to mitigate risks effectively. Our ERM program offers reasonable

assurance, not absolute certainty, that our risks are being effectively managed.

Risk Identification

In the risk identification phase of our ERM program, we capture potential and emerging risks arising from changes in circumstances or new

developments. To strengthen our risk identification, we undertake the following activities:

•Continuous monitoring of the risk universe for new or emerging risks;

•Re-evaluating the risk universe at least annually;

•Enhancing our risk awareness culture and identifying risk ownership;

•Interviewing risk owners about current mitigation activities; and

•Designing and implementing a risk mitigation control framework.

Risk Assessment

We assess business risks using a scorecard approach that evaluates (i) likelihood, (ii) potential impact, and (iii) speed of impact. Our assessment

includes both financial and non-financial exposures. For each identified principal risk, we develop a list of mitigating activities and potential opportunities

to offset or minimize the risk.

Risk Response

Risk management begins with the Board, responsible for ensuring that risks are addressed and mitigated through our corporate strategy, business

model, and within the Board’s risk appetite. The Board actively monitors company performance on mitigation activities by engaging with executive and

senior management.

Principal Risks and Uncertainties

By leveraging our comprehensive risk management framework, we ensure a proactive approach to mitigating potential threats, which is crucial for

maintaining our stability and achieving our strategic goals. Below, we outline our principal risks and corresponding risk responses.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Strategic Risks

1 Corporate Strategy & Acquisition Risk

Our future growth depends heavily on successfully completing acquisitions that align with our strategic goals. The process of executing and seamlessly

integrating acquisitions could place significant demands on our managerial, operational, and financial resources. If we fail to properly assess, execute,

and integrate acquisitions, it could negatively affect our business operations, financial performance, and overall prospects.


Link to Strategy:	.1. .2. .3. .4.	Link to KPIs:	.1. .2. .3. .4.

Response/Mitigation

•Maintaining a disciplined commitment to our core strategy is essential. By focusing on acquiring low-cost, long-life, and relatively low-decline

producing assets, along with complementary and synergistic midstream assets, we can ensure sustainable growth and stability. This approach

helps us maximize value and efficiency while minimizing risks.

•Our Commercial Development, Land, Reserves, Strategic Planning, and Financial Planning & Analysis teams collaborate closely to identify and

evaluate potential acquisition opportunities that align with our strategic objectives. This teamwork ensures that all potential acquisitions are

thoroughly vetted to meet our criteria.

•Our organization leverages its extensive experience and knowledge to identify and recognize potential opportunities.

•We conduct thorough risk assessments and a comprehensive due diligence process for all potential new acquisitions. This process ensures we

understand the full scope of risks and opportunities associated with each acquisitions, aligning with our commitment to sustainability and strategic

growth.

•We incorporate feedback and evaluations from external experts during the due diligence process. This feedback ensures that we benefit from

specialized knowledge and objective insights, enhancing the thoroughness and accuracy of our assessments.

•We strive to maintain a strong balance sheet with significant liquidity, enabling us to fund growth through acquisitions effectively. This financial

strength ensures we can seize opportunities as they arise, supporting our strategic objectives and long-term success.

2 Climate Risk

Climate-related matters remain central to numerous global corporate discussions and decisions. While opportunities related to climate continue to arise

in this swiftly changing landscape, we acknowledge that these issues may pose risks for DEC. Environmental regulations, climate change concerns, and

investor-driven changes may lead to (i) increased business costs, (ii) challenges in executing our strategy, and (iii) restricted access to specific markets

or investors.


Link to Strategy:	.1. .2. .3. .4.	Link to KPIs:	.2. .5. .6.

Response/Mitigation

•Our Board oversees the development of our climate risk strategy which aims to position us at the heart of the energy transition based on

responsible stewardship of existing natural gas and oil assets. The Board’s decision-making is informed by regular climate subject matter updates

from each of our key Board committees.

•Through our annual TCFD reporting process, we identify and assess climate-related risks for consideration of appropriate risk mitigation actions.

•Our core business strategy aligns with numerous sustainability initiatives. We acquire reliable, long-life, producing wells that often have not reached

their full potential under their former owners. This stewardship model allows us to avoid the high cost and sometimes sizeable environmental

impact often associated with exploration and drilling, which is the intended target of many sustainability initiatives.

•Alongside our zero-tolerance operating principle for fugitive emissions, we invest capital funds towards emission reduction technologies and

projects and regularly deploy SAM optimization techniques that allow us to eliminate or reduce our carbon footprint.

•Our core KPI of methane intensity reduction is central to our corporate goals to reduce both methane and GHG emissions.

•We again expanded our asset retirement capabilities, managed through our Next LVL subsidiary, that will permit us to exceed our long-term

Appalachian asset retirement agreements, reflective of our core KPI to meet or exceed state asset retirement goals.

Financial Risks

3 Commodity Price Volatility Risk

Changes in commodity prices may affect the value of our natural gas and oil reserves, operating cash flows and adjusted EBITDA, regardless of our

operating performance.


Link to Strategy:	.3.	Link to KPIs:	.1. .2. .4.

Response/Mitigation

•Our Senior Leadership Team monitors commodity markets on a daily basis and internal models are routinely updated to evaluate market changes.

This monitoring process includes reviewing realized pricing, forward pricing curves, and basis differentials. This active monitoring is critical to risk

mitigation and the successful execution of our hedge strategy.

•Our hedging policy continues to be guided by our goal to generate reliable free cash flow in any commodity pricing environment and secure our

debt and dividend payments. Our hedge strategy of proactively layering on appropriately structured hedge contracts at advantageous prices and

tenors allows us to capitalize on beneficial price movements in a constantly changing, forward natural gas price market.

•External specialists are consulted on a regular basis to assist in the execution of our hedging strategy.

4 Financial Strength & Flexibility Risk

Liquidity and access to capital risks arise from our inability to generate cash flows from operations to fund our business requirements or our inability to

access external sources of funding. These risks can result in difficulty in meeting our financial obligations as they become due.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report


Link to Strategy:	.1. .2. .3. .4.	Link to KPIs:	.1. .2. .3. .6.

Response/Mitigation

•Our Senior Leadership Team actively monitors debt levels and available borrowing capacity on our Credit Facility.

•Our Senior Leadership Team updates the Board at least quarterly on our debt and liquidity position.

•Our business model of stable production contributes to predictable cash flows, which facilitates an efficient forecasting ability.

•Strong access to bank capital as our borrowing base in the Fall 2024 redetermination was reaffirmed unanimously by our 12-bank group syndicate.

•Maintain access to multiple avenues of funding beyond our Credit Facility: equity issuance, asset-backed securitizations, and bond issuance.

•Proactive hedge program to protect against commodity price volatility and stabilize operating cash flows.

•Continuous management review of funding and financing alternatives.

Legal, Regulatory and Reputational Risks

5 Regulatory & Political Risk

Our operations are governed by regulations in every jurisdictions where we operate. We cannot predict the impact of potential future laws or

regulations, including whether they could negatively affect our operations. We cannot guarantee that any new legislation, if enacted, will not require us

to incur substantial costs, make significant investments, or reduce production.


Link to Strategy:	.2. .4.	Link to KPIs:	.1. .2. .3. .4. .5. .6. .7.

Response/Mitigation

•Operate to the highest industry standards with regulators and monitor compliance with our contracts, asset retirement program and taxation

requirements.

•External specialists utilized on legal, regulatory, and tax issues as required.

•Foster strong relationships with local, state, and federal authorities, as well as other government bodies and key stakeholders.

•Continuous monitoring of the political and regulatory environments in which we operate.

•Working responsibly and community/stakeholder engagement and outreach is an important factor in maintaining positive relationships in the

communities in which we operate.

•We encourage our employees to become actively involved in their communities through industry associations in their respective operating areas. By

leading, participating in and championing a variety of these organizations, we believe that our support of the energy industry’s associations adds

value to our business through the sharing of operating best practices, technical knowledge and legislation updates, ultimately to the benefit of all

our stakeholders.

6 Health & Safety Risk

Potential impacts from a lack of adherence to health and safety policies may result in fines and penalties, serious injury or death, environmental

impacts, statutory liability for environmental redemption and other financial and reputational consequences that could be significant.


Link to Strategy:	.2. .4.	Link to KPIs:	.1. .2. .3. .4. .7.

Response/Mitigation

•Effectively managing Health and Safety Risk exposure is the first priority for the Board and Senior Leadership Team. The Sustainability & Safety

Committee of the Board regularly reviews health and safety programs and mitigations.

•Health and safety training is included as part of all staff and contractor inductions.

•Detailed training on our field manual procedures has been provided to key stakeholders to ensure processes and procedures are embedded

throughout the organization and all operations.

•Establishing processes for continually assessing our overall operating and EHS capabilities, including evaluations to determine the level of oversight

required.

•Effective execution of the field operating manual in operations.

•Crisis and emergency response procedures and equipment are maintained and regularly tested to ensure we are able to respond to an emergency

quickly, safely and effectively.

•Leading and lagging indicators and targets developed in line with industry guidelines and benchmarks.

•Findings from ‘lessons learned’ reviews are implemented on future operations.

•All employees maintain work stoppage ability.

Operational Risk

7 Cybersecurity Risk

Cybersecurity risks for companies have increased significantly in recent years due to the mounting threat and sophistication of cybercrime. A

cybersecurity breach, incident, or failure of our IT systems could disrupt our businesses, put employees at risk, result in the disclosure of confidential

information, damage our reputation, and create significant financial and legal exposure for DEC.

Our network is designed using a Zero Trust Approach (“ZTA”) and is segmented to provide additional layers of security. We have established several

layers of security, including least privilege access, conditional access policies, and multi-factor authentication (“MFA”). Our ZTA extends beyond our

network to encompass identity, endpoints, infrastructure, data, and applications. This integrated ecosystem enables enhanced visibility, intelligence, and

automation for our security team. Due to our 100% cloud environment, we focus on continuous testing of our security posture from both trusted and

untrusted sources—both external and internal to our networks—rather than relying on a one-time penetration testing approach. Additionally, we

collaborate with third-party managed security service providers and utilize internal resources for round-the-clock incident monitoring.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report


Link to Strategy:	.2. .3.	Link to KPIs:	.1. .2. .4.

Response/Mitigation

•Employees are our first line of defense against cyberattacks, and we promote secure behaviors to help mitigate this growing risk. We focus on

practical rules through robust mandatory annual training and e-learning sessions delivered by our digital security team. One of these rules

addresses phishing and reminds staff to ‘think before they click’.

•We engage with key technology partners and suppliers to ensure potentially vulnerable systems are identified and secured.

•We test our cybersecurity crisis management and business continuity plans, recognizing the evolving nature and pace of the threat landscape.

•We continuously implement and monitor our IT Security Policy, which includes measures to protect against cyberattacks.

•Advanced network security detection with regular threat testing.

•Control and protection of confidential information.

•Our Information Security Management Team, which includes certain members of the Senior Leadership Team including the Chief Financial Officer,

Chief Information Officer, Chief Information Security Officer and General Counsel, meets at least once a quarter to discuss cybersecurity issues,

risks and strategies. The Information Security Management Team regularly briefs the Board of Directors on information security matters, including

assessing risks, efforts to improve our network security systems and enhanced employee trainings. The membership of this committee is

adequately trained and educated to provide proper governance, risk management, and control of the cybersecurity program utilizing the National

Institute of Standards and Technology framework.

There were no cybersecurity incidents during the year ended December 31, 2024, that resulted in an interruption to our operations, known losses of any

critical data, or otherwise had a material impact on our strategy, financial condition, or results of operations. However, the scope and impact of any

future incident cannot be predicted.

Risk Factors

You should carefully consider the risks described below, together with all of the other information in this Annual Report & Form 20-F. The risks and

uncertainties below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we believe to be immaterial may

also adversely affect our business. If any of the following risks occur, our business, financial condition, and results of operations could be seriously

harmed and you could lose all or part of your investment. This Annual Report & Form 20-F also contains forward-looking statements that involve risks

and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors,

including the risks described below and elsewhere in this Annual Report & Form 20-F.

Summary of Risk Factors

We are subject to a variety of risks and uncertainties which could have a material adverse effect on our business, financial condition, and results of

operations. The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth in this “Risk Factors” section.

•Volatility and future decreases in natural gas, NGLs and oil prices could materially and adversely affect our business, results of operations, financial

condition, cash flows or prospects.

•We face production risks and hazards that may affect our ability to produce natural gas, NGLs and oil at expected levels, quality and costs that may

result in additional liabilities to us.

•The levels of our natural gas and oil reserves and resources, their quality and production volumes may be lower than estimated or expected.

•The present value of future net cash flows from our reserves, or PV-10, will not necessarily be the same as the current market value of our

estimated natural gas, NGL and oil reserves.

•We may face unanticipated increased or incremental costs in connection with decommissioning obligations such as plugging.

•We may not be able to keep pace with technological developments in our industry or be able to implement them effectively.

•Deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or

negative credit market conditions could have a material adverse effect on our liquidity, results of operations, business and financial condition that

we cannot predict.

•Our operations are subject to a series of risks relating to climate change.

•We rely on third-party infrastructure such as TC Energy (formerly TransCanada), Enbridge, CNX, Dominion Energy Transmission, Enlink, Williams

and MarkWest (defined herein) that we do not control and/or, in each case, are subject to tariff charges that we do not control.

•Failure by us, our contractors or our primary offtakers to obtain access to necessary equipment and transportation systems could materially and

adversely affect our business, results of operations, financial condition, cash flows or prospects.

•A proportion of our equipment has substantial prior use and significant expenditure may be required to maintain operability and operations

integrity.

•We depend on our directors, key members of management, independent experts, technical and operational service providers and on our ability to

retain and hire such persons to effectively manage our growing business.

•We may face unanticipated water and other waste disposal costs.

•We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs.

•Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future

debt financing.

•There are risks inherent in our acquisitions of natural gas and oil assets, including our recent acquisition of Maverick.

•We may not have good title to all our assets and licenses.

•We may issue additional ordinary shares in connection with acquisitions or other growth opportunities, any share incentive or share option plan or

otherwise that may dilute other shareholdings.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

•Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

•The securitizations of our limited purpose, bankruptcy-remote, wholly owned subsidiaries may expose us to financing and other risks, and there can

be no assurance that we will be able to access the securitization market in the future, which may require us to seek more costly financing.

•We are subject to regulation and liability under environmental, health and safety regulations, the violation of which may affect our financial

condition and operations.

•Our operations are dependent on our compliance with obligations under permits, licenses, contracts and field development plans.

•Our internal systems and website may be subject to intentional and unintentional disruption, and our confidential information may be

misappropriated, stolen or misused, which could adversely impact our reputation and future sales.

•Our operations are subject to the risk of litigation.

•The dual listing of our ordinary shares may adversely affect the liquidity and value of our ordinary shares.

•Failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could have a material

adverse effect on our business.

•We are subject to certain tax risks, including changes in tax legislation in the United Kingdom and the United States.

Risks Related to Our Business, Operations and Industry

Volatility and future decreases in natural gas, NGLs and oil prices could materially and adversely affect our business, results of

operations, financial condition, cash flows or prospects.

Our business, results of operations, financial condition, cash flows or prospects depend substantially upon prevailing natural gas, NGL and oil prices,

which may be adversely impacted by unfavorable global, regional and national macroeconomic conditions, including but not limited to instability related

to the military conflict in Ukraine. Natural gas, NGLs and oil are commodities for which prices are determined based on global and regional demand,

supply and other factors, all of which are beyond our control.

Historically, prices for natural gas, NGLs and oil have fluctuated widely for many reasons, including:

•Global and regional supply and demand, and expectations regarding future supply and demand, for gas and oil products;

•Global and regional economic conditions;

•Evolution of stocks of oil and related products;

•Increased production due to new extraction developments and improved extraction and production methods;

•Geopolitical uncertainty;

•Threats or acts of terrorism, war or threat of war, which may affect supply, transportation or demand;

•Weather conditions, natural disasters, climate change and environmental incidents;

•Access to pipelines, storage platforms, shipping vessels and other means of transporting, storing and refining gas and oil, including without

limitation, changes in availability of, and access to, pipeline ullage;

•Prices and availability of alternative fuels;

•Prices and availability of new technologies affecting energy consumption;

•Increasing competition from alternative energy sources;

•The ability of OPEC and other oil-producing nations, to set and maintain specified levels of production and prices;

•Political, economic and military developments in gas and oil producing regions generally;

•Governmental regulations and actions, including the imposition of tariffs, export restrictions and taxes and environmental requirements and

restrictions as well as anti-hydrocarbon production policies;

•Trading activities by market participants and others either seeking to secure access to natural gas, NGLs and oil or to hedge against commercial

risks, or as part of an investment portfolio; and

•Market uncertainty, including fluctuations in currency exchange rates, and speculative activities by those who buy and sell natural gas, NGLs and oil

on the world markets.

It is impossible to accurately predict future gas, NGL and oil price movements. Historically, natural gas prices have been highly volatile and subject to

large fluctuations in response to relatively minor changes in the demand for natural gas. According to the U.S. Energy Information Administration, the

historical high and low Henry Hub natural gas spot prices per MMBtu for the following periods were as follows: in 2022, high of $9.85 and low of $3.46;

in 2023, high of $3.78 and low of $1.74, and in 2024, high of $13.20 and low of $1.20 — highlighting the volatile nature of commodity prices.

The economics of producing from some wells and assets may also result in a reduction in the volumes of our reserves which can be produced

commercially, resulting in decreases to our reported reserves. Additionally, further reductions in commodity prices may result in a reduction in the

volumes of our reserves. We might also elect not to continue production from certain wells at lower prices, or our license partners may not want to

continue production regardless of our position.

Each of these factors could result in a material decrease in the value of our reserves, which could lead to a reduction in our natural gas, NGLs and oil

development activities and acquisition of additional reserves. In addition, certain development projects or potential future acquisitions could become

unprofitable as a result of a decline in price and could result in us postponing or canceling a planned project or potential acquisition, or if it is not

possible to cancel, to carry out the project or acquisition with negative economic impacts. Further, a reduction in natural gas, NGL or oil prices may lead

our producing fields to be shut down and to be entered into the decommissioning phase earlier than estimated.

Our revenues, cash flows, operating results, profitability, dividends, future rate of growth and the carrying value of our gas and oil properties depend

heavily on the prices we receive for natural gas, NGLs and oil sales. Commodity prices also affect our cash flows available for capital investments and

other items, including the amount and value of our gas and oil reserves. In addition, we may face gas and oil property impairments if prices fall

significantly. In light of the continuing increase in supply coming from the Utica and Marcellus shale plays of the Appalachian Basin, no assurance can be

given that commodity prices will remain at levels which enable us to do business profitably or at levels that make it economically viable to produce from


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certain wells and any material decline in such prices could result in a reduction of our net production volumes and revenue and a decrease in the

valuation of our production properties, which could negatively impact our business, results of operations, financial condition, cash flows or prospects.

We conduct our business in a highly competitive industry.

The gas and oil industry is highly competitive. The key areas in which we face competition include:

•Engagement of third-party service providers whose capacity to provide key services may be limited;

•Acquisition of other companies that may already own licenses or existing producing assets;

•Acquisition of assets offered for sale by other companies;

•Access to capital (debt and equity) for financing and operational purposes;

•Purchasing, leasing, hiring, chartering or other procuring of equipment that may be scarce; and

•Employment of qualified and experienced skilled management and gas and oil professionals and field operations personnel.

Competition in our markets is intense and depends, among other things, on the number of competitors in the market, their financial resources, their

degree of geological, geophysical, engineering and management expertise and capabilities, their degree of vertical integration and pricing policies, their

ability to develop properties on time and on budget, their ability to select, acquire and develop reserves and their ability to foster and maintain

relationships with the relevant authorities. The cost to attract and retain qualified and experienced personnel has increased and may increase

substantially in the future.

Our competitors also include those entities with greater technical, physical and financial resources than us. Finally, companies and certain private equity

firms not previously investing in natural gas and oil may choose to acquire reserves to establish a firm supply or simply as an investment. Any such

companies will also increase market competition which may directly affect us.

The effects of operating in a competitive industry may include:

•Higher than anticipated prices for the acquisition of licenses or assets;

•The hiring by competitors of key management or other personnel; and

•Restrictions on the availability of equipment or services.

If we are unsuccessful in competing against other companies, our business, results of operations, financial condition, cash flows or prospects could be

materially adversely affected.

We may experience delays in production, transportation and marketing.

Various production, transportation and marketing conditions may cause delays in natural gas, NGLs and oil production and adversely affect our business.

For example, the gas gathering systems that we own connect to other pipelines or facilities which are owned and operated by third parties. These

pipelines and other midstream facilities and others upon which we rely may become unavailable because of testing, turnarounds, line repair, reduced

operating pressure, lack of operating capacity, regulatory requirements, curtailments of receipt or deliveries due to insufficient capacity or because of

damage. In periods where NGL prices are high, we benefit greatly from the ability to process NGLs. Our largest processor of NGLs is the MarkWest

Energy Partners, L.P., (“MarkWest”) plant located in Langley, Kentucky. If we were to lose the ability to process NGLs at MarkWest’s plant during a

period of high pricing, our revenues would be negatively impacted. As a short-term measure, we could divert the natural gas through other pipeline

routes; however, certain pipeline operators would eventually decline to transport the gas due to its liquid content at a level that would exceed tariff

specifications for those pipelines. The lack of available capacity on third-party systems and facilities could reduce the price offered for our production or

result in the shut-in of producing wells. Any significant changes affecting these infrastructure systems and facilities, as well as any delays in constructing

new infrastructure systems and facilities, could delay our production, which could negatively impact our business, results of operations, financial

condition, cash flows or prospects.

We face production risks and hazards that may affect our ability to produce natural gas, NGLs and oil at expected levels, quality and

costs that may result in additional liabilities to us.

Our natural gas and oil production operations are subject to numerous risks common to our industry, including, but not limited to, premature decline of

reservoirs, incorrect production estimates, invasion of water into producing formations, geological uncertainties such as unusual or unexpected rock

formations and abnormal geological pressures, low permeability of reservoirs, contamination of natural gas and oil, blowouts, oil and other chemical

spills, explosions, fires, equipment damage or failure, challenges relating to transportation, pipeline infrastructure, natural disasters, uncontrollable flows

of oil, natural gas or well fluids, adverse weather conditions, shortages of skilled labor, delays in obtaining regulatory approvals or consents, pollution

and other environmental risks.

If any of the above events occur, environmental damage, including biodiversity loss or habitat destruction, injury to persons or property and other

species and organisms, loss of life, failure to produce natural gas, NGLs and oil in commercial quantities or an inability to fully produce discovered

reserves could result. These events could also cause substantial damage to our property or the property of others and our reputation and put at risk

some or all of our interests in licenses, which enable us to produce, and could result in the incurrence of fines or penalties, criminal sanctions potentially

being enforced against us and our management, as well as other governmental and third-party claims. Consequent production delays and declines from

normal field operating conditions and other adverse actions taken by third parties may result in revenue and cash flow levels being adversely affected.

Moreover, should any of these risks materialize, we could incur legal defense costs, remedial costs and substantial losses, including those due to injury

or loss of life, human health risks, severe damage to or destruction of property, natural resources and equipment, environmental damage, unplanned

production outages, clean-up responsibilities, regulatory investigations and penalties, increased public interest in our operational performance and

suspension of operations, which could negatively impact our business, results of operations, financial condition, cash flows or prospects.

The levels of our natural gas and oil reserves and resources, their quality and production volumes may be lower than estimated or

expected.

The reserves data as of December 31, 2024, 2023 and 2022 contained in this Annual Report & Form 20-F has been audited by NSAI unless stated

otherwise. The standards utilized to prepare the reserves information that has been extracted in this document may be different from the standards of

reporting adopted in other jurisdictions. Investors, therefore, should not assume that the data found in the reserves information set forth in this Annual


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Report & Form 20-F is directly comparable to similar information that has been prepared in accordance with the reserve reporting standards of other

jurisdictions, such as the United Kingdom.

In general, estimates of economically recoverable natural gas, NGLs and oil reserves are based on a number of factors and assumptions made as of the

date on which the reserves estimates were determined, such as geological, geophysical and engineering estimates (which have inherent uncertainties),

historical production from the properties or analogous reserves, the assumed effects of regulation by governmental agencies and estimates of future

commodity prices, operating costs, gathering and transportation costs and production related taxes, all of which may vary considerably from actual

results.

Underground accumulations of hydrocarbons cannot be measured in an exact manner and estimates thereof are a subjective process aimed at

understanding the statistical probabilities of recovery. Estimates of the quantity of economically recoverable natural gas and oil reserves, rates of

production and, where applicable, the timing of development expenditures depend upon several variables and assumptions, including the following:

•Production history compared with production from other comparable producing areas;

•Quality and quantity of available data;

•Interpretation of the available geological and geophysical data;

•Effects of regulations adopted by governmental agencies;

•Future percentages of sales;

•Future natural gas, NGLs and oil prices;

•Capital investments;

•Effectiveness of the applied technologies and equipment;

•Effectiveness of our field operations employees to extract the reserves;

•Natural events or the negative impacts of natural disasters;

•Future operating costs, tax on the extraction of commercial minerals, development costs and workover and remedial costs; and

•The judgment of the persons preparing the estimate.

As all reserve estimates are subjective, each of the following items may differ materially from those assumed in estimating reserves:

•The quantities and qualities that are ultimately recovered;

•The timing of the recovery of natural gas and oil reserves;

•The production and operating costs incurred;

•The amount and timing of development expenditures, to the extent applicable;

•Future hydrocarbon sales prices; and

•Decommissioning costs and changes to regulatory requirements for decommissioning.

Many of the factors in respect of which assumptions are made when estimating reserves are beyond our control and therefore these estimates may

prove to be incorrect over time. Evaluations of reserves necessarily involve multiple uncertainties. The accuracy of any reserves evaluation depends on

the quality of available information and natural gas, NGLs and oil engineering and geological interpretation. Furthermore, less historical well production

data is available for unconventional wells because they have only become technologically viable in the past twenty years and the long-term production

data is not always sufficient to determine terminal decline rates. In comparison, some conventional wells in our portfolio have been productive for a

much longer time. As a result, there is a risk that estimates of our shale reserves are not as reliable as estimates of the conventional well reserves that

have a longer historical profile to draw on. Interpretation, testing and production after the date of the estimates may require substantial upward or

downward revisions in our reserves and resources data. Moreover, different reserves engineers may make different estimates of reserves and cash flows

based on the same available data. Actual production, revenues and expenditures with respect to reserves will vary from estimates and the variances

may be material.

If the assumptions upon which the estimates of our natural gas and oil reserves prove to be incorrect or if the actual reserves available to us (or the

operator of an asset in we have an interest) are otherwise less than the current estimates or of lesser quality than expected, we may be unable to

recover and produce the estimated levels or quality of natural gas, NGLs or oil set out in this document and this may materially and adversely affect our

business, results of operations, financial condition, cash flows or prospects.

The PV-10, will not necessarily be the same as the current market value of our estimated natural gas, NGL and oil reserves.

You should not assume that the present value of future net cash flows from our reserves is the current market value of our estimated natural gas, NGL

and oil reserves. Actual future net cash flows from our natural gas and oil properties will be affected by factors such as:

•Actual prices we receive for natural gas, NGL and oil;

•Actual cost of development and production expenditures;

•The amount and timing of actual production;

•Transportation and processing; and

•Changes in governmental regulations or taxation.

The timing of both our production and our incurrence of expenses in connection with the development and production of our natural gas and oil

properties will affect the timing and amount of actual future net cash flows from reserves, and thus their actual present value. In addition, the 10%

discount factor we use when calculating discounted future net cash flows may not be the most appropriate discount factor based on interest rates in

effect from time to time and risks associated with us or the natural gas and oil industry in general. Actual future prices and costs may differ materially

from those used in the present value estimate. Refer to APMs within this Annual Report & Form 20-F for additional information regarding our use of

PV-10.


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We may face unanticipated increased or incremental costs in connection with decommissioning obligations such as plugging.

In the future, we may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use for the

processing of natural gas and oil reserves. With regards to plugging, we are party to agreements with regulators in the states of Ohio, West Virginia,

Kentucky and Pennsylvania, four of our largest wellbore states, setting forth plugging and abandonment schedules spanning a period ranging from 10 to 15

years. We will incur such decommissioning costs at the end of the operating life of some of our properties. The ultimate decommissioning costs are

uncertain and cost estimates can vary in response to many factors including changes to relevant legal requirements, the emergence of new restoration

techniques, the shortage of plugging vendors, difficult terrain or weather conditions or experience at other production sites. The expected timing and

amount of expenditure can also change, for example, in response to changes in reserves, wells losing commercial viability sooner than forecasted or

changes in laws and regulations or their interpretation. As a result, there could be significant adjustments to the provisions established which would affect

future financial results. The use of other funds to satisfy such decommissioning costs may impair our ability to focus capital investment in other areas of our

business, which could materially and adversely affect our business, results of operations, financial condition, cash flows or prospects.

We may not be able to keep pace with technological developments in our industry or be able to implement them effectively.

The natural gas and oil industry is characterized by rapid and significant technological advancements and introductions of new products and services

using new technologies, such as emissions controls and processing technologies. Rapid technological advancements in information technology and

operational technology domains require seamless integration. Failure to integrate these technologies efficiently may result in operational inefficiencies,

security vulnerabilities, and increased costs. During mergers and acquisitions, integrating technology assets from acquired companies can be complex.

Poor integration may lead to data inconsistencies, security gaps and operational disruptions. Technology systems are also susceptible to cybersecurity

threats, including malware, data breaches, and ransomware attacks. These threats may disrupt operations, compromise sensitive data and lead to

significant financial losses. Further, inefficient data management practices may result in data breaches, data loss and missed opportunities for

operational insights. The presence of legacy technology systems can also pose challenges, as they may lack modern security features, making them

vulnerable to cyber threats and necessitating costly upgrades. As others use or develop new technologies (including technologies related to artificial

intelligence), we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at

substantial costs. In addition, other natural gas and oil companies may have greater financial, technical and personnel resources that allow them to

enjoy technological advantages, which may in the future allow them to implement new technologies before we can. Additionally, reliance on global

supply chains for information technology hardware, software and operational technology equipment exposes the industry to supply chain disruptions,

shortages and cybersecurity risks.

If we do not have access to capital on favorable terms, on the timeline we require, or at all, our financial condition and results of

operations could be materially adversely affected.

We require capital to complete acquisitions that we believe will enhance shareholder return. Significant volatility or disruption in the global financial

markets may result in us not being able to obtain additional financing on favorable terms, on the timeline we anticipate, or at all, and we may not be able

to refinance, if necessary, any outstanding debt when due, all of which could have a material adverse effect on our financial condition. Any inability to

obtain additional funding on favorable terms, on the timeline we anticipate, or at all, may prevent us from acquiring new assets, cause us to curtail our

operations significantly, reduce planned capital expenditures or obtain funds through arrangements that management does not currently anticipate,

including disposing of our assets, the occurrence of any of which may significantly impair our ability to deliver shareholder returns. If our operating results

falter, our cash flow or capital resources prove inadequate, or if interest rates increase significantly, we could face liquidity problems that could materially

and adversely affect our results of operations and financial condition.

Deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial

downturn, or negative credit market conditions could have a material adverse effect on our liquidity, results of operations, business

and financial condition that we cannot predict.

Economic conditions in a number of industries in which our customers operate have experienced substantial deterioration in the past, resulting in

reduced demand for natural gas and oil. Renewed or continued weakness in the economic conditions of any of the industries we serve or that are

served by our customers, or the increased focus by markets on carbon-neutrality, could adversely affect our business, financial condition, results of

operation and liquidity in a number of ways. For example:

•Demand for natural gas and electricity in the United States is impacted by industrial production, which if weakened would negatively impact the

revenues, margins and profitability of our natural gas business;

•A decrease in international demand for natural gas or NGLs produced in the United States could adversely affect the pricing for such products,

which could adversely affect our results of operations and liquidity;

•The tightening of credit or lack of credit availability to our customers could adversely affect our liquidity, as our ability to receive payment for our

products sold and delivered depends on the continued creditworthiness of our customers;

•Our ability to refinance our Credit Facility may be limited and the terms on which we are able to do so may be less favorable to us depending on

the strength of the capital markets or our credit ratings;

•Our ability to access the capital markets may be restricted at a time when we would like, or need, to raise capital for our business including for

exploration and/or development of our natural gas reserves;

•Increased capital markets scrutiny of oil and gas companies may lead to increased costs of capital or lack of credit availability; and

•A decline in our creditworthiness may require us to post letters of credit, cash collateral, or surety bonds to secure certain obligations, all of which

would have an adverse effect on our liquidity.

Our operations are subject to a series of risks relating to climate change.

Continued public concern regarding climate change and potential mitigation through regulation could have a material impact on our business.

International agreements, national, regional, state and local legislation, and regulatory measures to limit GHG emissions or mandate related disclosures

are currently in place or in various stages of discussion or implementation. Given that some of our operations are associated with emissions of GHGs,

these and other GHG emissions-related laws, policies and regulations may result in substantial capital, compliance, operating and maintenance costs.

The level of expenditure required to comply with these laws and regulations is uncertain and is expected to vary depending on the laws enacted by

particular countries, states, provinces and municipalities.

Additionally, regulatory, market and other changes to respond to climate change may adversely impact our business, financial condition or results of

operations. Reporting expectations are also increasing, with a variety of customers, capital providers and regulators seeking increased information on


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climate-related risks. For example, U.S. states have adopted or proposed climate-related disclosures rules that may require us to incur significant costs

to assess and disclose on a range of climate-related data and risks.

Internationally, the United Nations-sponsored “Paris Agreement” requires member nations to individually determine and submit non-binding emissions

reduction targets every five years after 2020. In November 2021, the international community gathered in Glasgow at the 26th Conference of the

Parties to the UN Framework Convention on Climate Change, during which multiple announcements were made, including a call for parties to eliminate

certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs. Relatedly, the United States and European Union jointly announced

the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all

feasible reductions” in the energy sector. Such commitments were re-affirmed at the 27th Conference of the Parties in Sharm El Sheikh. However, the

United States indicated in January 2025 its intent to withdraw from the Paris Agreement, and changes undertaken by the new U.S. Presidential

Administration have or may in the future reverse or rescind climate-related initiatives and regulations adopted by prior administrations and to focus on

driving increased U.S. energy production. The emission reduction targets and other provisions of legislative or regulatory initiatives and policies enacted

in the future by the states in which we operate, could adversely impact our business by imposing increased costs in the form of higher taxes or

increases in the prices of emission allowances, limiting our ability to develop new gas and oil reserves, transport hydrocarbons through pipelines or other

methods to market, decreasing the value of our assets, or reducing the demand for hydrocarbons and refined petroleum products. With increased

pressure to reduce GHG emissions by replacing fossil fuel energy generation with alternative energy generation, it is possible that peak demand for gas

and oil will be reached, and gas and oil prices will be adversely impacted as and when this happens. Further, the consequences of the effects of global

climate change, and the continued political and societal attention afforded to mitigating the effects of climate change, may generate adverse investor

and stakeholder sentiment towards the hydrocarbon industry and negatively impact the ability to invest in the sector. Similarly, longer term reduction in

the demand for hydrocarbon products due to the pace of commercial deployment of alternative energy technologies or due to shifts in consumer

preference for lower GHG emissions products could reduce the demand for the hydrocarbons that we produce.

Further, in response to concerns related to climate change, companies in the fossil fuel sector may be exposed to increasing financial risks. Financial

institutions, including investment advisors and certain sovereign wealth, pension and endowment funds, may elect in the future to shift some or all of their

investment into non-fossil fuel related sectors. Institutional lenders who provide financing to fossil-fuel energy companies have also become more attentive

to sustainable lending practices, and some of them may elect in the future not to provide funding for fossil fuel energy companies. A material reduction in

the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration, development, production, and transportation

activities, which could in turn negatively affect our operations.

The Group may also be subject to activism from environmental non-governmental organizations (“NGOs”) campaigning against fossil fuel extraction or

negative publicity from media alleging inadequate remedial actions to retire non-producing wells effectively, which could affect our reputation, disrupt our

programs, require us to incur significant, unplanned expense to respond or react to intentionally disruptive campaigns or media reports, create blockades to

interfere with operations or otherwise negatively impact our business, results of operations, financial condition, cash flows or prospects. Litigation risks are

also increasing as a number of entities have sought to bring suit against various oil and natural gas companies in state or federal court, alleging among

other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that the companies have been

aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.

Finally, our operations are subject to disruption from the physical effects that may be caused or aggravated by climate change. These include risks from

extreme weather events, such as hurricanes, severe storms, floods, heat waves, and ambient temperature increases, as well as wildfires, each of which

may become more frequent or more severe as a result of climate change.

We rely on third-party infrastructure that we do not control and/or, in each case, are subject to tariff charges that we do not control.

A significant portion of our production passes through third-party owned and controlled infrastructure. If these third-party pipelines or liquids processing

facilities experience any event that causes an interruption in operations or a shut-down such as mechanical problems, an explosion, adverse weather

conditions, a terrorist attack or labor dispute, our ability to produce or transport natural gas could be severely affected. For example, we have an

agreement with a third-party where approximately 39% of the NGLs we sold during the year ending December 31, 2024 were processed at the third-

party’s facility in Kentucky. Any material decreases in our ability to process or transport our natural gas through third-party infrastructure could have a

material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

Our use of third-party infrastructure may be subject to tariff charges. Although we seek to manage our flow via our midstream infrastructure, we may not

always be able to avoid higher tariffs or basis blowouts due to the lack of interconnections. In such instances, the tariff charges can be substantial and the

cost is not subject to our direct control, although we may have certain contractual or governmental protections and rights. Generally, the operator of the

gathering or transmission pipelines sets these tariffs and expenses on a cost sharing basis according to our proportionate hydrocarbon through-put of that

facility. A provisional tariff rate is applied during the relevant year and then finalized the following year based on the actual final costs and final through-put

volumes. Such tariffs are dependent on continued production from assets owned by third parties and, may be priced at such a level as to lead to

production from our assets ceasing to be economic and thus may have a material adverse effect on our business, results of operations, financial condition,

cash flows or prospects.

Furthermore, our use of third-party infrastructure exposes us to the possibility that such infrastructure will cease to be operational or be

decommissioned and therefore require us to source alternative export routes and/or prevent economic production from our assets. This could also have

a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

Failure by us, our contractors or our primary offtakers to obtain access to necessary equipment and transportation systems could

materially and adversely affect our business, results of operations, financial condition, cash flows or prospects.

We rely on our natural gas and oil field suppliers and contractors to provide materials and services that facilitate our production activities, including

plugging and abandonment contractors. Any competitive pressures on the oil field suppliers and contractors could result in a material increase of costs

for the materials and services required to conduct our business and operations. For example, we are dependent on the availability of plugging vendors

to help us satisfy abandonment schedules that we have agreed to with the states of Ohio, West Virginia, Kentucky and Pennsylvania. Such personnel

and services can be scarce and may not be readily available at the times and places required. Future cost increases could have a material adverse effect

on our asset retirement liability, operating income, cash flows and borrowing capacity and may require a reduction in the carrying value of our

properties, our planned level of spending for development and the level of our reserves. Prices for the materials and services we depend on to conduct

our business may not be sustained at levels that enable us to operate profitably.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

We and our offtakers rely, and any future offtakers will rely, upon the availability of pipeline and storage capacity systems, including such infrastructure

systems that are owned and operated by third parties. As a result, we may be unable to access or source alternatives for the infrastructure and systems

which we currently use or plan to use, or otherwise be subject to interruptions or delays in the availability of infrastructure and systems necessary for

the delivery of our natural gas, NGLs and oil to commercial markets. In addition, such infrastructure may be close to its design life and decisions may be

taken to decommission such infrastructure or perform life extension work to maintain continued operations. Any of these events could result in

disruptions to our projects and thereby impact our ability to deliver natural gas, NGLs and oil to commercial markets and/or may increase our costs

associated with the production of natural gas, NGLs and oil reliant upon such infrastructure and systems. Further, our offtakers could become subject to

increased tariffs imposed by government regulators or the third-party operators or owners of the transportation systems available for the transport of

our natural gas, NGLs and oil, which could result in decreased offtaker demand and downward pricing pressure.

If we are unable to access infrastructure systems facilitating the delivery of our natural gas, NGLs and oil to commercial markets due to our contractors

or primary offtakers being unable to access the necessary equipment or transportation systems, our operations will be adversely affected. If we are

unable to source the most efficient and expedient infrastructure systems for our assets then delivery of our natural gas, NGLs and oil to the commercial

markets may be negatively impacted, as may our costs associated with the production of natural gas, NGLs and oil reliant upon such infrastructure and

systems.

A proportion of our equipment has substantial prior use and significant expenditure may be required to maintain operability and

operations integrity.

A part of our business strategy is to optimize or refurbish producing assets where possible to maximize the efficiency of our operations while avoiding

significant expenses associated with purchasing new equipment. Our producing assets and midstream infrastructure require ongoing maintenance to

ensure continued operational integrity. For example, some older wells may struggle to produce suitable line pressure and will require the addition of

compression to push natural gas. Despite our planned operating and capital expenditures, there can be no guarantee that our assets or the assets we

use will continue to operate without fault and not suffer material damage in this period through, for example, wear and tear, severe weather conditions,

natural disasters or industrial accidents. If our assets, or the assets we use, do not operate at or above expected efficiencies, we may be required to

make substantial expenditures beyond the amounts budgeted. Any material damage to these assets or significant capital expenditure on these assets for

improvement or maintenance may have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. In

addition, as with planned operating and capital expenditure, there is no guarantee that the amounts expended will ensure continued operation without

fault or address the effects of wear and tear, severe weather conditions, natural disasters or industrial accidents. We cannot guarantee that such

optimization or refurbishment will be commercially feasible to undertake in the future and we cannot provide assurance that we will not face unexpected

costs during the optimization or refurbishment process.

We depend on our directors, key members of management, independent experts, technical and operational service providers and on

our ability to retain and hire such persons to effectively manage our growing business.

Our future operating results depend in significant part upon the continued contribution of our directors, key senior management and technical, financial

and operations personnel. Management of our growth will require, among other things, stringent control of financial systems and operations, the

continued development of our control environment, the ability to attract and retain sufficient numbers of qualified management and other personnel, the

continued training of such personnel and the presence of adequate supervision.

In addition, the personal connections and relationships of our directors and key management are important to the conduct of our business. If we were

to unexpectedly lose a member of our key management or fail to maintain one of the strategic relationships of our key management team, our business,

results of operations, financial condition, cash flows or prospects could be materially adversely affected. In particular, we are highly dependent on our

Chief Executive Officer, Robert Russell (“Rusty”) Hutson, Jr. Acquisitions are a key part of our strategy, and Mr. Hutson has been instrumental in

sourcing them and securing their financing. Furthermore, as our founder, Mr. Hutson is strongly associated with our success, and if he were to cease

being the Chief Executive Officer, perception of our future prospects may be diminished.

Attracting and retaining additional skilled personnel will be fundamental to the continued growth and operation of our business. We require skilled

personnel in the areas of development, operations, engineering, business development, natural gas, NGLs and oil marketing, finance and accounting

relating to our projects. Personnel costs, including salaries, are increasing as industry wide demand for suitably qualified personnel increases. We may

not successfully attract new personnel and retain existing personnel required to continue to expand our business and to successfully execute and

implement our business strategy.

We may face unanticipated water and other waste disposal costs.

We may be subject to regulation that restricts our ability to discharge water produced as part of our natural gas, oil and NGL production operations.

Productive zones frequently contain water that must be removed for the natural gas, oil and NGL to produce, and our ability to remove and dispose of

sufficient quantities of water from the various zones will determine whether we can produce natural gas, oil and NGL in commercial quantities. The

produced water must be transported from the leasehold and/or injected into disposal wells. The availability of disposal wells with sufficient capacity to

receive all of the water produced from our wells may affect our ability to produce our wells. Also, the cost to transport and dispose of that water,

including the cost of complying with regulations concerning water disposal, may reduce our profitability. We have entered into various water

management services agreements in the Appalachian Region which provide for the disposal of our produced water by established counterparties with

large integrated pipeline networks. If these counterparties fail to perform, we may have to shut in wells, reduce drilling activities, or upgrade facilities for

water handling or treatment. The costs to dispose of this produced water may increase for a number of reasons, including if new laws and regulations

require water to be disposed in a different manner.

In 2016, the EPA adopted effluent limitations for the treatment and discharge of wastewater resulting from onshore unconventional natural gas, oil and

NGL extraction facilities to publicly owned treatment works. In addition, the injection of fluids gathered from natural gas, oil and NGL producing

operations in underground disposal wells has been identified by some groups and regulators as a potential cause of increased seismic events in certain

areas of the country, including the states of West Virginia, Ohio and Kentucky in the Appalachian Region as well as Oklahoma, Texas and Louisiana in

our Central Region. Certain states, including those located in the Appalachian Region have adopted, or are considering adopting, laws and regulations

that may restrict or prohibit oilfield fluid disposal in certain areas or underground disposal wells, and state agencies implementing those requirements

may issue orders directing certain wells in areas where seismic events have occurred to restrict or suspend disposal well permits or operations or impose

certain conditions related to disposal well construction, monitoring, or operations. Any of these developments could increase our cost to dispose of our

produced water.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs.

Pursuant to the authority under the Natural Gas Pipeline Safety Act of 1968 (“NGPSA”) and Hazardous Liquid Pipeline Safety Act of 1979 (“HLPSA”), as

amended by the Pipeline Safety Improvement Act of 2002 (“PSIA”), the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006 (“PIPESA”)

and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (the “2011 Pipeline Safety Act”), the Pipeline and Hazardous Materials Safety

Administration (“PHMSA”) has promulgated regulations requiring pipeline operators to develop and implement integrity management programs for

certain gas and hazardous liquid pipelines that, in the event of a pipeline leak or rupture could affect high consequence areas (“HCAs”), which are areas

where a release could have the most significant adverse consequences, including high-population areas, certain drinking water sources and unusually

sensitive ecological areas. These regulations require operators of covered pipelines to:

•Perform ongoing assessments of pipeline integrity;

•Identify and characterize applicable threats to pipeline segments that could impact HCAs;

•Improve data collection, integration and analysis;

•Repair and remediate the pipeline as necessary; and

•Implement preventive and mitigating actions.

In addition, states have adopted regulations similar to existing PHMSA regulations for certain intrastate gas and hazardous liquid pipelines. At this time,

we cannot predict the ultimate cost of compliance with applicable pipeline integrity management regulations, as the cost will vary significantly depending

on the number and extent of any repairs found to be necessary as a result of pipeline integrity testing, but the results of these tests could cause us to

incur significant and unanticipated capital and operating expenditures for repairs or upgrades deemed necessary to ensure the safe and reliable

operation of our pipelines.

The 2011 Pipeline Safety Act amends the NGPSA and HLPSA pipeline safety laws, requiring increased safety measures for gas and hazardous liquids

pipelines. Among other things, the 2011 Pipeline Safety Act directs the Secretary of Transportation to promulgate regulations relating to expanded

integrity management requirements, automatic or remote-controlled valve use, excess flow valve use, leak detection system installation, testing to

confirm the material strength of certain pipelines, and operator verification of records confirming the maximum allowable pressure of certain intrastate

gas transmission pipelines. Additionally, pursuant to one of the requirements of the 2011 Pipeline Safety Act, in May 2016, PHMSA proposed rules that

would, if adopted, impose more stringent requirements for certain gas lines, extend certain of PHMSA’s current regulatory safety programs for gas

pipelines beyond HCAs to cover gas pipelines found in newly defined “moderate consequence areas” that contain as few as five dwellings within the

potential impact area and require gas pipelines installed before 1970 that were exempted from certain pressure testing obligations to be tested to

determine their maximum allowable operating pressures (“MAOP”). Other requirements proposed by PHMSA under the rulemaking include: reporting to

PHMSA in the event of certain MAOP exceedances; strengthening PHMSA integrity management requirements; considering seismicity in evaluating

threats to a pipeline; conducting hydrostatic testing for all pipeline segments manufactured using longitudinal seam welds; and using more detailed

guidance from PHMSA in the selection of assessment methods to inspect pipelines. The proposed rulemaking also seeks to impose a number of

requirements on gathering lines. In January 2017, PHMSA finalized new regulations for hazardous liquid pipelines that significantly extend and expand

the reach of certain PHMSA integrity management requirements (i.e., periodic assessments, repairs and leak detection), regardless of the pipeline’s

proximity to an HCA. The final rule also requires all pipelines in or affecting an HCA to be capable of accommodating in-line inspection tools within the

next 20 years. In addition, the final rule extends annual and accident reporting requirements to gravity lines and all gathering lines and also imposes

inspection requirements on pipelines in areas affected by extreme weather events and natural disasters, such as hurricanes, landslides, floods,

earthquakes, or other similar events that are likely to damage infrastructure PHMSA regularly revises its pipeline safety regulations. For example, in June

2016, the President signed the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (the “2016 PIPES Act”) into law. The 2016

PIPES Act reauthorizes PHMSA through 2019, and facilitates greater pipeline safety by providing PHMSA with emergency order authority, including

authority to issue prohibitions and safety measures on owners and operators of gas or hazardous liquid pipeline facilities to address imminent hazards,

without prior notice or an opportunity for a hearing, as well as enhanced release reporting requirements, requiring a review of both natural gas and

hazardous liquid integrity management programs, and mandating the creation of a working group to consider the development of an information-

sharing system related to integrity risk analyses. The 2016 PIPES Act also requires that PHMSA publish periodic updates on the status of those mandates

outstanding from the 2011 Pipeline Safety Act PHMSA has recently published three parts of its so-called “Mega Rule,” including rules focused on: the

safety of gas transmission pipelines, the safety of hazardous liquid pipelines and enhanced emergency order procedures. PHMSA finalized the first part

of the rule, which primarily addressed maximum operating pressure and integrity management near HCAs for onshore gas transmission pipelines, in

October 2019. PHMSA finalized the second part of the rule, which extended federal safety requirements to onshore gas gathering pipelines with large

diameters and high operating pressures, in November 2021. PHMSA published the final of the three components of the Mega Rule in August 2022,

which took effect in May 2023. The final rule applies to onshore gas transmission pipelines, and clarifies integrity management regulations, expands

corrosion control requirements, mandates inspection after extreme weather events, and updates existing repair criteria for both HCA and non-HCA

pipelines. Finally, PHMSA published a Notice of Proposed Rulemaking regarding more stringent gas pipeline leak detection and repair requirements to

reduce natural gas emissions on May 18, 2023.

At this time, we cannot predict the cost of such requirements, but they could be significant. Moreover, federal and state legislative and regulatory

initiatives relating to pipeline safety that require the use of new or more stringent safety controls or result in more stringent enforcement of applicable

legal requirements could subject us to increased capital costs, operational delays and costs of operation.

Moreover as of January 2023, the maximum civil penalties PHMSA can impose are $257,664 per pipeline safety violation per day, with a maximum of

$2,576,627 for a related series of violations. The safety enhancement requirements and other provisions of the 2011 Pipeline Safety Act as well as any

implementation of PHMSA regulations thereunder or any issuance or reinterpretation of guidance by PHMSA or any state agencies with respect thereto

could require us to install new or modified safety controls, pursue additional capital projects or conduct maintenance programs on an accelerated basis,

any or all of which tasks could result in our incurring increased operating costs that could have a material adverse effect on our results of operations or

financial position. States are also pursuing regulatory programs intended to safely build pipeline infrastructure. The adoption of new or amended

regulations by PHMSA or the states that result in more stringent or costly pipeline integrity management or safety standards could have a significant

adverse effect on us and similarly situated midstream operators.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted

by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, and more recently, the Israel-Hamas war.

Our business may be adversely affected by any negative impact on the global economy and capital markets resulting from the conflict

in Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict

between Russia and Ukraine. In February 2022, a full-scale military invasion of Ukraine by Russian troops transpired. Although the length and impact of

the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led, and could continue to lead, to market disruptions, including

significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

Additionally, on October 7, 2023, Hamas, a U.S. designated terrorist organization, launched a series of coordinated attacks from the Gaza Strip onto

Israel. On October 8, 2023, Israel formally declared war on Hamas, and the armed conflict is ongoing as of the date of this filing. Hostilities between

Israel and Hamas could escalate and involve surrounding countries in the Middle East. We are actively monitoring the situation in Ukraine and Israel and

assessing their impact on our business. To date we have not experienced any material interruptions in our infrastructure, supplies, technology systems

or networks needed to support our operations given our operating areas are exclusively located within the Appalachian Region and Central Region of the

U.S. We have no way to predict the progress or outcome of the conflicts in Ukraine or Israel or their impacts in Ukraine, Russia, Belarus, Israel or the

Gaza Strip as the conflicts, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the

military actions, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and

our business for an unknown period of time. Any of the aforementioned factors could affect our business, financial condition and results of operations.

Any such disruptions may also magnify the impact of other risks described in this Annual Report & Form 20-F.

Risks Relating to Our Financing, Acquisitions, Investment and Indebtedness

Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to

enter into future debt financing.

Inflation can adversely affect us by increasing costs of materials, equipment, labor and other services. In addition, inflation is often accompanied by

higher interest rates. Continued inflationary pressures could impact our profitability. Though we believe that the rates of inflation in recent years,

including the 12 months ended December 31, 2024, have not had a significant impact on our operations, a continued increase in inflation, including

inflationary pressure on labor, could result in increases to our operating costs, and we may be unable to pass these costs on to our customers. These

inflationary pressures could also adversely impact our ability to procure materials and equipment in a cost-effective manner, which could result in

reduced margins and production delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and

adversely affected. We continue to undertake actions and implement plans to address these inflationary pressures and protect the requisite access to

materials and equipment. With respect to our costs of capital, our ABS Notes (as defined in the Notes to the Group Financial Statements) are fixed-rate

instruments (subject to adjustment pursuant to the sustainability-linked features described in Note 21 in the Notes to the Group Financial Statements)

and as of December 31, 2024 we had $284 million outstanding on our Credit Facility. Nevertheless, inflation may also affect our ability to enter into

future debt financing, including refinancing of our Credit Facility or issuing additional SPV-level asset backed securities, as high inflation may result in a

relative increase in the cost of debt capital.

We are taking efforts to mitigate inflationary pressures, by working closely with other suppliers and service providers to ensure procurement of materials

and equipment in a cost-effective manner. However, these mitigation efforts may not succeed or may be insufficient.

Concerns about global economic growth have had a significant adverse impact on global financial markets and commodity prices. If the economic

climate in the United States or abroad deteriorates, worldwide demand for petroleum products could diminish further, which could impact the price at

which natural gas, NGLs and oil can be sold, which could affect our results of operations, financial condition, cash flows and prospects.

There are risks inherent in our acquisitions of natural gas and oil assets.

Acquisitions are an essential part of our strategy for protecting and growing cash flow, particularly in relation to the risk that some of our wells may

have a higher than anticipated production decline rate. Over the past several years, we have undertaken a number of acquisitions of natural gas and oil

assets (and of companies holding such assets). Our ability to complete future acquisitions will depend on us being able to identify suitable acquisition

candidates and negotiate favorable terms for their acquisition, in each case, before any attractive candidates are purchased by other parties such as

private equity firms, some of whom have substantially greater financial and other resources than we do. We may face competition for attractive

acquisition targets that may also increase the price of the target business. As a result, there is no assurance that we will always be able to source and

execute acquisitions in the future at attractive valuations.

Furthermore, to further our growth, we have made acquisitions outside the Appalachian Region, a region in which we have developed our operational

experience into the Bossier and Haynesville shales, the Barnett Shale Play, and the Cotton Valley and Mid-Continent producing areas. Accordingly, an

acquisition in a new area in which we lack experience may present unanticipated risks and challenges that were not accounted for or previously

experienced. Ordinarily, our due diligence efforts are focused on higher valued and material properties or assets. Even an in-depth review of all

properties and records may not reveal all existing or potential problems, nor will such review always permit a buyer to become sufficiently familiar with

the properties to fully assess their deficiencies and capabilities. Generally, physical inspections are not performed on every well or facility, and structural

or environmental problems are not necessarily observable even when an inspection is undertaken.

There can be no assurance that our prior acquisitions or any other potential acquisition will perform operationally as anticipated or be profitable. We

could fail to appropriately value any acquired business and the value of any business, company or property that we acquire or invest in may actually be

less than the amount paid for it or its estimated production capacity. We may be required to assume pre-closing liabilities with respect to an acquisition,

including known and unknown title, contractual, and environmental and decommissioning liabilities, and may acquire interests in properties on an “as is”

basis without recourse to the seller of such interest or the seller may have limited resources to provide post-sale indemnities.

In addition, successful acquisitions of gas and oil assets require an assessment of a number of factors, including estimates of recoverable reserves, the

time of recovering reserves, exploration potential, future natural gas, NGLs and oil prices and operating costs. Such assessments are inexact, and we

cannot guarantee that we make these assessments with a high degree of accuracy. In connection with assessments, we perform a review of the

acquired assets. However, such a review will not reveal all existing or potential problems. Furthermore, review may not permit us to become sufficiently

familiar with the assets to fully assess their deficiencies and capabilities.

Integrating operations, technology, systems, management, back office personnel and pre- or post-completion costs for future acquisitions may prove

more difficult or expensive than anticipated, thereby rendering the value of any company or assets acquired less than the amount paid. We may also


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

take on unexpected liabilities which are uncapped, have to undertake unanticipated capital expenditures in connection with a new acquisition or provide

uncapped liabilities in connection with the purchase and sale of assets, which are customary in such agreements. The integration of acquired businesses

or assets requires significant time and effort on the part of our management. Following such integration efforts, prior acquisitions may still not achieve

the level of financial or operational performance that was anticipated when they were acquired. In addition, the integration of new acquisitions can be

difficult and disrupt our own business because our operational and business culture may differ from the cultures of the acquired businesses, unpopular

cost-cutting measures may be required, internal controls may be more difficult to maintain and control over cash flows and expenditures may be difficult

to establish. If we encounter any of the foregoing issues in relation to one of our acquisitions this could have a material adverse effect on our business,

results of operations, financial condition, cash flows or prospects.

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may

disrupt our business and hinder our ability to grow.

In the future we may make acquisitions of businesses that complement or expand our current business. However, we may not be able to identify

attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so

on commercially acceptable terms.

The success of any completed acquisition will depend on our ability to integrate effectively the acquired business into our existing operations. The

process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and

financial resources. In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier

acquisitions. No assurance can be given that we will be able to identify additional suitable acquisition opportunities, negotiate acceptable terms, obtain

financing for acquisitions on acceptable terms or successfully acquire identified targets. Our failure to achieve consolidation savings, to integrate the

acquired businesses and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material

adverse effect on our financial condition and results of operations.

Our Credit Facility also limits our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses.

The Group’s success will be dependent upon its ability to fully integrate Maverick and deliver the value of the combined underlying

businesses; the full financial benefits expected from the Group may not be fully achieved.

The Group and Maverick have previously operated independently and there can be no assurance that their businesses can be fully integrated effectively.

The success of the combined business will depend, in part, on the effectiveness of the integration process and the ability to realize the anticipated

financial benefits from combining the respective businesses.

While the Group believes that the financial benefits of the Maverick acquisition and the costs associated with the Maverick acquisition have been

reasonably estimated, unanticipated events or liabilities may arise or become apparent which may, in turn, result in a delay or reduction in the benefits

anticipated to be derived from the Maverick acquisition, or in costs significantly in excess of those estimated. No assurance can be given that the

integration process will deliver all or substantially all of the expected benefits or realize any such benefits within the assumed timeframe, or that the

costs to integrate and achieve the financial benefits will not be higher than anticipated.

Further, the demands that the integration process may have on management time could result in diversion of the attention of the Group's management

and employees from ongoing operations, pursuing other potential business opportunities and may cause a delay in other projects currently

contemplated by the Group. To the extent that the combined company is unable to efficiently integrate the operations of the Group and Maverick,

realize anticipated financial benefits, retain key personnel and avoid unforeseen costs or delay, there may be a material adverse effect on the business,

results of operations, financial condition, cash flows or prospects of the Group.

We may not have good title to all our assets and licenses.

Although we believe that we take due care and conduct due diligence on new acquisitions in a manner that is consistent with industry practice, there

can be no assurance that we have good title to all our assets and the rights to develop and produce natural gas and oil from our assets. Such reviews

are inherently incomplete and it is generally not feasible to review in depth every individual well or field involved in each acquisition. There can be no

assurance that any due diligence carried out by us or by third parties on our behalf in connection with any assets that we acquire will reveal all of the

risks associated with those assets, and the assets may be subject to preferential purchase rights, consents and title defects that were not apparent at

the time of acquisition. We may acquire interests in properties on an “as is” basis without recourse to the seller of such interest or the seller may have

limited resources to provide post-sale indemnities. In addition, changes in law or change in the interpretation of law or political events may arise to

defeat or impair our claim to certain properties which we currently own or may acquire which could result in a material adverse effect on our business,

results of operations, financial condition, cash flows or prospects.

The issuance of additional ordinary shares in the Group in connection with acquisitions or other growth opportunities, any share

incentive or share option plan or otherwise may dilute all other shareholdings.

We may seek to raise financing to fund future acquisitions and other growth opportunities. We may, for these and other purposes, issue additional

equity or convertible equity securities. As a result, existing holders of ordinary shares may suffer dilution in their percentage ownership or the market

price of the ordinary shares may be adversely affected. For example, consideration for the Maverick acquisition included the issuance of 21,194,213 new

ordinary shares directly to the unitholders of Maverick.

As of December 31, 2024, we have issued options under our equity incentive plans to employees and executive directors for a total of 153,631 new

ordinary shares of the Group, all of which are currently outstanding, and have also entered into restricted stock unit agreements and performance stock

unit agreements with certain employees, of which 976,222 restricted stock units and 965,303 performance stock units are outstanding, as of said date.

We may, in the future, issue further options and/or warrants to subscribe for new ordinary shares to certain advisers, employees, directors, senior

management and/or consultants of the Group. The exercise of any such options would result in a dilution of the shareholdings of other investors.

Subject to any applicable pre-emption rights, any future issues of ordinary shares by the Group may have a dilutive effect on the holdings of

shareholders and could have a material adverse effect on the market price of ordinary shares as a whole.

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

Our Credit Facility and other debt agreements contain a number of significant covenants that may limit our ability to, among other things:

•Incur additional indebtedness;

•Incur liens;


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

•Sell assets;

•Make certain debt payments;

•Enter into agreements that restrict or prohibit the payment of dividends;

•Limits our subsidiaries’ ability to make certain payments with respect to their equity, based on the pro forma effect thereof on certain financial

ratios, which would be the source of distributable profits from which we may issue a dividend; and

•Conduct hedging activities.

In addition, our Credit Facility and other debt agreements require us to maintain compliance with certain financial covenants.

We may also be prevented from taking advantage of business opportunities that arise because of the limitations from the restrictive covenants under

our Credit Facility. These restrictions may limit our ability to obtain future financings to withstand a future downturn in our business or the economy in

general, or to otherwise conduct necessary corporate activities.

A material uncured breach of any covenant in our Credit Facility and other debt agreements will result in a default under the agreement and may result

in an event of default if such default is not cured during any applicable grace period. An event of default, if not waived, could result in acceleration of

the indebtedness outstanding and in an event of default with respect to, and an acceleration of, the indebtedness outstanding under any other debt

agreements to which we are a party. Any such accelerated indebtedness would become immediately due and payable. If that occurs, we may not be

able to make all of the required payments or borrow sufficient funds to refinance such indebtedness. Even if new financing were available at that time, it

may not be on terms that are acceptable to us.

Any significant reduction in our borrowing base under our Credit Facility as a result of periodic borrowing base redeterminations or

otherwise may negatively impact our ability to fund our operations.

Our Credit Facility limits the amounts we can borrow up to a borrowing base amount, which the lenders, in their sole discretion, unilaterally determine

based upon our reserve reports for the applicable period and other data and reports. Such determinations will be made on a regular basis semi-annually

(each a “Scheduled Redetermination”) and at the option of the lenders with more than 66.6% of the loans and commitments under the Credit Facility,

no more than one time in between each Scheduled Redetermination. As of the date of this report, our borrowing base is $900 million.

In the future, we may not be able to access adequate funding under our Credit Facility as a result of a decrease in our borrowing base due to the

issuance of new indebtedness, the outcome of a borrowing base redetermination, or an unwillingness or inability on the part of lending counterparties to

meet their funding obligations and the inability of other lenders to provide additional funding to cover a defaulting lender’s portion. Declines in

commodity prices from their current levels could result in a determination to lower the borrowing base and, in such a case, we could be required to

repay any indebtedness in excess of the redetermined borrowing base. As a result, we may be unable to make acquisitions or otherwise carry out

business plans, which could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

The securitizations of our limited purpose, bankruptcy-remote, wholly owned subsidiaries may expose us to financing and other risks,

and there can be no assurance that we will be able to access the securitization market in the future, which may require us to seek

more costly financing.

Through limited purpose, bankruptcy-remote, wholly owned subsidiaries (“SPVs”), we have securitized and expect to securitize in the future, certain of

our assets to generate financing. In such transactions, we convey a pool of assets to an SPV, that, in turn, issues certain securities or enters into certain

debt agreements. The securities issued by the SPVs are each collateralized by a pool of assets. In exchange for the transfer of finance receivables to the

SPV, we typically receive the cash proceeds from the sale of the securities or entering into term loans.

Although our SPVs have successfully completed securitizations in connection with the ABS IV Notes, ABS VI Notes, ABS VII Notes, ABS VIII Notes (which

now covers ABS III Notes and ABS V Notes), ABS IX Notes, and ABS X Notes (which now covers Term Loan I, ABS I Notes, and ABS II Notes) (each as

defined herein), there can be no assurance that we, through our SPVs, will be able to complete additional securitizations, particularly if the securitization

markets become constrained. In addition, the value of any securities that our limited purpose, bankruptcy-remote, wholly owned subsidiaries retain in

our securitizations, including securities retained to comply with applicable risk retention rules, might be reduced or, in some cases, eliminated as a result

of an adverse change in economic conditions or the financial markets. In addition, our ABS IV Notes, ABS VI Notes, ABS VII Notes, ABS VIII Notes

(which now covers ABS III Notes and ABS V Notes), ABS IX Notes, and ABS X Notes (which now covers Term Loan I, ABS I Notes, and ABS II Notes)

are subject to customary accelerated amortization events, including events tied to the failure to maintain stated debt service coverage ratios.

If it is not possible or economical for us to securitize our assets in the future, we would need to seek alternative financing to support our operations and

to meet our existing debt obligations, which may be less efficient and more expensive than raising capital via securitizations and may have a material

adverse effect on our results of operations, financial condition, cash flows and liquidity.

An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability, decrease our

liquidity and impact our solvency.

Our Credit Facility provides for, and our future debt agreements may provide for, debt incurred thereunder to bear interest at variable rates. As of

December 31, 2024, we had $284 million outstanding on our Credit Facility. Increases in interest rates would increase the cost of servicing indebtedness

under our Credit Facility or under future debt agreements subject to interest at variable rates, and materially reduce our profitability, decrease our

liquidity and impact our solvency.

Our hedging activities could result in financial losses or could reduce our net income.

To achieve more predictable cash flows, we employ a hedging strategy involving opportunistically hedging a majority of our first two years of production

as well as hedging a significant percentage of production beyond our first two years of forecasted production. Even so, the remainder of our production

that is unhedged is exposed to the continuing and prolonged declines in the prices of natural gas, NGLs and oil. Our results of operations and financial

condition would be negatively impacted if the prices of natural gas, NGLs or oil were to remain depressed or decline materially from current levels. To

achieve more predictable cash flows and to reduce our exposure to fluctuations in the prices of natural gas, NGLS and oil, we may enter into additional

hedging arrangements for a significant portion of our production.

Our derivative contracts may result in substantial gains or losses. For example, we reported an operating loss of $43 million for the year ended

December 31, 2024, compared with an operating profit of $1,161 million for the year ended December 31, 2023 and an operating loss of $671 million

for the year ended December 31, 2022. While our earnings are impacted by a variety of factors as described in Results of Operations, a key driver of our

year-over-year change from an operating profit to loss was attributable to a change of $1,095 million in the mark-to-market valuation adjustment on our


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

derivative financial instrument valuations to $189 million loss in 2024 from $906 million gain in 2023. There can be no assurance that we will not realize

additional losses due to our hedging activities in the future. In addition, if we enter into any derivative contracts and experience a sustained material

interruption in our production, we might be forced to satisfy all or a portion of our hedging obligations without the benefit of the cash flows from our

sale of the underlying physical commodity, resulting in a substantial diminution of our liquidity. Our ability to use hedging transactions to protect us from

future natural gas, NGL and oil price volatility will be dependent upon natural gas, NGL and oil prices at the time we enter into future hedging

transactions and our future levels of hedging and, as a result, our future net cash flows may be more sensitive to commodity price changes. In addition,

if commodity prices remain low, we will not be able to replace our hedges or enter into new hedges at favorable prices.

Our price hedging strategy and future hedging transactions will be determined at our discretion, subject to the terms of certain agreements governing

our indebtedness. The prices at which we hedge our production in the future will be dependent upon commodity prices at the time we enter into these

transactions, which may be substantially higher or lower than current prices. Accordingly, our price hedging strategy may not protect us from significant

declines in prices received for our future production. Conversely, our hedging strategy may limit our ability to realize cash flows from commodity price

increases. It is also possible that a substantially larger percentage of our future production will not be hedged as compared with the next few years,

which would result in our natural gas, NGL and oil revenues becoming more sensitive to commodity price fluctuations.

The failure of our hedge counterparties to meet their obligations to us may adversely affect our financial results.

An attendant risk exists in hedging activities that the counterparty in any derivative transaction cannot or will not perform under the instrument and that

we will not realize the benefit of the hedge. Disruptions in the financial markets could lead to sudden decreases in a counterparty’s liquidity, which could

make them unable to perform under the terms of the derivative contract and we may not be able to realize the benefit of the derivative contract. Any

default by the counterparty to these derivative contracts when they become due would have a material adverse effect on our results of operations,

financial condition, cash flows and prospects.

We may not be able to enter into commodity derivatives on favorable terms or at all.

To achieve a more predictable cash flow, we employ a hedging strategy involving opportunistically hedging a majority of our first two years of

production as well as hedging a significant percentage of production beyond our first two years of forecasted production. If we are unable to maintain

sufficient hedging capacity with our counterparties, we could have greater exposure to changes in commodity prices and interest rates, which could

have a material adverse impact on our business, results of operations, financial condition, cash flows or prospects.

Risks Relating to Legal, Tax, Environmental and Regulatory Matters

We are subject to regulation and liability under environmental, health and safety regulations, the violation of which may affect our

financial condition and operations.

We operate in an industry that has certain inherent hazards and risks, and consequently we are subject to stringent and comprehensive laws and

regulations, especially with regard to the protection of health, safety and the environment. For example, we are subject to laws and regulations related

to occupational safety and health, hydraulic fracturing activities, air emissions, soil and water quality, the protection of threatened and endangered plant

and animal species, biodiversity and ecosystems, and the safety of our assets and employees. Although we believe that we have adequate procedures in

place to mitigate operational risks, there can be no assurances that these procedures will be adequate to address every potential health, safety and

environmental hazard, and a failure to adequately mitigate risks may result in loss of life, injury, or adverse impacts on the health of employees,

contractors and third-parties or the environment. Any failure by us or one of our subcontractors, whether inadvertent or otherwise, to comply with

applicable legal or regulatory requirements may give rise to civil, administrative and/or criminal liabilities, civil fines and penalties, delays or restrictions

in acquiring or disposing of assets and/or delays in securing or maintaining required permits, licenses and approvals. Further, a lack of regulatory

compliance may lead to denial, suspension, or termination of permits, licenses, or approvals that are required to operate our sites or could result in

other operational restrictions or obligations. Our health, safety and environmental policies require us to observe local, state and national legal and

regulatory requirements and to apply generally accepted industry best practices where legislation or regulation does not exist.

The terms and conditions of licenses, permits, regulatory orders, approvals or permissions may include more stringent operational, environmental and/or

health and safety requirements. Obtaining development or production licenses and permits may become more difficult or may be delayed due to federal,

regional, state or local governmental constraints, considerations, or requirements on issuing. Furthermore, third-parties such as environmental NGOs

may administratively or judicially contest or protest licenses and permits already granted by relevant authorities or applications for the same and

operations may be subject to other administrative or judicial challenges.

In addition, under certain environmental laws and regulations, we could be subject to joint and several strict liability for the removal or remediation of

previously released materials, pollution, or property contamination regardless of whether we were responsible for the release or contamination or

whether the operations were in compliance with all applicable laws at the time those actions were taken. Private parties, including the owners of

properties on or adjacent to well sites and facilities where petroleum hydrocarbons or wastes are taken for reclamation or disposal, may also have the

right to pursue legal actions as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property

damage. In addition, the risk of accidental spills or releases of pollutants or contaminants could expose us to significant liabilities that could have a

material adverse effect on our business, financial condition and results of operations.

We incur, and expect to continue to incur, capital and operating costs in an effort to comply with increasingly complex operational health and safety and

environmental laws and regulations. New laws and regulations, the imposition of more stringent requirements in permits and licenses, increasingly strict

enforcement of, or new interpretations of, existing laws, regulations and permits and licenses, or the discovery of previously unknown contamination or

hazards may require further costly expenditures to, for example:

•Modify operations, including an increase in plugging and abandonment operations;

•Install or upgrade pollution or emissions control equipment;

•Perform site clean ups, including the remediation and reclamation of gas and oil sites;

•Curtail or cease certain operations;

•Provide financial securities, bonds, and/or take out insurance; or

•Pay fees or fines or make other payments for pollution, discharges to the environment or other breaches of environmental or health and safety

requirements or consent agreements with regulatory agencies.

We cannot predict with any certainty the full impact of any new laws, regulations, or policies on our operations or on the cost or availability of insurance

to cover the risks associated with such operations. The costs of such measures and liabilities related to potential operational health and safety or


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

environmental risks associated with the Group may increase, which could materially and adversely affect our business, results of operations, financial

condition, cash flows or prospects. In addition, it is not possible to predict what future operational health and safety or environmental laws and

regulations will be enacted or how current or future operational, health, safety or environmental laws and regulations will be applied or enforced. We

may have to incur significant expenditure for the installation and operation of additional systems and equipment for monitoring and carry out remedial

measures in the event that operational health and, safety and environmental regulations become more stringent or costly reform is implemented by

regulators. Any such expenditure may have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

No assurance can be given that compliance with occupational health and safety and environmental laws or regulations in the regions where we operate

will not result in a curtailment of production or a material increase in the cost of production or development activities.

Increasing attention to sustainability matters may impact our business and financial results.

Increasing attention has been given to corporate activities related to sustainability matters in public discourse and the investment community. A number

of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public

companies related to sustainability matters, including through the investment and voting practices of investment advisers, public pension funds, activist

investors, universities and other members of the investing community. These activities include increasing attention and demands for action related to

climate change and promoting the use of alternative forms of energy. These activities may result in demand shifts for oil and natural gas products and

additional governmental investigations and private litigation against us. In addition, stakeholder views continue to evolve and vary, and our initiatives

related to these matters are unlikely to satisfy all stakeholders. Our failure to comply with evolving investor or customer expectations and standards

(which may support or disfavor sustainability initiatives) or if we are perceived to not have responded appropriately to the growing concern for

sustainability issues, regardless of whether there is a legal requirement to do so, could cause reputational harm to our business, increase our risk of

litigation, and could have a material adverse effect on our results of operation.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings systems for

evaluating companies on their approach to sustainability matters. These ratings are used by some investors to inform their investment and voting

decisions. Unfavorable sustainability ratings may lead to increased negative investor sentiment toward us and our industry and to the diversion of

investment to other companies or industries, which could have a negative impact on our stock price and our access to and costs of capital. Also,

institutional lenders may decide not to provide funding for oil and natural gas companies based on climate change related concerns, which could affect

our access to capital for potential growth projects.

The U.S. administration, acting through the executive branch and/or in coordination with Congress, could enact or rescind rules and

regulations that may impact our operations.

Governmental, scientific and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the

United States, including climate change-related commitments and skepticism expressed by some political candidates who are now, or may in the future

be, in political office.

While our operations are largely not conducted on federal lands, we may in the future consider acquisitions of natural gas and oil assets located in areas

in which the development of such assets would require permits and authorizations to be obtained from or issued by federal agencies. To conduct these

operations, we may be required to file applications for permits, seek agency authorizations and comply with various other statutory and regulatory

requirements. Further, new oil and gas leasing on public lands has been the subject of recent proposed executive action rescinding climate change-

related initiatives and requirements by the prior Administration. Complying with these evolving requirements may adversely affect our ability to conduct

operations at the costs and in the time periods anticipated, and may consequently adversely impact our anticipated returns from our operations.

Any such measures or increased costs could have a material adverse effect on our business, results of operations, financial condition, cash flows or

prospects.

Our operations are dependent on our compliance with obligations under permits, licenses, contracts and field development plans.

Our operations must be carried out in accordance with the terms of permits, licenses, operating agreements, annual work programs and budgets. Fines,

penalties, or enforcement actions may be imposed and a permit or license may be suspended or terminated if a permit or license holder, or party to a

related agreement, fails to comply with its obligations under such permit, license or agreement, or fails to make timely payments of levies and taxes for

the licensed activity, or fails to provide the required geological information or meet other reporting requirements. It may from time to time be difficult to

ascertain whether we have complied with obligations under permits or licenses as the extent of such obligations may be unclear or ambiguous and

regulatory authorities in jurisdictions in which we do business, or in which we may do business in the future, may not be forthcoming with confirmatory

statements that work obligations have been fulfilled, which can lead to further operational uncertainty.

In addition, we and our commercial partners, as applicable, have obligations to operate assets in accordance with specific requirements under certain

licenses and related agreements, field development agreements, laws and regulations. If we or our partners were to fail to satisfy such obligations with

respect to a specific field, the license or related agreements for that field may be suspended, revoked or terminated. Although we have in the past

acquired and may in the future acquire shale assets, a significant source of our natural gas and crude oil remains conventional wells. In some instances,

these conventional wells are located on the same property as unconventional wells that produce shale oil. In these cases, the rights to access the shale

layers of the property will typically be conditioned on the ongoing productivity of conventional wells on the property. Furthermore, the shale rights may

be owned by a third party, and in such instances, we will enter into a joint use agreement with the third party. This joint use agreement may stipulate

that in consideration for permission to operate the conventional wells, we are to use reasonable efforts to maintain production so that the third party

retains the shale licenses. If we fail to maintain production in the conventional wells, under the joint use agreement, we may be liable to the third party for

replacing the lost land rights. The relevant authorities are typically authorized to, and do from time to time, inspect to verify compliance by us or our

commercial partners, as applicable, with relevant laws and the licenses or the agreements pursuant to which we conduct our business. There can be no

assurance that the views of the relevant government agencies regarding the development of the fields that we operate or the compliance with the terms of

the licenses pursuant to which we conduct such operations will coincide with our views, which might lead to disagreements that may not be resolved.

The suspension, revocation, withdrawal or termination of any of the permits, licenses or related agreements pursuant to which we may conduct

business, as well as any delays in the continuous development of or production at our fields caused by the issues detailed above could materially and

adversely affect our business, results of operations, financial condition, cash flows or prospects. In addition, failure to comply with the obligations under

the permits, licenses or agreements pursuant to which we conduct business, whether inadvertent or otherwise, may lead to fines, penalties, restrictions,

enforcement actions brought by governmental authorities, withdrawal of licenses and termination of related agreements.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

We do not insure against certain risks and our insurance coverage may not be adequate for covering losses arising from potential

operational hazards and unforeseen interruptions.

We insure our operations in accordance with industry practice and plan to continue to insure the risks we consider appropriate for our needs and

circumstances. However, we may elect not to have insurance for certain risks, due to the high premium costs associated with insuring those risks or for

various other reasons, including an assessment in some cases that the risks are remote.

Our insurance may not be adequate to cover all losses or liabilities we may suffer. We cannot assure that we will be able to obtain insurance coverage

at reasonable rates (or at all), or that any coverage we or the relevant operator obtain, and any proceeds of insurance, will be adequate and available to

cover any claims arising. We may become subject to liability for pollution, blow-outs or other hazards against which we have not insured or cannot

insure, including those in respect of past activities for which we were not responsible. Any indemnities we may receive from sub-contractors, operators

or joint venture partners may be difficult to enforce if such sub-contractors, operators or joint venture partners lack adequate resources.

Operational insurance policies are usually placed in one year contracts and the insurance market can withdraw cover for certain risks due to events

occurring in other parts of the industry, thus greatly increasing the costs of risk transfer. For example, in September 2018, a gas pipeline operated by

another midstream company exploded in Beaver County, Pennsylvania, a state in which we have operations. The explosion resulted in the destruction of

residential property and motor vehicles as well as the evacuation of nearby households. Catastrophic events such as these may cause the insurance

costs for our midstream operations to rise, despite us not being involved in the catastrophic event. In the event that insurance coverage is not available

or our insurance is insufficient to fully cover any losses, including losses incurred due to lost revenues resulting from third party operations or processing

plants, claims and/or liabilities incurred, or indemnities are difficult to enforce, our business and operations, financial results or financial position may be

disrupted and adversely affected.

The payment by our insurers of any insurance claims may result in increases in the premiums payable by us for our insurance coverage and could

adversely affect our financial performance. In the future, some or all of our insurance coverage may become unavailable or prohibitively expensive.

Our internal systems and website may be subject to intentional and unintentional disruption, and our confidential information may be

misappropriated, stolen or misused, which could adversely impact our reputation and future sales.

We have faced, and may in the future continue to face, cyber-attacks and data security breaches. Such cyber-attacks and breaches are designed to

penetrate our network security or the security of our internal systems, misappropriate proprietary information and/or cause interruptions to our services,

and we expect to continue to face similar threats in the future. We cannot guarantee that we will be able to successfully prevent all attacks in the future.

Such future attacks could include hackers obtaining access to our systems, the introduction of malicious computer code or denial of service attacks. If an

actual or perceived breach of our network security occurs, it could adversely affect our business or reputation, and may expose us to the loss of

information, litigation and possible liability. An actual security breach could also impair our ability to operate our business and provide products and

services to our customers. Additionally, malicious attacks, including cyber-attacks, may damage our assets, prevent production at our producing assets

and otherwise significantly affect corporate activities. For example, we utilize electronic monitoring of meters and flow rate devices to monitor pressure

build-up in our production wells. If there were a cyber-attack that penetrated our monitoring systems such that they provided false readings, this could

result in an unknown pressure build-up, creating a dangerous situation which could end up in an explosion. As techniques used to obtain unauthorized

access to or to sabotage systems change frequently and may not be known until launched against us or our third-party service providers, we may be

unable to anticipate or implement adequate measures to protect against these attacks and our service providers may likewise be unable to do so. Such

an outcome would have a material adverse impact on our business, results of operations, financial condition, cash flows or prospects.

In addition, confidential or financial payment information that we maintain may be subject to misappropriation, theft and deliberate or unintentional

misuse by current or former employees, third-party contractors or other parties who have had access to such information. Any such misappropriation

and/or misuse of our information could result in the Group, among other things, being in breach of certain data protection requirements and related

legislation as well as incurring liability to third parties. We expect that we will need to continue closely monitoring the accessibility and use of

confidential information in our business, educate our employees and third-party contractors about the risks and consequences of any misuse of

confidential information and, to the extent necessary, pursue legal or other remedies to enforce our policies and deter future misuse. If our confidential

information is misappropriated, stolen or misused as a result of a disruption to our website or internal systems this could have a material adverse effect

on our business, results of operations, financial condition, cash flows or prospects.

Although we maintain insurance to protect against losses resulting from certain of data protection breaches and cyber-attacks, our coverage for

protecting against such risks may not be sufficient.

Our operations are subject to the risk of litigation.

From time to time, we may be subject, directly or indirectly, to litigation arising out of our operations and the regulatory environments in our areas of

operations. Historically, categories of litigation that we have faced included actions by royalty owners over payment disputes, personal injury claims and

property related claims, including claims over property damage, trespass or nuisance. Although we currently face no material litigation that is reasonably

expected to have an adverse material impact for which we are not sufficiently indemnified or insured, damages claimed under such litigation in the

future may be material or may be indeterminate, and the outcome of such litigation, if determined adversely to us, could individually or in the

aggregate, be reasonably expected to have a material and adverse effect on our business, financial position or results of operations. While we assess

the merits of each lawsuit and defend ourselves accordingly, we may be required to incur significant expenses or devote significant resources to defend

against such litigation. In addition, the adverse publicity surrounding such claims may have a material adverse effect on our business.

We are subject to certain tax risks.

Any change in our tax status or in taxation legislation in the United Kingdom or the United States could affect our ability to provide returns to

shareholders. Statements in this document concerning the taxation of holders of our ordinary shares are based on current law and practice, which is

subject to change.

We are subject to income taxes in the United Kingdom and the United States, and there can be no certainty that the current taxation regime in the

United Kingdom, the United States or other jurisdictions within which we currently operate or may operate in the future will remain in force or that the

current levels of corporation taxation will remain unchanged. For example, the U.S. government has imposed a minimum tax on corporations and

proposed and may enact significant changes to the taxation of business entities including, among others, an increase in the U.S. federal income tax rate

applicable to corporations, like us, and surtaxes on certain types of income. Certain U.S. localities also maintain a severance tax or impact fee on the

removal of oil and natural gas from the ground and such tax rates may be increased or new severance taxes or impact fees may be implemented. The

United Kingdom announced on May 26, 2022 a new “Energy Profits Levy” on oil and gas exploration and production companies operating in the United


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Kingdom and the UK Continental Shelf at a rate of 25% (subsequently increased to 35% and then to 38% from November 1, 2024). As we do not

operate our exploration, production or extraction activities in the United Kingdom or in the UK Continental Shelf, we do not expect the Energy Profits

Levy to impact our headline corporation tax rate in the United Kingdom, however, the taxation of energy companies remains uncertain, particularly in

the context of current global events, and the future stability of such tax regimes cannot be guaranteed.

Our domestic and international tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our effective tax rate could be adversely

affected by changes in the mix of earnings and losses in taxing jurisdictions with differing statutory tax rates, certain non-deductible expenses, the

valuation of deferred tax assets and liabilities and changes in federal, state or international tax laws and accounting principles. Increases in our effective

tax rate could materially affect our net financial results. Although we believe that our income tax liabilities are reasonably estimated and accounted for in

accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material adverse

effect on our business, results of operations, financial condition, cash flows or prospects.

In the past we have been able to offset a large portion of our U.S. federal income tax burden with marginal well tax credits that are available to

qualified producers who operate lower-volume wells during a low commodity pricing environment. There can be no assurance that there will be no

amendment to the existing taxation laws applicable to us, which may have a material adverse effect on our financial position. Our ability to utilize marginal

well tax credits in the United States could be or become subject to limitations (for example, if we are deemed to undergo an “ownership change” for

applicable U.S. federal income tax purposes).

The nature and amount of tax that we expect to pay and the reliefs expected to be available to us are each dependent upon several assumptions, any

one of which may change and which would, if so changed, affect the nature and amount of tax payable and reliefs available. In particular, the nature

and amount of tax payable may be dependent on the availability of relief under tax treaties and is subject to changes to the tax laws or practice in any

of the jurisdictions we currently are subject to or may be subject to in the future. Any limitation in the availability of relief under these treaties, any

change in the terms of any such treaty or any changes in tax law, interpretation or practice could increase the amount of tax payable by us.

Finally, because we are an entity incorporated in the United Kingdom that is treated as a U.S. corporation for all purposes of U.S. federal income tax

law, any changes in U.S. federal income tax law could negatively impact our effective tax rate and cash flows, which could cause our business, results of

operations, financial condition, cash flows or prospects to be materially adversely affected.

The taxation of an investment in our ordinary shares depends on the individual circumstances of the holders of our ordinary shares. Holders of our

ordinary shares are strongly advised to consult their professional tax advisers.

Tax legislation may be enacted in the future that could negatively impact our current or future tax structure and effective tax rates.

Long-standing international tax initiatives that determine each country’s jurisdiction to tax cross-border international trade and profits are evolving as a

result of, among other things, initiatives such as the Anti-Tax Avoidance Directives, as well as the Base Erosion and Profit Shifting (“BEPS”) reporting

requirements, mandated and/or recommended by the EU, G8, G20 and Organization for Economic Cooperation and Development (“OECD”), including

the imposition of a minimum global effective tax rate for multinational businesses regardless of the jurisdiction of operation and where profits are

generated (Pillar Two). Many countries around the world, including the United Kingdom, have introduced new, or amended existing, tax laws applicable

to multinational businesses to implement Pillar Two. As these and other tax laws and related regulations change (including changes in the interpretation,

approach and guidance of tax authorities), our financial results could be materially impacted. Given the unpredictability of these possible changes and

their potential interdependency, it is difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive or

negative for our earnings and cash flow, but such changes could adversely affect our financial results.

Risks Relating to Our Ordinary Shares

The requirements of being a U.S. listed company, including compliance with the reporting requirements of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase

our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As we became a U.S. listed company in December 2023, we are required to comply with new laws, regulations and requirements, certain corporate

governance provisions of Sarbanes-Oxley Act, related regulations of the SEC and the requirements of the NYSE, with which we were not required to

comply as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of our time and will

significantly increase our costs and expenses. We will need to: institute a more comprehensive compliance function to test and conclude on the

sufficiency of our internal control over financial reporting; comply with rules promulgated by the NYSE; prepare and distribute periodic public reports;

establish new internal policies, such as those relating to insider trading; and involve and retain to a greater degree outside professionals in the above

activities. At any time, we may conclude that our internal controls, once tested, are not operating as designed or that the system of internal controls

does not address all relevant financial statement risks. Compliance with Sarbanes-Oxley Act requirements may strain our resources, increase our costs

and distract management; and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a new U.S. listed company, we are subject to significant regulatory oversight and reporting obligations under U.S. federal securities laws and the

continuous scrutiny of securities analysts and investors. In addition, most members of our management team have limited experience managing a U.S.

listed company, interacting with U.S. public company investors, and complying with the increasingly complex laws pertaining to U.S. listed companies.

Our management team may not successfully or efficiently manage us as a U.S. listed company. These new obligations and constituents require

significant attention from our management team and could divert our management team’s attention away from the day-to-day management of our

business, which could adversely affect our business, results of operations and financial condition.

Further, we expect that, as a new U.S. listed company, being subject to these rules and regulations may make it more difficult and more expensive for

us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher

costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board

of directors or as executive officers. We are currently evaluating these rules, and we cannot predict or estimate the amount of additional costs we may

incur or the timing of such costs.

We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act

reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the

Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the

sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

(ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on

Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant

events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while

U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year.

Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material

information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers,

some investors may find the ordinary shares less attractive, and there may be a less active trading market for the ordinary shares.

To the extent we no longer qualify as a foreign private issuer as of June 30, 2025 (the end of our second fiscal quarter), we would be required to

comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers, which are more

detailed and extensive than the requirements for foreign private issuers, as of January 1, 2026, including the requirement to prepare our financial

statements in accordance with U.S. generally accepted accounting principles. We may also be required to make changes in our corporate governance

practices in accordance with various SEC and NYSE rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to

comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign

private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make

some activities highly time consuming and costly. If we lose foreign private issuer status and are unable to comply with the reporting requirements

applicable to a U.S. domestic issuer by the applicable deadlines, we would not be in compliance with applicable SEC rules or the rules of NYSE, which

could cause investors could lose confidence in our public reports and could have a material adverse effect on the trading price of our ordinary shares.

We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and

expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs

to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that

differ significantly from the corporate governance listing standards of the NYSE. These practices may afford less protection to

shareholders than they would enjoy if we complied fully with the corporate governance listing standards of the NYSE.

As a foreign private issuer listed on the NYSE, we are subject to corporate governance listing standards. However, NYSE rules permit a foreign private

issuer like us to follow the corporate governance practices of its home country in lieu of certain NYSE corporate governance listing standards, provided

that we disclose which requirements that we have not complied with in any year and confirm the UK corporate governance practices we have complied

with. Certain corporate governance practices in the United Kingdom, which is our home country, may differ significantly from the NYSE corporate

governance listing standards. Although we adhere to the higher corporate governance standards of the UK Corporate Governance Code, we could

include non-independent directors as members of our nomination and remuneration committee, and our independent directors would not necessarily

hold regularly scheduled meetings at which only independent directors are present. We may in the future elect to follow home country practices in the

United Kingdom with regard to other matters. Therefore, our shareholders may be afforded less protection than they otherwise would have under the

NYSE corporate governance listing standards applicable to U.S. domestic issuers.

Failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could have a

material adverse effect on our business.

The process of designing and implementing effective internal control over financial reporting is a continuous effort that requires us to anticipate and

react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain internal control over

financial reporting that is adequate to satisfy our reporting obligations as a U.S. listed company. If we are unable to maintain adequate internal control

over financial reporting, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated

financial statements and harm our results of operations. In addition, we are required, pursuant to the rules and regulations of the SEC, to furnish a

report by management on the effectiveness of our internal control over financial reporting. This assessment needs to include disclosure of any material

weaknesses identified by our management in our internal control over financial reporting. Assessing the effectiveness of our internal control over

financial reporting requires significant documentation, testing and possible remediation.

We may not be able to conclude on an annual basis that we have effective internal control over financial reporting or our independent registered public

accounting firm may not issue an unqualified opinion on the effectiveness of our internal control over financial reporting. If either we are unable to

conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to issue an

unqualified opinion on the effectiveness of internal control over financial reporting, investors could lose confidence in our reported financial information,

which could have a material adverse effect on the trading price of our ordinary shares.

We have incurred and will continue to incur increased costs as a result of operating as a public company in the United States, and our

management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a U.S. listed company, we have incurred and will continue to incur significant legal, accounting and other expenses that we did not incur previously.

The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of NYSE and other applicable

securities rules and regulations impose various requirements on non-U.S. reporting public companies, including the establishment and maintenance of

disclosure controls and procedures, internal control over financial reporting and corporate governance practices. Our management and other personnel

will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and

financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may

increase the cost of our director and officer liability insurance.

However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their

application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty

regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

There is no guarantee that we will continue to pay dividends on our ordinary shares in the future.

Our ability and the Board’s decision to pay dividends is dependent upon our performance and financial condition, cash requirements, future prospects,

commodity prices, the performance and dividend yield of our peers, compliance with the financial covenants and restricted payments covenant in our

Credit Facility, profits available for distribution and other factors deemed to be relevant at the time and on the continued health of the markets in which

we operate. Further, subsequent to our listing on the NYSE, while our Board’s evaluation of our ability or need to pay dividends will primarily remain a

question of the foregoing factors, it will also take into account the performance of our ordinary shares, including relative to our peer group. There can

be no guarantee that we will continue to pay dividends in the future on our ordinary shares.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.

We are incorporated under English law. The rights of holders of ordinary shares are governed by English law, including the provisions of the UK

Companies Act 2006 (the “Companies Act 2006”), and by our Articles of Association. These rights differ in certain respects from the rights of

shareholders in typical U.S. corporations. Refer to Memorandum and Articles of Association in this Annual Report & Form 20-F for a description of the

principal differences between the provisions of the Companies Act 2006 applicable to us and, for example, the Delaware General Corporation Law

relating to shareholders’ rights and protections.

Claims of U.S. civil liabilities may not be enforceable against us.

We are incorporated under the laws of the United Kingdom. In addition, certain of our directors and officers reside outside the United States. As a

result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in

U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.

The United States and the United Kingdom do not currently have a treaty providing for recognition and enforcement of judgments (other than

arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not

predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the United Kingdom. In addition, uncertainty exists

as to whether UK courts would entertain original actions brought in the UK against us or our directors or senior management predicated upon the

securities laws of the United States or any state in the United States. Provided that certain requirements are met, a final and conclusive monetary

judgment for a definite sum obtained against us in U.S. courts (that is not a sum payable in respect of taxes or similar charges or in respect of a fine or

a penalty), would be treated by the courts of the UK as a cause of action in itself and sued upon as a debt at common law without any retrial of the

issue. Whether the relevant requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws, including

whether the award of monetary damages under such laws would constitute a penalty, is an issue for the court making such decision. If a UK court gives

judgment for the sum payable under a U.S. judgment, the UK judgment will be enforceable by methods generally available for this purpose. These

methods generally permit the UK court discretion to prescribe the manner of enforcement.

As a result, U.S. investors may not be able to enforce against us or our executive officers, board of directors or certain experts named herein who are

residents of the United Kingdom or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters,

including judgments under the U.S. federal securities laws.

Viability and Going Concern

In accordance with Provision 31 section 4 of the UK Corporate Governance Code, and taking into account our current financial position and principal

risks for a period longer than the 12 months required by the going concern statement, the Senior Leadership Team prepared a viability analysis which

was assessed by the Board for approval.

Assessment Process and Key Assumptions

Our financial outlook is assessed primarily through a detailed annual business planning process and a more general multi-year forecast. The Senior

Leadership Team provides the Board with a detailed overview as part of its annual budget approval while providing regular updates at each Board

meeting throughout the year. The Board uses this information, along with any other detail it requests, to assess our current performance and longer-

term outlook.

The outputs from the business planning process include a set of key performance objectives, an assessment of our primary risks, the anticipated

operational outlook and a set of financial forecasts that consider the sources of funding available to DEC (the “Base Plan”).

Key assumptions, which underpin the annual business planning process, include the forward price strip for each commodity (natural gas, NGLs and oil),

forecasted operating cost and capital expenditure levels, production profiles, and the availability of liquidity or additional financing. We regularly produce

cash flow projections, which we sensitize for different scenarios including, but not limited to, changes in commodity prices and production rates from our

wells. The Directors and Senior Leadership Team closely monitor these forecast assumptions and projections and seek to mitigate our operating and

liquidity risks.

Based on our financial scenario planning process, the Directors and Senior Leadership Team believe that stress testing forecast results over the Base

Plan for a two-year period through March 2027 forms a reasonable expectation of our viability. At least annually, we perform our two-year Base Plan

forecast for our medium-term strategic planning period. The Directors and Senior Leadership Team are confident that they appropriately monitor and

manage operational risks effectively within the two-year Base Plan, and our scenario planning is focused primarily on plausible changes in external

factors, providing a reasonable degree of confidence.

Viability

The principal risks and uncertainties that affect the Directors’ assessment of our viability in this period are:

•The effect of volatile natural gas prices on the business;

•Operational production performance of the producing assets; and

•Operating cost levels and our ability to control costs.

The Base Plan incorporates key assumptions that reflect these principal risks as follows:

•Projected operating cash flows are calculated using a production profile which is consistent with current operating results and decline rates;

•Assumes commodity prices are in line with the current forward curve which considers basis differentials;

•Operating cost levels stay consistent with historical trends which have been recently elevated due to the inflationary environment;

•The financial impact of our current hedging contracts in place, being approximately 86% and 82%, of total production volumes hedged for the

years ending December 31, 2025 and 2026, respectively; and

•The scenario also includes the scheduled principal and interest payments on our current debt arrangements.

To assess our viability, the Directors and Senior Leadership Team considered various scenarios around the Base Plan that primarily reflect a more

severe, but plausible, downside impact of the principal risks, both individually and in the aggregate, as well as the additional capital requirements that

downside scenarios could place on us. Conservatively, our viability statement considered the combined impact of all three listed scenarios in:


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Strategic Report

Scenario 1: Cyclically low gas prices for a year (Henry Hub prices of $2.00 per MMbtu before returning to strip pricing), which have been historically

observed in the market.

Scenario 2: Considered the impact of climate change by assuming a two-week period of lost production in our East Texas/Louisiana region, which is

susceptible to hurricanes, due to a natural disaster (assumed to occur once in each year of the assessment period).

Scenario 3: Considered the impact of climate change by assuming a two-week period of lost production in our Appalachia region (assumption of lost

production in 25% of the total region), which is susceptible to flooding, due to a natural disaster (assumed to occur once in each year of the assessment

period).

The Directors and Senior Leadership Team considered the impact that these principal risks could, in certain circumstances, have on our prospects within

the assessment period, and accordingly appraised the opportunities to actively mitigate the risk of these severe, but plausible, downside scenarios.

Based on their evaluation, the Directors and Senior Leadership Team have a reasonable expectation that we will be able to continue in operation and

meet our liabilities as they fall due during the assessment period.

Going Concern

In assessing our going concern status, we have taken account of our financial position, anticipated future trading performance, borrowings and other

available credit facilities, forecasted compliance with covenants on those borrowings, and capital expenditure commitments and plans. Our cash

generation and liquidity remain adequate and we believe we will be able to operate within existing facilities.

The Directors are satisfied that our forecasts and projections, that take into account reasonably possible changes in trading performance, show that we

have adequate resources to continue in operational existence for at least 12 months from the date of this Annual Report & Form 20-F and that it is

appropriate to adopt the going concern basis in preparing our consolidated financial statements for the year ended December 31, 2024.

The Strategic Report was approved by the Board of Directors and signed on its behalf by:

/s/ David E. Johnson

David E. Johnson

Chairman of the Board

March 17, 2025


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Corporate Governance


	Page
The Chairman’s Governance Statement	52
Governance Framework	52
Our Approach to Governance	55
Board of Directors	57
Senior Management	59
Directors’ Report	60
The Nomination & Governance Committee’s Report	65
The Audit & Risk Committee’s Report	67
The Remuneration Committee’s Report	72
The Sustainability & Safety Committee’s Report	93

The Chairman’s Governance Statement

Dear Shareholder,

As a Board, we have been driving our governance standards towards meeting best practice, and it has been my privilege to work with this Board which

is committed to maintaining high standards of corporate governance. As Chairman of the Group, my role is to provide leadership, ensuring that the

Board performs its role effectively and has the capacity, ability, structure, corporate governance systems and support to enable it to continue to do so.

This Governance section of this Annual Report & Form 20-F provides an update on our Board and Corporate Governance Policy. It includes our UK

Corporate Governance Code compliance statements and the reports of the Board committees, namely the Audit & Risk, Nomination & Governance,

Remuneration, and Sustainability & Safety Committees.

In these reports, we set out our governance structures and explain how we have applied the UK Corporate Governance Code and applicable NYSE and

SEC rules.

/s/ David E. Johnson

David E. Johnson

Chairman of the Board

March 17, 2025

Governance Framework

The Group’s success is directly linked to sound and effective governance and we remain committed to achieving high standards in all we do. The

Directors recognize the importance of strong corporate governance and have developed a corporate governance framework and policies appropriate to

the size of the Group.

As the Group grows, the Directors and Senior Leadership Team continue to review and adjust our approach, make ongoing improvements to the Group’s

corporate governance framework and policies and procedures as part of building a successful and sustainable company.

Good governance creates the opportunity for appropriate decisions to be made by the right people at the right time to support the delivery of our

strategy and manage any risks associated with delivery of that strategy.

Board Agenda and Activities During the Year

The Board is responsible for the direction and overall performance of the Group with an emphasis on policy and strategy, financial results and major

operational issues.

During the year, the matters reserved for the Board’s decision have been reviewed and re-affirmed. Specific matters for the Board’s consideration

include:

•Approval of the Group’s strategic plan;

•Review of the performance of the Group’s strategy, objectives, business plans and budgets;

•Review and assess the Group’s sustainability goals, including the Group’s GHG emission intensity reduction targets;

•Review and assess the Group’s health and safety metrics and goals;

•Approval of the Group’s operating and capital expenditure budgets and any material changes to them;

•Review of material changes to the Group’s corporate structure and management and control structure;

•Review of changes to governance and business policies;

•Monitoring efforts related to community and stakeholder engagement;

•Ensuring an effective system of internal control and risk management;

•Ensure that appropriate succession planning procedures are in-place;

•Approval of annual and interim reports and accounts, and preliminary announcements of year-end results; and

•Review of the effectiveness of the Board and its committees.

The Board delegates matters not reserved for the Board to the Senior Leadership Team.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Board of Directors
Defines business strategy, assesses risks and monitors performance
Remuneration Committee	Sustainability & Safety Committee	Nomination & Governance Committee	Audit & Risk Committee
Responsible for the Group’s remuneration policy, and for setting pay levels and bonuses for senior management in line with individual performance. Ensures safety and sustainability KPIs are included in remuneration packages.	Monitors the Group’s social, ethical, environmental and safety performance, and oversees all sustainable development issues on behalf of the Board.	Ensures a balance of skills, knowledge, independence and experience on the Board and its committees. Monitors the Group’s governance structure.	Supports the Board in monitoring the integrity of the Group’s financial statements and reviews the effectiveness of the Group’s system of internal controls and risk management systems.


CEO
Takes ultimate responsibility for delivering on strategy, financial and operating performance.
	President & Chief Financial Officer	Executive Vice President of Operations	Chief Legal & Risk Officer	Executive Vice President & Investment Officer	Executive Vice President of Energy Marketing	Chief Human Resources Officer
Description of Role	Manages the finance and accounting activities of the Group and ensures that its financial reports are accurate and completed in a timely manner. Oversees the Group’s information technology function to ensure safety and soundness of internal controls and systems.	Coordinates operating activities and sustainability initiatives to ensure transparency and long-term value for DEC’s stakeholders.	Responsible for legal and compliance, government, policy engagement, community engagement and land and mineral owner engagement.	Responsible for identifying and valuing acquisition targets.	Responsible for developing and implementing a commodity marketing strategy to maximize commodity revenues.	Responsible for HR function and employee relations, policies, practices and operations.
Responsibility	Treasury, Accounting & Financial Reporting, Investor Relations, Information Technology & Sustainability Reporting	Operations, EHS & Regulatory	Legal & Compliance, Land, Policy Engagement & Community Relations	Acquisitions	Marketing	Human Resource
Risk Management Guidelines	Employee Handbook, Code of Business Conduct & Ethics, Tax Policy & Anti-Bribery & Corruption Policy	Employee Handbook, Code of Business Conduct & Ethics, EHS Policy, Climate Policy, Socio-Economic Policy & Field Operating Guidelines	Employee Handbook, Code of Business Conduct & Ethics, Anti-Bribery & Corruption Policy, Whistleblowing Policy & Securities Dealing Policy	Employee Handbook, Code of Business Conduct & Ethics & Anti- Bribery & Corruption Policies	Employee Handbook, Code of Business Conduct & Ethics & Anti- Bribery & Corruption Policies	Employee Handbook and Code of Business Conduct & Ethics, Employee Relations, Human Rights, Anti- Bribery & Corruption Policies & Whistleblowing Policy
Stakeholder Engagement Responsibility	Employees, Rating Agencies, Financial Institutions & Debt & Equity Investors	Communities, Employees & Business Partners	Employees, Industry Associations, Communities, Land & Mineral Owners & Government & Regulators	Customers	Customers	Employees & Communities

Board Effectiveness, Composition and Independence

As of December 31, 2024, the Board was comprised of seven Directors being the Group’s CEO, the Non-Executive Chairman (who was independent

upon appointment) and five other Non-Executive Directors, all of whom were deemed Independent Non-Executive Directors under the UK Corporate

Governance Code, except one. As Mr. Thomas has served on the Board for ten years as of January 1, 2025, the Board no longer considers him

independent. In January 2025, Ms. Kerrigan retired from the Board due to other commitments.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

As a foreign private issuer, under the listing requirements and rules of the NYSE, we are not required to have independent directors on our Board,

except that our audit committee is required to consist fully of independent directors, subject to certain phase-in schedules. Our Board has determined

that five of our six Directors do not have a relationship that would interfere with the exercise of independent judgment in carrying out the

responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of the NYSE.

The skills and experience of the Non-Executive Directors are wide and varied and contribute to productive and challenging discussions in the boardroom

ensuring the Board has appropriate independent oversight. For more details on the skills, knowledge and experience of our Board refer to the Directors’

biographies in Board of Directors within this Annual Report & Form 20-F.

With a Non-Executive Chairman, and, as of January 1, 2025, four other Independent Non-Executive Directors, over half of the Board is independent and

the Audit & Risk and Remuneration Committees were completely independent. Female representation at the Board level increased from 29% in

late-2019 to 43% as of December 31, 2024 (three out of seven Board members being female).

Recognizing the importance of workforce engagement, Sandra M. Stash serves as the Director responsible for workforce engagement as required under

the UK Corporate Governance Code. The Non-Executive Director Employee Representative directly engages with employees and provides a forum for

feedback to management. These discussions cover a variety of topics including the Group’s culture, policies and actions. Ms. Stash has served as the

Non-Executive Director Employee Representative since 2019. Further information on her role and the work undertaken can be found in the Directors’

Report within this Annual Report & Form 20-F.

The Board provides effective leadership and overall management of the Group’s affairs. It approves the Group’s strategy and investment plans and

regularly reviews operational and financial performance and risk management matters. A schedule of matters reserved for the Board is included in the

previous section.

The Board and its committees hold regularly scheduled meetings each year. Additional meetings are held when necessary to consider matters of

importance that cannot be held over until the next scheduled meeting.

All Directors have access to the advice and services of the Group’s solicitors and the Group’s Corporate Secretary, who is responsible for ensuring that all

Board procedures are followed. Any Director may take independent professional advice at the Group’s expense in the furtherance of their duties.

In accordance with the UK Corporate Governance Code, the Directors must stand for re-election annually. The Group’s Articles of Association also

require any new Director appointed by the Board during the year to retire at the next Annual General Meeting (“AGM”) and offer themselves for re-

election.

The Board delegates certain responsibilities to the Board committees, listed below, which have clearly defined terms of reference.

These terms of reference are reviewed annually to ensure they remain fit for purpose and can be viewed on the Group’s website.

Board Committees

The Directors have established four Board committees: an Audit & Risk Committee, Remuneration Committee, Nomination & Governance Committee,

and Sustainability & Safety Committee. The members of these committees were constituted in accordance with the requirements of the UK Corporate

Governance Code, as applicable. The terms of reference of the committees have been prepared in line with prevailing best practice, including the

provisions of the Code. A summary of the delegated duties and responsibilities, terms of reference of the committees and their activities for the year are

presented in their committee reports set out below.

Board Composition

The Board’s composition prioritizes a broad range of perspectives, emphasizing professional experience, industry knowledge, and cognitive diversity. In

recent years, the Board has strategically recruited members to enhance these attributes and is now focusing on a period of stability before considering

further additions. Although the Board does not currently have any ethnically diverse members, it acknowledges the UK Listing Rules’ diversity targets,

which the Group intends to continue to closely examine and evaluate in 2025.

In 2024, the Board complied with the UK Listing Rules’ targets of (i) more than 40% female representation on the Board, with 43% of the Board being

female and (ii) a female holding a senior Board position, with Ms. Kerrigan serving as the Senior Independent Director for the entirety through January

24, 2025 and Ms. Stash appointed to that role upon Ms. Kerrigan’s retirement from the Board.

Board and Executive Management Composition

As required to be presented in accordance with UK Listing Rule 6.6.6R(10) as of December 31, 2024:


Gender Identity or Sex(a)	Number of Board Members	Percentage of the Board	Number of Senior Positions on the Board (CEO, CFO, SID & Chair)(a)	Number in Executive Management	Percentage of Executive Management
Male	4	57%	3	6	67%
Female	3	43%	1	3	33%
Other categories	—	—%	—	—	—%
Not specified/prefer not to say	—	—%	—	—	—%


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Ethnic Background	Number of Board Members	Percentage of the Board	Number of Senior Positions on the Board (CEO, CFO, SID & Chair)(a)	Number in Executive Management	Percentage of Executive Management
White British or other White (including minority-white groups)	7	100%	4	9	100%
Mixed/Multiple Ethnic Groups	—	—%	—	—	—%
Asian/Asian British	—	—%	—	—	—%
Black/African/Caribbean/Black British	—	—%	—	—	—%
Other ethnic group, including Arab	—	—%	—	—	—%
Not specific/prefer not to say	—	—%	—	—	—%

(a)The data reported on the basis of gender identity.

The Board’s Directors are from the U.S. as well as the UK, bringing a range of domestic and international experience to the Board. The Board’s diverse

range of experience and expertise covers not only a wealth of experience of operating in the natural gas and oil industry but also extensive technical,

operational, financial, legal and environmental expertise.

UK Corporate Governance Code Compliance Statement

The Directors support high standards of corporate governance, and it is the policy of the Group to comply with current best practice in UK corporate

governance.

The UK Corporate Governance Code published in July 2018 by the Financial Reporting Council (“FRC”), as amended from time to time, (the “Corporate

Governance Code”) recommends that: (i) the Chair of the Board of Directors should meet the independence criteria set out in the Corporate Governance

Code on appointment; and (ii) the Board should appoint one of the Independent Non-Executive Directors to be the Senior Independent Director. The

Chair of the Board is David E. Johnson, who was independent as of his appointment and whom the Group continues to consider independent, and the

Senior Independent Director for the year ended December 31, 2024 was Sylvia Kerrigan. The Board also considers Sandra M. Stash, David J. Turner, Jr.,

Sylvia Kerrigan and Kathryn Z. Klaber to meet the independence criteria set out in the Corporate Governance Code. Following the resignation of Sylvia

Kerrigan from the Board on January 24, 2025, Sandra Stash has been appointed as the Senior Independent Director. Since January 1, 2025, the

Company has been subject to the UK Corporate Governance Code 2024 (the ”2024 Code”) and will report on its compliance with the principles and

provisions of the 2024 Code in its 2025 Annual Report.

Currently, the Board is of the opinion that as of the date of this report it fully complies with the requirements of the Corporate Governance Code.

Additionally, the Directors acknowledge the requirement to implement a diversity policy that will be applicable to the Group’s administrative,

management and supervisory bodies and the Remuneration, Audit & Risk and Nomination & Governance committees. For more details, refer to Board

Composition and Workforce Composition within this Annual Report & Form 20-F.

Our Approach to Governance

As of the date of this Annual Report & Form 20-F, our Board is made up of six Directors: one Executive Director, chairman and four Non-Executive

Directors (all of whom are independent, except one).

Alongside the continued focus on our business strategy, we achieved significant milestones in 2024 in strengthening core areas of the business. One

such area of focus was corporate governance, where we engaged external consultants to advise on Board best practices, including independence,

composition and expertise.

Key Governance Improvements During 2024

The Board recognizes the benefits of good governance and is seeking to apply this in a meaningful way. DEC is a rapidly evolving company that is in an

expansion and transition phase. Accordingly, the Board is acutely aware of the need to rapidly and effectively integrate new businesses into the

reporting and governance framework of the Group, as determined by the Board. It is recognized that the Board has a key role in balancing the

fundamental elements of good governance, namely to deliver business growth and build trust while maintaining a dynamic management framework.

The Board appreciates the importance of good and effective communication and remains in close contact with its shareholders and other stakeholders.

The Board is actively engaged in the process of solidifying its governance framework for its rapidly expanding business. The Board concluded that

overall compliance with governance best practice has improved during the year under review, with the following having been achieved:

•The Board re-affirmed several key governance policies including the following: Securities Dealing Policy, Whistleblowing Policy, Anti-Bribery &

Corruption Policy, Socio-Economic Policy, Modern Slavery Policy, EHS Policy, Climate Policy, Employee Relations Policy, Human Rights Policy,

Business Partners Policy, Biodiversity Policy, Code of Business Conduct & Ethics, and Tax Policy.

•The Board achieved further progression of the Group’s overall corporate governance framework and practices, taking into account evolving market

best practices and the Group’s NYSE-listing, including, among other things, a continued review and update of the Group’s committee charters and

governance policies.

•The Audit & Risk Committee is fully independent and continues to adopt best practice.

•The Remuneration Committee is also independent with three Non-Executive Directors and the Non-Executive Chairman, and, together with a third-

party consultant, conducted a thorough review of the remuneration policy and practices and undertook a consultation exercise with the Group’s

largest shareholders.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

•Each committee completed a thorough charter evaluation to identify gaps in coverage, relevance and applicability as well as potential areas of

improvement.

•Together with the executive management team, the Chairman and the Nomination & Governance Committee continued to formulate succession

planning procedures and plans around key-roles in management.

•The Board encouraged employee outreach and training regarding the Group’s Whistleblowing Policy and was satisfied by measures taken, including

the placement of awareness posters with hotline details in all major offices.

•Sylvia Kerrigan continued to serve as Senior Independent Director (for the entirety of 2024 and resigned as a director on January 24, 2025).

Corporate Governance Practices and Foreign Private Issuer Status

Companies listed on the NYSE must comply with the corporate governance standards provided under Section 303A of the NYSE Listed Company Manual.

As a “foreign private issuer,” as defined by the SEC, we are permitted to follow home country corporate governance practices, instead of certain

corporate governance practices required by the NYSE for U.S. domestic issuers, except that we are required to comply with Sections 303A.06, 303A.11

and 303A.12(b) and (c) of the Listed Company Manual. Under Section 303A.06, we must have an audit committee that meets the independence

requirements of Rule 10A-3 under the Exchange Act. Under Section 303A.06, we must disclose any significant ways in which our corporate governance

practices differ from those followed by domestic companies under NYSE listing standards. Finally, under Section 303A.12(b) and (c), we must promptly

notify the NYSE in writing after becoming aware of any non-compliance with any applicable provisions of this Section 303A and must annually make a

written affirmation to the NYSE. Further, an LSE listed company must disclose in its annual financial report a statement of how the listed company has

applied the principles set out in the UK Corporate Governance Code, in a manner that would enable shareholders to evaluate how the principles have

been applied, and a statement as to whether the listed company has (a) complied throughout the accounting period with all relevant provisions set out

in the UK Corporate Governance Code; or (b) not complied throughout the accounting period with all relevant provisions set out in the UK Corporate

Governance Code and if so, setting out: (i) those provisions, if any it has not complied with; (ii) in the case of provisions whose requirements are of a

continuing nature, the period within which, if any, it did not comply with some or all of those provisions; and (iii) the company’s reasons for

non-compliance.

For the purposes of NYSE rules, so long as the Group qualifies as a foreign private issuer, we are eligible to take advantage of certain exemptions from

NYSE corporate governance requirements provided in the NYSE rules. We are required to disclose the significant ways in which our corporate

governance practices differ from those that apply to U.S. companies under NYSE listing standards.

Section 312.03 of the NYSE Rules requires that a listed company obtain, in specified circumstances, (1) shareholder approval to adopt or materially

revise equity compensation plans, as well as (2) shareholder approval prior to an issuance (a) of more than 1% of its ordinary shares (including

derivative securities thereof) in either number or voting power to related parties, (b) of more than 20% of its outstanding ordinary shares (including

derivative securities thereof) in either number or voting power or (c) that would result in a change of control. The Group intends to follow home country

law in determining whether shareholder approval is required. Section 302 of the NYSE Rules also requires that a listed company hold an annual

shareholders’ meeting for holders of securities during each fiscal year. We will follow home country law in determining whether and when such

shareholders’ meetings are required.

The Group may in the future decide to use other foreign private issuer exemptions with respect to some or all of the other requirements under the NYSE

Rules. Following our home country governance practices may provide less protection than is accorded to investors under the NYSE listing requirements

applicable to domestic issuers. We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the applicable

corporate governance requirements of the Sarbanes-Oxley Act of 2002, the rules adopted by the SEC and NYSE listing standards. Because we are a

foreign private issuer, our directors and senior management are not subject to short swing profit and insider trading reporting obligations under Section

16 of the Exchange Act. They will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act

and related SEC rules.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Board of Directors

The Group has a commitment to strong governance, reporting and operating standards. During 2024, the Board comprised of seven Directors: including

a Non-Executive Chair (who was independent upon appointment and whom the Group continues to consider independent), a Non-Executive Vice-Chair,

an Executive Director, the Senior Independent Director, three additional independent Non-Executive Directors.


	David E. Johnson	Rusty Hutson, Jr.	Martin K. Thomas
	Non-Executive Chairman, independent upon appointment	Co-Founder and Chief Executive Officer	Non-Executive Vice Chair, independent through December 31, 2023
Age	64	55	60
Appointed	February 3, 2017 and as Chair of the Board on April 30, 2019	July 31, 2014	January 1, 2015
Committee Membership	Remuneration Committee, Sustainability & Safety Committee	None	Nomination & Governance Committee
Experience	Mr. Johnson has served on our Board of Directors since February 2017 and as the Independent Chairman since April 2019. He has worked at a number of leading investment firms, as both an investment analyst and a manager, and more recently in equity sales and investment management. Mr. Johnson currently serves on the board of Chelverton Equity Partners, an AIM-listed holding company, where he serves as a member of the Remuneration, Audit and Nomination committees. Previously, Mr. Johnson was a consultant at Chelverton Asset Management from August 2016 to February 2019. Prior to that, he worked as a fund manager for the investment department a large insurance company and then as Head of Sales and Head of Equities at a London investment bank. Mr. Johnson earned a Bachelor of Arts in Economics from the University of Reading.	Mr. Hutson is our co-founder and has served as our Chief Executive Officer since the founding of our predecessor entity in 2001. Mr. Hutson also serves on our Board of Directors. Mr. Hutson is the fourth generation in his family to immerse himself in the natural gas and oil industry, with family roots dating back to the early 1900s. Mr. Hutson spent many summers of his youth working with his father and grandfather in the oilfields of West Virginia. He graduated from Fairmont State College (WV) with a degree in accounting. After college, Mr. Hutson spent 13 years steadily progressing into multiple leadership roles at well-known banking institutions such as Bank One and Compass Bank. His final years in the banking industry were spent as CFO of Compass Financial Services. Building upon his experiences in the natural gas and oil industry, as well as the financial sector, Mr. Hutson established Diversified Energy Company in 2001. After years of refining his strategy, Mr. Hutson and his team took Diversified public in 2017. He continues to lead his team and expand the Group’s footprint. With a rapidly growing portfolio, Mr. Hutson remains focused on operational excellence and creating shareholder value.	Mr. Thomas has served on our Board of Directors since January 2015. Since January 2022, Mr. Thomas has served as a consultant at the law firm Wedlake Bell LLP, from where he was previously a Partner from January 2018 to December 2021. During his more than 30-year legal career, Mr. Thomas has also served as Partner of Watson Farley & Williams LLP from February 2015 to April 2017 and as consultant of the same firm from May 2017 to May 2018. Mr. Thomas earned a Bachelor of Laws from the University of Reading and completed his Law Society Final Examinations at The College of Law in the UK.
Key Strengths	Investment sector knowledge; finance; providing strong leadership to the Board in connection with the Board’s role of overseeing strategy and developing stakeholder relations.	Deep understanding and leadership in the natural gas and oil sector; strong track record in developing and delivering results in line with strategy; finance; risk management.	Corporate law; advising on mergers and acquisitions; public offerings.
Current External Roles	Chelverton Equity Partners (Director), an AIM-listed holding company	Board of Governors of West Virginia University	Wedlake Bell LLP (Consultant) and Jasper Consultants Limited (Director)


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Board of Directors (continued)

	Sandra M. Stash	David J. Turner, Jr.	Kathryn Z. Klaber
	Independent Non-Executive Director & Non-Executive Director Employee Representative	Independent Non-Executive Director	Independent Non-Executive Director
Age	65	61	58
Appointed	October 21, 2019	May 27, 2019	January 1, 2023
Committee Membership	Sustainability & Safety Committee (Chair), Remuneration Committee, Audit & Risk Committee	Audit & Risk Committee (Chair), Remuneration Committee (appointed Chair on January 24, 2025), Nomination & Governance Committee	Nomination & Governance Committee (Chair), Audit & Risk Committee, Sustainability & Safety Committee
Experience	Ms. Stash has served on our Board of Directors since October 2019. Ms. Stash joined Tullow Oil in October 2013 serving as Executive Vice President of Safety, Operations and Engineering, and External Affairs where she served until March 2020. Ms. Stash is a Certified Director of the US National Association of Corporate Directors and a Fellow of the Canadian Academy of Engineering and currently serves on the boards of Medallion Midstream LLC, Trans Mountain Company, Warriors and Quiet Waters as Chair, the Colorado School of Mines Board of Governors, First Montana Bank, and the African Gifted Foundation. Ms. Stash earned a Bachelor of Science in Petroleum Engineering from the Colorado School of Mines and is a Registered Professional Engineer	Mr. Turner has served on our Board of Directors since May 2019. Mr. Turner has served as Chief Financial Officer of Regions Financial Corporation (NYSE: RF) since 2010 where he leads all finance operations, including mergers and acquisitions, financial systems, investor relations, corporate treasury, corporate tax, management planning and reporting and accounting. Prior to his appointment as Chief Financial Officer, Mr. Turner oversaw the Internal Audit Division for AmSouth Bank (which merged with Regions Financial Corporation in 2006) from April 2005 to March 2010. Before beginning his banking career, Mr. Turner was a certified public accountant and an Audit Partner with Arthur Andersen and KPMG specializing in financial services clients. He earned a Bachelor of Science in Accounting from the University of Alabama.	Ms. Klaber has served on our Board of Directors since January 2023. Since 2014, Ms. Klaber has served as the Managing Director of The Klaber Group, which provides strategic consulting services to businesses and organizations with a focus on energy development in the United States and abroad. Prior to founding The Klaber Group, Ms. Klaber launched the Marcellus Shale Coalition, serving as its first CEO from 2009 to 2013. Previously in her career, Ms. Klaber also served as the Executive Vice President for Competitiveness at the Allegheny Conference on Community Development, Executive Director of the Pennsylvania Economy League, and consultant at Environmental Resources Management, where she gained significant experience in EHS strategy and compliance. Ms. Klaber received her B.A. in Environmental Science from Bucknell University and her MBA from Carnegie Mellon University.
Key Strengths	Risk management & sustainability; operations & engineering; employee engagement.	Financial expert with recent and relevant experience; capital markets; financial operations; audit experience; risk management.	Regulatory compliance, energy specific sustainability programs; EHS processes industry knowledge, risk management; governance.
Current External Roles	Colorado School of Mines (Board of Governors member), Trans Mountain Company, Warriors and Quiet Waters, a Canadian Crown Corporation (Chair and Director), First Montana Bank (Director), and Medallion Midstream, LLC (Director)	Regions Financial Corporation (CFO), Junior Achievement of Alabama, Inc. (Board and Executive Committee), Leadership Alabama (Director), a nonprofit organization, and Five Star Preserve (Director), a nonprofit organization	RLG International (Director), Junior Achievement of Western Pennsylvania (Director and immediate past-Chair), and Beaver County Chamber of Commerce (Beaver County, Pennsylvania) (Chair)


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Board of Directors (continued)		Senior Management

	Sylvia Kerrigan	Bradley G. Gray	Ben Sullivan
	Senior Independent Non-Executive Director (ceased to be a director on January 24, 2025)	President and Chief Financial Officer	Senior Executive Vice President, Chief Legal & Risk Officer, and Corporate Secretary
Age	59	56	46
Appointed	October 11, 2021
Committee Membership	Remuneration Committee (Chair for entirety of 2024 through January 24, 2025), Nomination & Governance Committee
Experience	Ms. Kerrigan has served on our Board of Directors since October 2021. Currently, she is the Chief Legal Officer at Occidental Petroleum Corporation (NYSE: OXY). Prior to joining Occidental, Ms. Kerrigan served as the Executive Director of the Kay Bailey Hutchinson Center for Energy, Law and Business at the University of Texas, where she remains a member of the Executive Council. In Ms. Kerrigan’s more than 20 years with Marathon Oil Corporation, she served in a number of roles overseeing public policy, legal and compliance, corporate positioning and external communications before retiring in 2017 after eight years as the Executive Vice President, General Counsel and Corporate Secretary. Ms. Kerrigan has also served as a director for Hornbeck Offshore Services, Inc. since August 2022 and Board of Trustees for Southwestern University since March 2014. Ms. Kerrigan holds a Directorship Certification through the National Association of Corporate Directors. Ms. Kerrigan earned a Bachelor of Arts from Southwestern University and a Doctor of Jurisprudence from the University of Texas at Austin School of Law.	Mr. Gray has served as our President and Chief Financial Officer since September 2023. Mr. Gray has also served as the Group’s Executive Vice President, Chief Operating Officer since October 2016 to September 2023. Mr. Gray has also served on the Board of Directors until September 2023. Prior to joining the Group, Mr. Gray served as the Senior Vice President and Chief Financial Officer for Royal Cup, Inc. from August 2014 to October 2016. Prior to that, from 2006 to 2014, Mr. Gray served in various roles at The McPherson Companies, Inc., most recently as Executive Vice President and Chief Financial Officer from September 2006 to December 2013. Mr. Gray previously worked in various financial and operational roles at Saks Incorporated from 1997 to 2006. Mr. Gray has a B.S. degree in Accounting from the University of Alabama and was formerly a licensed CPA (Alabama).	Mr. Sullivan has served as our Senior Executive Vice President, Chief Legal & Risk Officer, and Corporate Secretary since September 2023, and prior to that served as Executive Vice President, General Counsel and Corporate Secretary since 2019. Prior to joining us, Mr. Sullivan worked with Greylock Energy, LLC (an ArcLight Capital Partners portfolio company) and its predecessor, Energy Corporation of America, from 2012 to 2017, most recently as Executive Vice President, General Counsel and Corporate Secretary from 2017 to 2019. Prior to that, Mr. Sullivan served as counsel for EQT Corporation from 2006 to 2012. He is a member of the leadership and board of directors of several commerce, legal and industry groups, and has considerable experience in corporate governance and reporting, corporate responsibility and sustainability matters, complex commercial transactions, land/real estate, acquisitions & divestitures, financing, government investigations and corporate workouts and restructurings. Mr. Sullivan received a B.A. from the University of Kentucky and a J.D. degree from the West Virginia University College of Law. He holds licenses to practice law in several states, including Pennsylvania and West Virginia.
Key Strengths	Corporate law; governance; merger and acquisition; regulatory; risk management; cybersecurity and information privacy matters; corporate responsibility and sustainability.	Corporate structure; operational processes and management; finance; strategic support to the CEO; mergers and acquisitions; acquisition integration; information technology; personnel leadership.	Legal expert, mergers and acquisitions, land/real estate, regulatory compliance and governance, risk management and strategic support to the CEO.
Current External Roles	Occidental Petroleum (Chief Legal Officer), Kay Bailey Hutchinson Center for Energy, Law and Business at the University of Texas (Director), and Hornbeck Offshore Services, Inc. (Director)	None	None


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Directors’ Report

The Directors present their report on the Group, together with the audited Group Financial Statements, for the year ended December 31, 2024.

Board of Directors

The Directors of the Group who were in office during the year and up to the date of signing the financial statements were:

•David E. Johnson - Non-Executive Chair (independent upon appointment)

•Rusty Hutson, Jr. - Chief Executive Officer and Executive Director

•Martin K. Thomas - Non-Executive Vice Chair

•David J. Turner, Jr. - Independent Non-Executive Director

•Sandra M. Stash - Independent Non-Executive Director

•Sylvia Kerrigan - Senior Independent Non-Executive Director (for the entirety of 2024 through January 24, 2025)

•Kathryn Z. Klaber - Independent Non-Executive Director

Incorporation and Listing

The Company was incorporated on July 31, 2014, and completed the transfer to the Official List of the Financial Conduct Authority (“FCA”) and

admission to the Main Market of the LSE from AIM in May 2020. The Company commenced trading on the New York Stock Exchange (“NYSE”) on

December 18, 2023. Following the changes to the UK Listing Rules on 29 July 2024, the Premium Listing Segment was replaced by the Equity Shares

(Commercial Companies) category and the Company continues to remain listed on the new equity shares (commercial companies) category of the

Official List of the Financial Conduct Authority.

Review of Business, Outlook & Dividends

The Group is a natural gas, NGLs and oil producer and midstream operator and is focused on acquiring and operating mature producing wells with long

lives and low-decline profiles. The Group’s assets have historically been located within the Appalachian Region, but the Group has acquired assets

expanding its footprint into the Central Region, consisting of the states of Louisiana, Texas and Oklahoma. The Group is headquartered in Birmingham,

Alabama, U.S., and has field offices located throughout the states in which it operates.

Details of the Group’s progress during the year and its future prospects are provided in the Strategic Report within this Annual Report & Form 20-F.

Results

The Group’s reported statutory loss for 2024 was $87 million, or $1.84 per share, and when adjusted for certain non-cash items, it reported adjusted

EBITDA of $472 million. The Group’s adjusted EBITDA for 2023 was $547 million. For more information on adjusted EBITDA refer to APMs within this

Annual Report & Form 20-F.

Dividend Approach

The Board’s target has been to return free cash flow to shareholders by way of dividend, on a quarterly basis, in line with the strength and consistency

of the Group’s cash flows.

For the three months ended March 31, 2024, the Group paid a dividend of $0.290 per share on September 27, 2024. For the three months ended

June 30, 2024, the Group paid a dividend of $0.290 per share on December 27, 2024. For the three months ended September 30, 2024, the Group

expects to pay a dividend of $0.290 per share on March 31, 2025. For the three months ended December 31, 2024, the Group expects to pay a dividend

of $0.29 per share.

The Directors may further revise the Group’s approach to dividends from time to time in line with the Group’s actual results and financial position. The

Board’s approach to its dividend reflects the Group’s current and expected future cash flow generation potential.

Disclosure of Information under UKLR 6.6.1R

The information that fulfills the reporting requirements under this rule can be found in the locations identified below.


Section	Topic	Location
(1)	Interest capitalized	Not applicable
(2)	Publication of unaudited financial information	Not applicable
(4)	Details of long-term incentive schemes	The Remuneration Committee's Report
(5)	Waiver of emoluments by a Director	Not applicable
(6)	Waiver of future emoluments by a Director	Not applicable
(7)	Non pre-emptive issues of equity for cash	Share Capital
(8)	As item (7), in relation to major subsidiary undertakings	Not applicable
(9)	Parent participation in a placing by a listed subsidiary	Not applicable
(10)	Contracts of significance	Material Contracts
(11)	Provision of services by a controlling shareholder	Not applicable
(12)	Shareholder waivers of dividends	Not applicable
(13)	Shareholder waivers of future dividends	Not applicable
(14)	Agreements with controlling shareholders	Not applicable


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Directors’ Interest in Shares

The Directors’ beneficial interests in the Group’s share capital, including family interests, on December 31, 2024 are shown below. These interests are

based on the issued share capital at that time. As of February 28, 2025, there have been no changes to the Directors’ interests. The Non-Executive

Directors will purchase shares after the release of this Annual Report & Form 20-F pursuant to the Non-Executive Director Share Purchase Program

implemented in 2022.


Director	Appointed	Shares of £0.20	% of Issued Share Capital
Rusty Hutson, Jr.	July 31, 2014	1,234,134	2.41%
Martin K. Thomas	January 1, 2015	113,850	0.22%
David E. Johnson	February 3, 2017	23,750	0.05%
David J. Turner, Jr.	May 27, 2019	33,087	0.06%
Sandra M. Stash	October 21, 2019	4,092	0.01%
Kathryn Klaber	January 1, 2023	2,912	0.01%
Sylvia Kerrigan	October 11, 2021	3,181	0.01%
		1,415,006	2.77%

Future Developments

The Directors continue to review and evaluate strategic acquisition opportunities recommended by the Senior Leadership Team, which align with the

strategy and requirements of the Group. Additional details are disclosed in Strategy within this Annual Report & Form 20-F.

Share Capital

As of December 31, 2024, the Group’s issued share capital consisted of 51,295,942 shares with a par value of £0.20 each, with ~45% of record holders

in the U.S. and ~55% of record holders in the UK. The Group has only one class of share and each share carries the right to one vote at the Group’s

AGM. No person has any special rights of control over the Group’s share capital and all issued shares are fully paid. There are no specific restrictions on

the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Group’s Articles of Association and

prevailing legislation. The Directors are not aware of any agreements between holders of the Group’s shares that may result in restrictions on the

transfer of securities or on voting rights.

The Group was authorized by shareholders at the 2024 AGM held on May 10, 2024 to purchase in the market up to 10% of its issued shares (excluding

any treasury shares), subject to certain conditions laid out in the authorizing resolution. The standard authority is renewable annually; the Directors will

seek to renew this authority at the upcoming AGM. Details of shares issued and repurchased by the Group during the period are set out in Note 16 in

the Notes to the Group Financial Statements.

In the second half of 2024, the Company issued 4,592,095 new ordinary shares at an average $12.13 per share (£9.41) for aggregate gross proceeds of

$56 million to fund a portion of the East Texas II and Crescent Pass transactions, discussed in Note 5. The new shares issued represented 9% of the

Company’s existing share capital as of December 31, 2024.

Employee Benefit Trust

An Employee Benefit Trust (“EBT”) was established in 2022 to purchase shares already in the market and is operated through a third-party trustee. The

objective of the EBT is to benefit the Group’s employees and in particular, to provide a mechanism to satisfy rights to shares arising on the exercise or

vesting of awards under the Group’s share-based incentive plans and reduce dilution for shareholders. As of February 28, 2025, the EBT holds 646,098

shares and has distributed 561,566 shares under the Group’s share-based incentive plans.

Financial Instruments

Details of the Group’s principal risks and uncertainties relating to financial instruments are detailed below and in Note 25 in the Notes to the Group

Financial Statements.

Risk Management

Risk management is integral to all of the Group’s activities. Each member of executive management is responsible for continuously monitoring and

managing risk within the relevant business areas. Every material decision is preceded by an evaluation of applicable business risks. Reports on the

Group’s risk exposure and reviews of its risk management are regularly undertaken and presented to the Board. Additional details regarding the Group’s

risk management can be found in Principal Risks and Uncertainties in the Strategic Report within this Annual Report & Form 20-F.

Securities Dealing Code

The Group adopted a Securities Dealing Code for share dealings reasonably designed for a company listed on the equity shares (commercial companies)

category of the Official List of the FCA and admitted to the Main Market of the LSE and NYSE-listed company to promote compliance with insider trading

laws, rules, regulations and applicable listing standards. The code applies to the Directors, members of the Senior Leadership Team and other relevant

employees of the Group and is monitored by the Group’s compliance-focused employees.

Other Corporate Governance Policies

The Board reviewed, updated, and reaffirmed several key governance policies in 2024, including the following:

•Whistleblowing Policy - aims to provide guidance as to how individuals may raise their concerns and to ensure that they may do so confidently

and confidentially.

•Anti-Bribery & Corruption Policy - acknowledges the Group’s commitment to right and ethical practices and addresses bribery and corruption

risk as a part of the Group’s overall risk management strategy.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

•Socio-Economic Policy - affirms the Group’s commitment to being recognized as a leader in the field of corporate responsibility and recognizes

the added value for our shareholders.

•Modern Slavery Policy - recognizes that modern slavery is a significant global human rights issue and has many forms including human

trafficking, forced labor, child labor, domestic servitude, people trafficking and workplace abuse. The Group is committed to respecting

internationally recognized human rights, including ensuring that we are in no way involved or associated with the issue of forced or involuntary

labor and that modern slavery and human trafficking are not taking place in any part of our business.

•EHS Policy - guides activities to protect employees, contractors, the public and the environment.

•Climate Policy - recognizes that climate change is a complex global issue that may have an impact of the Group’s operations, processes,

equipment and capabilities.

•Employee Relations Policy - acknowledges the value of the Group’s employees and highlights the Group’s commitments to promote employee

safety, health and well-being.

•Human Rights Policy - recognizes the Group’s commitment and responsibility to ensure that human rights are upheld in every of its business

operations and to promote human rights where it can make a positive contribution.

•Business Partners Policy - provides the standards the Group expects from its consultants, outsourced providers, subcontractors, vendors and

suppliers to adhere to in their business activities with the Group.

•Biodiversity Policy - outlines the Group’s commitment to promote a net positive impact on the environment and its natural biodiversity.

•Code of Business Conduct & Ethics - provides the standards the Group expects from its Directors, officers and employees, including honest and

ethical conduct, compliance with applicable laws and prompt internal reporting and accountability for adherence to the code.

•Tax Policy - outlines the Group’s tax objections and the foundation of the Group’s tax approach.

These corporate governance policies can be viewed on the Group’s website at www.div.energy/about-us/corporate-governance.

Subsequent Events

Refer to Note 28 in the Notes to the Group Financial Statements.

Director Attendance at Board and Committee Meetings

Directors are expected to attend and participate in all Board meetings and meetings of committees on which they serve and are expected to be available

for consultation with management as requested from time to time. Regular Board and committee meetings are held at such times as the Board and

committees, respectively, may determine. Special meetings may be called upon appropriate notice at any time.

The following table shows the number of Board and committee meetings required to be held and actually held in 2024:


Type of Meeting	Number of Meetings Required to be Held	Number of Meetings Held
Board of Directors	—	10
Audit & Risk Committee	3	5
Nomination & Governance Committee	2	3
Remuneration Committee	2	3
Sustainability & Safety Committee	2	6

Members of the Board attended Board and committee meetings (to the extent they were members of such committee in 2024) as summarized in the

following table.


Director	Committee Seats (during 2024)	Board	Audit & Risk Committee	Nomination & Governance Committee	Sustainability & Safety Committee	Remuneration Committee
Rusty Hutson, Jr.	None	10	—	—	—	—
David E. Johnson	R,S	10	—	—	6	3
Martin K. Thomas	N	10	—	3	—	—
Kathryn Z. Klaber	N,A,S	10	5	3	6	—
Sandra M. Stash	S,A,R	10	5	—	6	3
David J. Turner, Jr.	A,R	10	5	—	—	3
Sylvia Kerrigan	R,N	10	—	3	—	3

Directors’ Indemnities

As permitted by the Group’s Articles of Association, the Directors have the benefit of an indemnity, which is a qualifying third-party indemnity provision

as defined by Section 234 of the Companies Act 2006. The indemnity was in force during the financial year and remains in force at the date of this

report. The Group also purchased and maintained throughout the financial period Directors’ and officers’ liability insurance in respect of itself and its

Directors. This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Conflict of Interest

There are no potential conflicts of interest between any duties owed by the Directors or members of the Senior Leadership Team to the Group and their

private interests and/or other duties. In addition, there are no arrangements or understandings with any of the shareholders of the Group, customers,

suppliers or others pursuant to which any Director or member of the Senior Leadership Team was selected to be a Director or Senior Manager. The

Group tests regularly to ensure awareness of any future potential conflicts of interest and related party transactions. Directors are required to declare

any additional or changed interests at the beginning of each Board meeting. In the event a conflict should arise, the pertinent Director would not take

part in decision making related to the conflict. Additionally, there are no family relationships among any of our Directors or Senior Managers

Substantial Shareholders

As of February 26, 2025, the following shareholders hold greater than 3% of the Group’s issued shares with voting rights:


Shareholders(a)	Number of Shares	% of Issued Share Capital
BlackRock	4,909,399	8.21%
Columbia Management Investment Advisers	3,251,605	5.44%
Jupiter Asset Management	2,792,978	4.67%
Maverick Natural Resources	2,342,445	3.92%
Hargreaves Landsdown	2,108,083	3.53%
Interactive Investor	2,052,048	3.43%

(a)The Group derives the information from TR1 notifications, its third-party performed annual shareholder analysis to support its Foreign Private Issuer status as a U.S.

Corporation listed on the LSE, and from periodic third-party share register reports it receives.

Independent Auditors

The independent auditors, PricewaterhouseCoopers LLP (“PwC”), have expressed their willingness to continue in office as auditors and a resolution to

reappoint PricewaterhouseCoopers LLP will be proposed at the forthcoming AGM.

Corporate Governance Statement

The Directors recognize the importance of sound corporate governance and their associated report is set out in the Chairman’s Governance Statement

within this Annual Report & Form 20-F. The Group reports against the UK Corporate Governance Code.

As further described in the UK Corporate Governance Code Compliance Statement provided within this Annual Report & Form 20-F, the Group is

currently in compliance with the Corporate Governance Code other than as set out therein.

Engagement with Employees’ Statement

The Group is exempted from some reporting requirements, as it did not employ more than 250 employees in the UK during the year under review. As of

December 31, 2024, the Group had 1,589 full-time employees, with 1,187 production employees and 402 production support employees across our ten-

state operating footprint in the U.S.

In line with industry standards in the country of employment, our employees maintain a range of relationships with union groups. The Group has not

previously experienced labor-related work stoppages or strikes and believe that our relations with union groups and our employees are satisfactory.

As per Section 54(1) of the Modern Slavery Act 2015, our Modern Slavery Policy is reviewed and approved by the Board annually and published on our

website. The statement covers the activities of the Group and details policies, processes and actions we have taken to ensure that slavery and human

trafficking are not taking place in our supply chains or any part of our business. More information on our Modern Slavery Policy can be found on our

website.

Pursuant to the Group’s Employee Handbook, the Group will endeavor to make reasonable accommodation to the known physical or mental limitations

of qualified employees with disabilities.

Engagement with Stakeholders’ Statement

The Group adheres to best-in-class operating standards, with a strong focus on EHS to ensure the safety of its employees, local communities and the

environment in which the Group operates. This element of reporting is discussed in the Section 172 Statement and Sustainability & Safety Committee’s

Report within this Annual Report & Form 20-F. Furthermore, the Director designated to engage with the workforce as required under the Corporate

Governance Code is currently Sandra M. Stash.

Relations with Shareholders

The Group aims to maintain its committed approach to long-term sustainability, which, alongside its strict fiscal discipline and stewardship, maximizes

returns to its shareholders. The Directors attach great importance to maintaining good relationships with shareholders. Extensive information about the

Group’s activities is included in its annual and interim reports and accounts and related presentations. The Group also issues regular updates

to shareholders.

Persons possessing market sensitive information are notified in accordance with the Market Abuse Regulation. The Group is active in communicating

with both its institutional and private shareholders. The AGM provides an opportunity for all shareholders to communicate with and to question the

Board on any aspect of the Group’s activities. The Group maintains a corporate website at www.div.energy where information on the Group is regularly

updated, including Annual and Interim Reports and all announcements.

The Directors are available for communication with shareholders and all shareholders have the opportunity, and are encouraged, to attend and vote at

the AGM of the Group during which the Board will be available to discuss issues affecting the Group. The Board stays informed of shareholders’ views

via regular meetings and other communications they may have with shareholders.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

At the 2024 AGM, while shareholders approved most of the resolutions with majorities in excess of 99%, Resolution 19 (Amendment to 2017 Equity

Incentive Plan to increase the number of shares available under the Plan), while receiving 74% of the vote "FOR", did not meet the 75% threshold to

pass. Following the AGM, the Group consulted and engaged with a number of shareholders who voted against the resolutions to better understand their

concerns. The Directors are thankful to the shareholders for sharing their views. They understand that the negative vote was principally related to the

disconnect between traditional equity compensation plans in the United States, the Group’s primary operating market, in relation to traditional

compensation practices in the United Kingdom and the mechanics of recalibrating the Equity Incentive Plan after approximately seven years of

existence. The dialogue with the shareholders has highlighted that there remains strong support for the Group’s equity incentive arrangements.

The Board has discussed the feedback received in detail and continues to actively dialogue with shareholders on the equity incentive and compensation

arrangements.

Environmental Information

The Group adheres to best-in-class operating standards, with a strong focus on EHS to ensure the safety of its employees. There is extensive coverage

of these issues within the Group’s 2024 Sustainability Report which will be available on its website at www.div.energy and in the Sustainability & Safety

Committee’s Report within this Annual Report & Form 20-F.

Workforce Composition

We believe that a workforce with a broad range of skills, experiences, and perspectives contributes to a successful and sustainable business. We value

the unique talents, expertise, and creativity that individuals bring to the Group.

The Group is committed to fostering a work environment where employees are evaluated based on their contributions and abilities. Decisions related to

recruitment, selection, development, and promotion are based on merit and qualifications, ensuring that individuals are considered fairly. The Group

does not discriminate on the basis of race, color, religion, national origin, ancestry, citizenship, age, disability, sex, marital status, pregnancy, veteran

status, sexual orientation, gender identity, genetic information, or any other characteristic protected by applicable law. All applicants receive full and fair

consideration for employment opportunities, and career development, compensation, and advancement are based on objective criteria. Additionally,

employees who experience changes in their abilities while working within the Group are supported through retraining and other resources to facilitate

their continued success.

Charitable & Political Donations

The Group did not make any political donations or incur any political expenditures to candidates or political campaigns or candidates during the period.

During the year, the Group contributed nearly $2.1 million to numerous community organizations.

Going Concern

The Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements. The

validity of the going concern concept is dependent on funding being available for the working capital requirements of the Group in order to finance the

continuing development of its existing projects for at least the next 12 months. Sufficient funds are available in the short-term to fund the working

capital requirements of the Group. The Directors believe that this will enable the Group to continue in operational existence for the foreseeable future

and to continue to meet obligations as they fall due. Refer to Viability and Going Concern within this Annual Report & Form 20-F for a summary of the

Directors’ assessment.

Annual General Meeting

The AGM of the Group will be held in London on April 9, 2025. Full details of these proposals will be set out in a separate Notice of AGM sent to

all shareholders.

Shareholders are invited to complete the proxy form/form of instruction received either by post or vote electronically in CREST in accordance with the

Notes contained in the Notice of the AGM. The Notice of the AGM and Proxy Form/form of instruction are available on the Group’s website at

www.div.energy.

Additional Disclosures

Supporting information that is relevant to the Directors’ report, which is incorporated by reference into this report, can be found throughout this Annual

Report & Form 20-F.

For considerations of post balance sheet events refer to Note 28 in the Notes to the Group Financial Statements within this Annual Report & Form 20-F.

Statement of Directors’ Responsibilities in Respect of the Financial Statements

The Directors are responsible for preparing the Annual Report & Form 20-F and the financial statements in accordance with applicable law and

regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group

Financial Statements in accordance with UK-adopted international accounting standards and the Company Financial Statements in accordance with

United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard

applicable in the UK and Republic of Ireland”, and applicable law). In preparing the group financial statements, the directors have also elected to comply

with International Financial Reporting Standards issued by the International Accounting Standards Board (IFRSs as issued by IASB).

Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of

affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required

to:

•Select suitable accounting policies and then apply them consistently;

•State whether applicable UK-adopted international accounting standards and IFRSs issued by IASB have been followed for the Group Financial

Statements and United Kingdom Accounting Standards, comprising FRS 102 have been followed for the Company Financial Statements, subject to

any material departures disclosed and explained in the financial statements;

•Make judgments and accounting estimates that are reasonable and prudent; and


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•Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in

business.

The Directors are responsible for safeguarding the assets of the Group and Company and, hence, for taking reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s

transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the

financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation

and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors’ Confirmations

The Directors consider that the Annual Report & Form 20-F and accounts, taken as a whole, is fair, balanced and understandable and provides the

information necessary for shareholders to assess the Group’s and Company’s position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in Directors' Report confirm that, to the best of their knowledge:

•The Group Financial Statements, which have been prepared in accordance with UK-adopted international accounting standards and IFRSs issued by

IASB, give a true and fair view of the assets, liabilities, financial position and loss of the Group;

•The Company Financial Statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 102,

give a true and fair view of the assets, liabilities, and financial position of the Company; and

•The Strategic Report includes a fair review of the development and performance of the business and the position of the Group and the Company,

together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors’ Report is approved:

•So far as that Director is aware, there is no relevant audit information of which the Group’s and the Company’s auditors are unaware; and

•They have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and

to establish that the Group’s and Company’s auditors are aware of that information.

This Annual Report & Form 20-F was approved by the Board of Directors and authorized to be issued on March 17, 2025.

On behalf of the Board:

/s/ David E. Johnson

David E. Johnson

Chairman of the Board

March 17, 2025

The Nomination & Governance Committee’s Report

Committee Composition

•Kathryn Z. Klaber, Chair

•Martin K. Thomas

•Sylvia Kerrigan (for the entirety of 2024 through January 24, 2025)

•David J. Turner, Jr. (joined as of January 24, 2025)

Key Objective

The Nomination & Governance Committee assists the Board in (i) discharging its responsibilities related to reviewing its structure, size and composition,

(ii) recommending to the Board any changes required for succession planning and monitoring governance trends and best practices, and (iii) identifying

and nominating for approval Board candidates to fill vacancies as and when they arise. The Nomination & Governance Committee is responsible for

leading the process for appointments, ensuring plans are in place for orderly succession for both the Board and senior management positions, and

overseeing the development of a diverse pipeline for succession.

The Nomination & Governance Committee is responsible for reviewing the results of the Board’s Performance Review process and for making

recommendations to the Board concerning suitable candidates for the role of Senior Independent Director, the membership of the Board’s committees

and the election or re-election of Directors at each AGM.

The Nomination & Governance Committee also oversees the Group’s governance structure and monitors trends and compliance with governance

best practices.

Key Matters Discussed by the Committee

During the past year the Nomination & Governance Committee:

•Led the annual Board Performance Review process over the course of the year, which included (i) an evaluation of the structure, agendas and

outcomes of Board and Board committee meetings and (ii) a comprehensive report and roundtable exercise with the entire Board;

•Took steps with senior management to develop a training regime for the entire Board for the 2024 year and beyond, with training from internal

personnel and external resources on topical subjects such as governance, oversight and Director responsibilities;

•Assessed the member composition of each Board committee to ensure alignment with best practices for Board and committee independence.

•Conducted (together with senior management) a committee-by-committee assessment process to evaluate and provide feedback to each committee

chair;


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•Worked with the Senior Independent Director and senior management to facilitate the Senior Independent Director’s review of the Chairman;

•Worked with the Chairman and senior management to facilitate the review of the CEO;

•Worked with the Chief Human Resources Officer and Chief Legal & Risk Officer to formulate succession planning procedures and plans around key-

roles in management;

•Worked with the Chief Legal & Risk Officer on an evaluation of trends in hiring and onboarding practices and legal risk mitigation related to the

same;

•Reviewed management’s stakeholder engagement efforts and advised on strategy and best practices;

•Reviewed and updated the Nomination & Governance Committee’s Terms of Reference to reflect best practices;

•Continued to work with external advisors and senior management to analyze, assess and implement an enhanced governance framework related to

the Group’s NYSE and LSE listings, including, among other things, a review and update of the Group’s committee charters and governance policies;

and

•Encouraged and maintained oversight of employee outreach and training regarding the Group’s Whistleblowing Policy and was satisfied by measures

taken, including the placement of awareness posters with hotline details in all major offices.

Committee Effectiveness

The Nomination & Governance Committee performed a critical analysis internal review and evaluation on itself, as part of its annual self-review process.

No significant areas of concern were raised.

Membership

For 2024, the Nomination & Governance Committee comprised of three Non-Executive Directors, two of whom were considered independent: Ms. Klaber

(independent), the Nomination & Governance Committee Chair, Mr. Thomas, and Ms. Kerrigan (independent). Ms. Kerrigan served on the Nomination &

Governance Committee for the entirety of 2024 and resigned from the Board of Directors on January 24, 2025. Mr. Turner has been appointed to the

Nomination & Governance Committee with effect from January 25, 2025. Benjamin Sullivan, Senior Executive Vice President, Chief Legal & Risk Officer

and Corporate Secretary acts as Secretary to the Nomination & Governance Committee.

Meetings and Attendance

The Nomination & Governance Committee met three times in 2024 and has met once thus far in 2025. At the end of each Nomination & Governance

Committee meeting, the committee typically meets in private executive session without management present to ensure that points of common concern

are identified and that priorities for future attention by the committee are agreed upon. The Chair of the Nomination & Governance Committee keeps in

close contact with the Chief Executive Officer and Chief Legal & Risk Officer between committee meetings. For Nomination & Governance Committee

meeting attendance for each Director see the Directors’ Report within this Annual Report & Form 20-F.

Responsibilities and Terms of Reference

The Nomination & Governance Committee’s main duties are:

•Reviewing the structure, size and composition of the Board (including the skills, knowledge and experience of its members) and making

recommendations to the Board with regard to any changes required;

•Identifying and nominating, for Board approval, candidates to fill Board vacancies as and when they arise;

•Succession planning for Directors and other senior managers;

•Reviewing annually the time commitment required of Non-Executive Directors; and

•Overseeing the Group’s governance structure as well as trends and compliance in governance best practices.

The Nomination & Governance Committee has formal terms of reference which can be viewed on the Group’s website.

Due to other commitments, Ms. Kerrigan resigned from the Group’s Board of Directors effective as of January 24, 2025. Ms. Kerrigan provided

invaluable leadership, experience, insight, and steadfast support throughout her tenure on the Board, including on legal and industry related matters. As

succession planning is one of the Nomination & Governance Committee’s main duties, it will be reviewing whether Ms. Kerrigan’s resignation would lend

itself to a determination that the Group should identify and nominate of a new board member who embodies similar leadership and skills in 2025. It is

noted that the Board already has experts with both legal and industry backgrounds.

Corporate Responsibility in Hiring

The Nomination & Governance Committee and Board are proud of the progress made to date on diversity within the Group, including achieving the UK

Listing Rules’ targets for 2024 of (i) more than 40% female representation on the Board through the entirety of 2024, with 43% female Board members,

and (ii) a female holding a senior Board position, with Ms. Kerrigan serving as the Senior Independent Director during 2024 and through her resignation

on January 24, 2025, and Ms. Stash now serving as the Senior Independent Director.

The Group continued its efforts in gender balance in 2024. Evidencing this improvement, the FTSE Women Leaders Review 2024 indicated Diversified

ranks in 57th place among the FTSE 250. It also recognized 43% female representation at Board level and 39% in the executive committee and direct

reports category (which is comprised of 36 females and 56 males). Within the energy sector, the Group is in 3rd place. The FTSE Women Leaders

Review is an independent framework supported by the Government that builds on the excellent work of both the Hampton-Alexander and Davies

Reviews which ensures that talented women at the top of business are recognized, promoted and rewarded.

The Nomination & Governance Committee also acknowledges the UK Listing Rule ethnic diversity targets, which the Group intends to continue to closely

examine and evaluate in 2025 in terms of Board membership, additions, recruitment and retention.

The Group believes that a diverse and engaged workforce and Board is an important goal. In particular, the Group continues to focus on support for and

communication with all groups in the communities in which it operates. It is the Nomination & Governance Committee’s hope that these efforts will

increase interest in our industry and assist in the continued development of qualified candidates.


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Board Performance Review

The Nomination & Governance Committee assisted the Chair with the Board Performance Review. The Board Performance Review focused on the

following topics, among other things:

•Strategy development and implementation;

•Risk awareness, monitoring and reporting;

•Cooperation with and evaluation process of the CEO and Senior Leadership Team;

•Board composition and dynamics;

•Onboarding and induction program;

•Meeting structure and operation;

•Meeting effectiveness;

•Shareholder and stakeholder relations;

•Committee, Senior Independent Director and Vice Chairman value contribution; and

•Individual evaluation of the Chairman and all Board members.

The Board Performance Review utilized an online questionnaire and thorough analysis of questionnaire results. The evaluation, analysis and reporting

took place from September to November 2024 and confirmed that the Board and its Directors effectively perform their respective roles. The review

highlighted certain areas for improvement such as restructuring meeting agendas to enhancing strategic discussions.

/s/ Kathryn Z. Klaber

Kathryn Z. Klaber

Chair of the Nomination & Governance Committee

March 17, 2025

The Audit & Risk Committee’s Report

Committee Composition

•David J. Turner, Jr., Chair

•Sandra M. Stash

•Kathryn Z. Klaber

This report covers the activities of the Audit & Risk Committee in 2024 and in the period up to the approval of the Annual Report & Form 20-F for the

year ended December 31, 2024.

Key Objective

The Audit & Risk Committee acts on behalf of the Board and the shareholders to ensure the integrity of the Group’s financial reporting. The Audit & Risk

Committee’s main functions include, among other things, reviewing and monitoring internal financial control systems and risk management systems on

which the Group is reliant, reviewing annual and interim accounts and auditors’ reports; making recommendations to the Board in relation to the

appointment and remuneration of the Group’s external auditors; and monitoring and reviewing annually the external auditors’ independence, objectivity,

effectiveness and qualifications.

Key Matters Discussed by the Committee

During the past year the Audit & Risk Committee:

•Reviewed and challenged interim and annual financial reporting;

•Reviewed and approved the Group’s Hedging Policy;

•Reviewed the Group’s system of internal controls and assessed its effectiveness;

•Continued to engage with management on the post-U.S. listing integration of the applicable NYSE Rules and SEC Rules into the Group’s framework;

•Reviewed and assessed the Group’s approach to its asset retirement obligations and overall liquidity;

•Reviewed and updated the Audit & Risk Committee’s Terms of Reference to reflect best practices;

•Reviewed the Enterprise Risk Management control strategy and function;

•Reviewed the Group’s procedures for detecting fraud, prevention of bribery, and anti-money laundering systems and controls;

•Reviewed the adequacy and security of processes for employees and contractors to raise concerns confidentially about possible wrongdoing in

financial reporting or other matters;

•Engaged with management regarding internal investigations and compliance reviews;

•Continued to engage with Joyce Collins, Vice President of Internal Audit, to further enhance the Group’s internal audit function and consult with Ms.

Collins during private executive sessions;

•Approved the external audit plan presented by PwC, reviewed the effectiveness of the external audit and held independent discussions with the

lead audit partner as well as private confirmatory meetings with members of the PwC audit team;

•Implemented a formal written policy for non-audit services to preserve independence and objectivity of the external auditor in performing statutory

audits;

•Reviewed correspondence with the Financial Reporting Council (the “FRC”) related to financial reporting; and

•Enhanced our internal control procedures and financial reporting mechanisms to assist the Group’s ability to achieve compliance with Sarbanes-

Oxley Act.


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Independence

The Audit & Risk Committee regards independence of the external auditor as crucial in safeguarding the integrity of the audit process and takes

responsibility for ensuring an effective three-way relationship between the committee, the external auditor and management. The Audit & Risk

Committee confirmed that the external auditors, PwC, remain independent and that non-audit fees remain appropriate and reasonable.

Committee Effectiveness

The Audit & Risk Committee completed a critical review of its operations and effectiveness during 2024 as part of its annual self-review process. No

significant areas of concern were raised.

Areas of Focus in 2025

•Review the Group’s procedures in relation to maintaining high standards across all ethics and compliance matters; and

•Ensure that all risks are appropriately identified, prioritized, addressed, and are managed by the respective risk owner.

Membership

In line with the recommendations set by the UK Corporate Governance Code, the Audit & Risk Committee is comprised of three Independent Non-

Executive Directors members: David J. Turner, Jr., the Audit & Risk Committee Chair and Financial Expert, Sandra M. Stash and Kathryn Z. Klaber.

Benjamin Sullivan, Senior Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary acts as Secretary to the Audit & Risk Committee.

The Audit & Risk Committee has recent and relevant financial experience through the leadership of Mr. Turner, who is presently the Chief Financial

Officer at Regions Financial Corporation, a publicly traded U.S. bank that is a member of the S&P 500 Index. Each Audit & Risk Committee member has

been selected to provide a wide range of financial and commercial expertise necessary to fulfil the committee’s responsibilities.

No members of the Audit & Risk Committee have outside connections with the Group’s external auditors.

Meetings and Attendance

The Audit & Risk Committee met five times in 2024 and has met twice thus far in 2025. Before each meeting, the Audit & Risk Committee Chair met

with the members of the finance team to ensure there was a shared understanding of the key issues to be discussed. Audit & Risk Committee meetings

are held in advance of Board meetings to facilitate an effective and timely reporting process. The Audit & Risk Committee Chair provided a report to the

Board following each meeting. For Audit & Risk Committee meeting attendance for each Director see the Directors’ Report within this Annual Report &

Form 20-F.

The Audit & Risk Committee regularly meets in private executive sessions without management present, one with the Vice President of Internal Audit

and one with committee members only, to ensure that points of common concern are identified and that priorities for future attention by the committee

are agreed upon. It also conducts private discussions with PwC as appropriate to ensure that the Audit & Risk Committee has a clear and unobstructed

line of communication with its external auditors. The Chair of the Audit & Risk Committee keeps in close contact with the Chief Legal & Risk Officer, the

Vice President of Internal Audit, the President and Chief Financial Officer, Corporate Controller, the finance team and the external auditors between

committee meetings.

The list below details the members of the Senior Leadership Team who were invited to attend meetings as appropriate during the calendar year. In

addition, PwC attended certain of the meetings by invitation as auditors to the Group.

•Rusty Hutson, Jr. (Chief Executive Officer)

•Bradley G. Gray (President and Chief Financial Officer)

•Benjamin Sullivan (Senior Executive Vice President, Chief Legal & Risk Officer, and Corporate Secretary)

•Michael Garrett (Senior Vice President of Accounting and Corporate Controller)

•Joyce Collins (Vice President of Internal Audit)

•Representatives from PwC UK and PwC U.S.

Responsibilities and Terms of Reference

The main responsibilities of the Audit & Risk Committee are:

•Reviewing accounting policies and the integrity and content of the financial statements, including focusing on significant judgments and estimates

used in the accounts;

•Monitoring disclosure controls and procedures and the adequacy and effectiveness of the Group’s internal financial controls and risk management

systems;

•Oversee and advise the Board on various risk strategies, including cybersecurity, operational, and reputational risks;

•Monitoring the integrity of the financial statements of the Group to assist the Board in ensuring that the Annual Report & Form 20-F, when taken as

a whole, are fair, balanced and understandable;

•Considering the adequacy and scope of external audits and overseeing the relationship with the external auditors, including appraising the

effectiveness of their work prior to considering their reappointment and considering whether to put the external audit contract out to tender;

•Reviewing and approving the statements to be included in annual reports on internal control and risk management; and

•Reviewing and reporting on the significant issues considered in relation to the financial statements and how they are addressed.

In 2024, the Board undertook a formal assessment of the Group’s primary financial service vendors, including its external auditors’, PwC, independence

and will continue to do so as part of the annual audit process and prior to making a recommendation to the Board for the auditors’ re-appointment. This

assessment in 2024 included:

•Reviewing PwC’s non-audit services provided to the Group, including Audit Related Assurance Services provided and the related fees;

•Reviewing PwC’s procedures for ensuring the independence of the audit firm, and parties and staff involved in the audit; and

•Obtaining confirmation from the auditors that, in their professional judgment, they are independent.


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The Audit & Risk Committee has formal terms of reference which can be viewed on the Group’s website.

Actions Undertaken During the Year

The key activities for the Audit & Risk Committee for the period under review are set out below.

Review of the Financial Statements

The Audit & Risk Committee monitored the integrity of the annual financial statements and reviewed the significant financial reporting matters and

accounting policies and disclosures in the financial reports. The external auditors attended an Audit & Risk Committee meeting as part of the full-year

accounts approval process. The process included the consideration of reports from the external auditors in respect of the audit approach, and their

findings in respect of the audit of the 2024 financial statements.

Financial Statements & Presentation of Results

The Audit & Risk Committee reviewed the presentation of the Group’s audited results for the year ended December 31, 2024 and the unaudited results

for the six months ended June 30, 2024 to ensure they were fair, balanced and understandable, when taken as a whole. The results were assessed to

ensure they provide sufficient information for shareholders and other users of the accounts to assess the Group’s position and performance, business

model and strategy. In conducting this review, particular focus was given to the disclosures included in the basis of preparation in Note 2 in the Notes to

the Group Financial Statements in relation to the Group’s funding position and the suitability of the going concern assumption.

The Audit & Risk Committee reviewed the significant judgments associated with the 2024 financial statements, including “key audit matters”, and also

reviewed the supporting evidence for the Group’s going concern assessment.

The Board is required to provide its opinion on whether it considers that the Group’s 2024 Annual Report & Form 20-F, taken as a whole, is fair,

balanced and understandable, and provide the information necessary for shareholders to assess the Group’s position and performance, business model

and strategy. The Audit & Risk Committee discussed the preparation of the Group’s 2024 Annual Report & Form 20-F with the Board. To support the

Board in providing its opinion, the Audit & Risk Committee considered the content and overall cohesion and clarity of the Annual Report & Form 20-F

and assessed the quality of reporting through discussion with management and the external auditors. This included ensuring that feedback from

stakeholders and other individuals had been addressed and that examples of best practice had carefully been considered in the context of the Group.

The process included considering each of the elements (fair, balanced and understandable) on an individual basis to ensure the Group’s reporting was

comprehensive in a clear and consistent way, and in compliance with accounting standards and regulatory and legal requirements and guidelines. The

reviews carried out by internal functions within the Group and independent reviewers were undertaken with a view to ensuring that all material matters

have been correctly reflected in the Group’s 2024 Annual Report & Form 20-F. In summary, the Audit & Risk Committee is comfortable that the overall

disclosures in the 2024 Annual Report & Form 20-F are fair, balanced and understandable, when taken as a whole.

Attention continues to be paid to the presentation of the results and financial position in the Annual Report & Form 20-F as well as APMs as indicators of

performance. The Board considers current treatment, which retains reference to “adjusted EBITDA” and “EBITDA” to remain appropriate. The Board

regards these measures as an appropriate way to present the underlying performance and development of the business since it reflects the continuing

investment being made by the Group, particularly in relation to recent and future acquisition activity. Additionally, this is how the Board monitors the

progress of the existing Group businesses. Accordingly, the Audit & Risk Committee believes that adjusted EBITDA provides useful information to

investors and the market generally in understanding and evaluating the Group’s performance.

Valuation of Natural Gas & Oil Properties & Related Assets

The Audit & Risk Committee considered the carrying value of the Group’s assets and any potential impairment triggers. It reviewed management’s

recommendations, which were also reviewed by the external auditors, including an evaluation of the appropriateness of the identification of cash-

generating units. The Audit & Risk Committee was satisfied with the assumptions and judgments applied by management as well as the triggering event

assessment, which concluded that no impairment triggers were present. Accordingly, there were no impairment charges recorded for the year ended

December 31, 2024. Refer to Note 10 in the Notes to the Group Financial Statements.

The Audit & Risk Committee also considered management’s determination of the fair values of the acquisitions made during 2024 and challenged

management on such determination. It reviewed management’s assumptions and judgements, which were also reviewed by the external auditors. The

Audit & Risk Committee was satisfied with the fair values calculated.

Viability & Going Concern

Management presented to the Audit & Risk Committee an assessment of the Group’s future cash flow forecasts and profit projections, available facilities,

facility headroom, banking covenants and the results of its sensitivity analysis. Detailed discussions were held with management concerning the matters

outlined in the Viability and Going Concern section and Note 2 in the Notes to the Group Financial Statements within this Annual Report & Form 20-F.

The Audit & Risk Committee discussed the assessment with management and was satisfied that the going concern basis of preparation, including the

change in the viability period, continues to be appropriate for the Group and advised the Board accordingly. In addition, the Audit & Risk Committee

reviewed the going concern assumptions with PwC, including PwC’s review of management’s assessment of the Group’s ability to continue as a

going concern. The financial statements of Diversified Energy Company PLC have been prepared on a going concern basis.

The Audit & Risk Committee reviewed and challenged management’s process and assessment of viability by considering various scenarios on forecasted

cash flows, including a base case and downside scenario analysis which reflects the more severe impact of the principal risks and includes future climate

change impacts. In reaching its view, the Audit & Risk Committee also considered: (i) financial forecasts and the appropriate period for the viability

outlook; (ii) the Group’s financing facilities including covenant tests and future funding plans, and (iii) the external auditors’ findings and conclusions on

this matter. The Audit & Risk Committee also considered the adequacy and accuracy of the disclosures in the 2024 Annual Report & Form 20-F in

respect of the Group’s future viability. Following this thorough assessment, the Audit & Risk Committee considered the extent of the assessment made

by management to be appropriate and recommended the viability statement, including the change to the viability period, and related disclosures (for

inclusion in the 2024 Annual Report & Form 20-F) for approval by the Board.

Risk Management

Effective risk management and controls are key to executing the Group’s business strategy and objectives. Risk management and control processes are

designed to identify, assess, mitigate and monitor significant risks, and can only provide reasonable and not absolute assurance that the Group will be

successful in delivering its objectives. The Board is responsible for the oversight of how the Group’s strategic, operational, cyber, financial, human and

personnel, legal and regulatory risks are managed and for assessing the effectiveness of the risk management and internal control framework.


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Embedding the enterprise risk management framework and assessing management’s response to the Group’s material risks continues to be an area of

focus with the Audit & Risk Committee providing challenge and direction as appropriate. During 2024, the Audit & Risk Committee continued to consider

the process for identifying and managing risk within the business and assisted the Board in relation to compliance with the UK Corporate Governance

Code and FRC guidance. Recognizing the evolving nature of the risk landscape, due to the increasing pace of change in the industry, the continued

impact of the macroeconomic environment and global instability, more than ever, the Group needs to manage risks smartly to achieve its vision, deliver

strategy and create sustainable shareholder value.

The Group maintains a risk management program to identify principal risks and risk mitigation activities that includes reviewing the impact, likelihood,

velocity, mitigation measures and residual risk. A description of the Group’s risk management program, principal risks, and risk mitigation activities is

provided in Principal Risks and Uncertainties within this Annual Report & Form 20-F.

In addition to the risks that management identifies through the ongoing processes of reporting and performance analysis, the Audit & Risk Committee

has additional risk identification processes, which include:

•A risk and control process for identifying, evaluating and managing major business risks;

•External experts, who comment on controls to manage identified risks; and

•A confidential and externally managed whistleblowing hotline and a compliance reporting website for employees to contact the Chair of the Audit &

Risk Committee, Chief Legal & Risk Officer and Head of Human Resources in confidence.

Internal Audit

The work performed by the Internal Audit team in 2024 and the results of testing the risk framework continue to support a favorable outcome on the

adequacy and effectiveness of the Group’s internal controls. The Internal Audit team leveraged both audit work previously completed and knowledge of

the Group to arrive at that conclusion. Internal testing was performed (and continues to take place) on the key controls identified throughout the

business processes that impact the financial statements. There was additional focus around the completeness and accuracy element of support,

updating process documentation, and completing walkthroughs of the processes with the Group’s external auditors.

At each Audit & Risk Committee meeting, an update on Internal Audit is provided covering an overview of the work undertaken in the period, actions

arising from audits conducted, the tracking of remedial actions, and progress against the internal audit plan. The team continues to be led by the Vice

President of Internal Audit who has significant prior experience in leading natural gas and oil industry internal audits and has a straight line of

communication available with the Audit & Risk Committee. The team also consists of a highly experienced audit manager as well as three additional staff

auditors, all of whom have years of industry experience. Collectively, this team works under the oversight of the Corporate Controller and reports to the

Chief Financial Officer who is responsible for the Group’s ERM and internal controls framework.

The Group’s internal controls over financial reporting and the preparation of consolidated financial information include policies and procedures that

provide reasonable assurance that transactions have been recorded and presented accurately. Management regularly conducts reviews of the internal

controls in place in order to provide a sufficient level of assurance over the reliability of the financial statements.

Internal Control Systems

The Audit & Risk Committee is responsible for overseeing management’s establishment and maintenance of the Group’s system of internal control and

reviewing its effectiveness. Internal control systems are designed to meet the particular needs of the Group and the particular risks to which it is

exposed. The Board has reviewed the Group’s risk management and control systems noting they were in place for the year under review and up to the

date of approval of the 2024 Annual Report & Form 20-F and believes that the controls are satisfactory, given the nature and size of the Group.

The internal controls, which provide assurance to the Audit & Risk Committee of effective and efficient operations, internal financial controls and

compliance with laws and regulations include:

•A formal authorization process for investments;

•An organizational structure where authorities and responsibilities for financial management and the maintenance of financial controls are clearly

defined;

•Anti-bribery and corruption policies and procedures and a dedicated telephone number and website designed to address the specific areas of

corruption risk faced by the Group; and

•A comprehensive financial review cycle where annual budgets are formally approved by the Board and monthly variances are reviewed against

detailed financial and operating plans.

The Audit & Risk Committee considered the inherent risk of management override of internal controls as defined by Auditing Standards and performed

the following actions during 2024:

•Reviewed management’s report on the Group’s fraud prevention framework and the key controls in place in its operations designed to prevent and

detect fraud, as well as future plans for enhancement of the relevant controls;

•Identified the Group’s population of application fraud controls within the financial processes and conducted testing around those specific items to

assure the Group’s risk control framework is whole and controls are working as anticipated to provide further confidence in the strength of fraud

prevention;

•Reviewed and assessed cybersecurity risk trends and other related matters with the Group’s Chief Information Technology Officer;

•Discussed the steps management had taken, including designing a fraud detection process for the specific fraud risks identified;

•Financial processes identified with critical fraud risk potential were reviewed at an elevated level and controls adjusted accordingly per discussion

with management;

•Assessed the measures in place, including segregation of duties ensuring independent review, to mitigate against the risk of management override

of controls;

•Discussed PwC’s audit procedures, including the results of their conclusions relating to the fraud risk in revenue recognition with a particular focus

on ensuring the existence of revenue transactions;

•Challenged management on the robustness of the controls; and


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•Reviewed the overall robustness of the control environment, including consideration of the Group’s whistleblowing and compliance arrangements

(including with respect to compliance with the Sarbanes-Oxley Act).

The Audit & Risk Committee agreed with management’s assessment that the overall control framework remained effective and, with a focus on high-risk

and material areas, additional controls introduced had mitigated risk.

Safeguards & Effectiveness of the External Auditors

The Audit & Risk Committee is responsible for oversight and for managing the relationship with our external auditors. The Audit & Risk Committee

recognizes the importance of safeguarding the independence and objectivity of the external auditors. The following safeguards are in place to ensure

that the independence of the auditors is not compromised.

•The Audit & Risk Committee has a formal written policy on the provision of non-audit services by external auditors.

•The Audit & Risk Committee carries out an annual review of the external auditors regarding their independence from the Group and that they are

adequately resourced and technically capable to deliver an objective audit to shareholders. Based on this review, the Audit & Risk Committee

recommends to the Board the continuation, or removal and replacement, of the external auditors;

•The external auditors may only provide non-audit services permitted by the FRC’s Revised Ethical Standard 2019 (the “Ethical Standard”) which

was issued in December 2019. These services include audit-related services such as regulatory and statutory reporting as well as other items

relating to shareholder and other circulars;

•The Audit & Risk Committee reviews all fees paid for audit and audit-related services on a regular basis to assess the reasonableness of fees, value

of delivery and any independence issues that may have arisen or may potentially arise in the future;

•The external auditors report to the Directors and the Audit & Risk Committee regarding their independence in accordance with relevant standards;

•Non-audit services carried out by the external auditors are limited to work that is closely related to the annual audit or where the work is of such a

nature that a detailed understanding of the business is beneficial, and utilizes subject matter experts not conducting audit services;

•The Audit & Risk Committee monitors costs for non-audit services in absolute terms and in the context of the audit fee for the year to ensure that

the potential to affect the independence and objectivity of the auditors does not arise. During 2024, non-audit services included work around the

Group’s half-year review and acquisitions which did not affect the independence and objectivity of the auditors; and

•Information related to audit fees for 2024 is detailed in Note 7 in the Notes to the Group Financial Statements.

This is the external auditor’s fifth year as the Group’s external auditor following a formal tender process during 2020 and subsequent appointment at the

2020 AGM.

The Audit & Risk Committee confirms that the Group has complied with the requirements of the Statutory Audit Services for Large Companies Market

Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 for the financial year under review.

The Audit & Risk Committee is cognizant of the fact that assessing external audit quality is a key responsibility within its remit which stakeholders look

to the committee to discharge. The Audit & Risk Committee continually monitors the effectiveness of the external audit. To comply with this

requirement, the Audit & Risk Committee reviewed and commented on PwC’s detailed audit plans and strategy, including the intended scope of the

audit, identification of significant and elevated audit risks, the level of materiality proposed and the principles of PwC’s centrally directed audit approach.

Many elements of the audit plan approach remained consistent with the 2023 audit, and the Audit & Risk Committee welcomed the plan to enhance the

focus on utilizing data‑enabled auditing approaches to maximize efficiencies and insight from the auditors’ testing. Following discussion and challenge,

the Audit & Risk Committee agreed on the methodology adopted for determining materiality and the scope of the audit.

It then considered progress during the year by assessing the major findings of its work, the perceptiveness of observations, the implementation of

recommendations and the management of feedback. At the request of the Board, the Audit & Risk Committee also monitors the integrity of the financial

information in the Annual Report & Form 20-F, half-year results statements, and the significant financial reporting judgments contained in them. Further

details of the Audit & Risk Committee’s procedures to review the effectiveness of the Group’s systems of internal control during the year can be found in

the section on effective risk management and internal control above.

The Audit & Risk Committee recognizes that all financial statements include estimates and judgments by management. The key audit areas are agreed

upon with management and the external auditors as part of the year-end audit planning process. This includes an assessment by management of the

significant areas requiring management judgment and the Audit & Risk Committee challenging management’s judgments. These areas are reviewed with

the auditors to ensure that appropriate levels of audit work are completed, and the Audit & Risk Committee reviews the results of this work. The

numerous interactions with the auditor provided the Audit & Risk Committee with an insight into the quality of the audit process and the audit leadership

team, and with the opportunity to assess the auditor’s challenge of management’s views.

Assurance Measures

On behalf of the Board, the Audit & Risk Committee examines the effectiveness of:

•The systems of internal control, primarily through reviews of the financial controls for financial reporting of the annual, preliminary and half-yearly

financial statements;

•The management of risk by reviewing evidence of risk assessment and management; and

•Any action taken to manage critical risks or to remedy any control failings or weaknesses identified, ensuring these are managed through to

closure.

Where appropriate, the Audit & Risk Committee ensures that necessary actions have or are being taken to remedy or mitigate significant failings or

weaknesses identified during the year either from internal review or from recommendations raised by the external auditors. In 2024, the Audit & Risk

Committee did not identify any significant failings or weaknesses in the system of risk management and internal control. The Group’s internal controls

over the financial reporting and consolidation processes are designed under the supervision of the Group’s President and Chief Financial Officer to

provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of the Group’s published financial

statements for external reporting purposes, in accordance with UK-adopted International Accounting Standards and International Financial Reporting

Standards as issued by the International Accounting Standards Board.


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Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance and may not prevent or detect all

misstatements whether caused by error or fraud. The Group’s internal controls over financial reporting and the preparation of consolidated financial

information include policies and procedures that provide reasonable assurance that transactions have been recorded and presented accurately.

Management regularly conducts reviews of the internal controls in place in respect of the processes of preparing consolidated financial information and

financial reporting. During the year, there has been a significant investment in resources, processes and personnel relating to the internal controls of

these processes to reflect the growth of the Group. This is in order to provide a sufficient level of assurance over the reliability of the financial

statements.

Summary

For the year under review, and beyond, the Audit & Risk Committee will continue its monitoring of financial reporting and of internal controls and risk

management, as these evolve in response to the Group’s continuing growth and new opportunities as they arise.

/s/ David J. Turner, Jr.

David J. Turner, Jr.

Chair of the Audit & Risk Committee

March 17, 2025

The Remuneration Committee’s Report

Committee Composition

•Sylvia Kerrigan, Chair (for the entirety of 2024 through January 24, 2025)

•David J. Turner, Jr., Chair (appointed on January 24, 2025)

•David E. Johnson

•Sandra M. Stash

Letter from Chair of the Remuneration Committee

We are pleased to present our 2024 Directors’ Remuneration Report on behalf of the Board. Included within this report is the Annual Report on

Remuneration, which sets out payments and awards made to the Directors for the year ended 2024, and the proposed new Directors’ Remuneration

Policy, which, if approved at the Group’s 2025 Annual General Meeting (“AGM”), will operate for the year ended December 31, 2025, and the

subsequent years until the AGM in 2028. The Director’s Remuneration Report will be presented to shareholders for approval at the 2025 AGM.

Key Objective

The Remuneration Committee oversees the remuneration program of Executive Directors and the Senior Leadership Team (“Executives”) on behalf of

the Board. The Remuneration Committee is focused on ensuring that remuneration is designed to emphasize "pay for performance” by:

•Providing performance-driven remuneration opportunities that attract, retain and motivate executives to achieve optimal results for the Group and

its shareholders;

•Aligning remuneration with the Group’s short- and long-term business objectives while providing sufficient flexibility to address the unique

dynamics of the Group’s business model; and

•Emphasizing the use of equity-based remuneration to motivate the long-term retention of the Group’s executives and align their interests with

those of shareholders.

As an executive's seniority increases, and the scope, duties and responsibilities of the executive's position expand, the Remuneration Committee believes

a greater portion of total remuneration should be performance driven and earned over a longer time horizon. Fixed remuneration should therefore be a

relatively smaller portion of senior executive total remuneration with the majority of an executive’s realized remuneration linked to the performance of

the Group and delivered in shares.

DEC’s Performance in 2024

2024 was a year of continued execution and transition. The Group brought a focused execution on increased cash flow generation, capital discipline,

and balance sheet management. The year also marked a transition as the Group closed the Oaktree, Crescent Pass and East Texas II acquisitions, which

continued the Group’s expansion in the Central Region upstream and midstream assets, expanded access to U.S. investors and improved trading

liquidity with dual listing on the LSE and NYSE, and completed its eighth and ninth asset-backed securitizations that further enhanced the Group’s

liquidity.

Through its continual, daily focus on SAM and its zero tolerance policy for fugitive emissions, the Group made significant progress in its emissions

reduction goals, including through its handheld and aerial leak detection and repair programs and methane-driven pneumatic device conversions to

compressed air. Further, the Group expanded asset retirement operations, deploying 18 rigs across Appalachia to retire a combined 287 wells –

including 85 third-party owned wells and 202 Diversified-owned wells.

The Group’s formal Community Giving and Engagement Program also made meaningful contributions to surrounding communities, with more than $2

million contributed to various charitable, educational, student and youth athletic, and community and stakeholder engagement and outreach groups,

and community organizations, including to food pantries, arts and educational programs, health and wellness organizations, and municipal services.

These achievements combined with the year’s equity performance has impacted the performance-related pay outcomes for the Executive team. With

respect to the 2024 annual bonus, as reported elsewhere in this Annual Report & Form 20-F, DEC’s adjusted EBITDA for 2024 was $472 million. This

equated to adjusted EBITDA per diluted share of $10.79, after making certain adjustments for acquisitions and share dilution as described in Annual

Bonus for Executive Directors within this Annual Report & Form 20-F. The threshold, target and stretch metric was $8.00, $8.21 and $8.42 per share,

respectively. Metrics were established using the 2024 budget, with the stretch metric achievable from over-performing in production, management of

costs, and/or executing on acquisitions. Due to adjusted EBITDA per share being above maximum performance target levels the Remuneration

Committee awarded 50% for this metric out of a potential 50%.


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Under the cash cost metric the Group achieved $1.35 per Mcfe, which is similar to the Group’s KPI for adjusted operating cost per Mcfe, yet excludes

certain adjustments for acquisitions and production taxes. The threshold, target and stretch metric was $1.35, $1.30 and $1.27 per Mcfe, respectively.

As such, the Remuneration Committee awarded 5% for this metric out of a potential 20%.

In relation to the non-financial elements which account for the remainder of the annual award, the Executive Director (CEO) was determined to have

performed towards the top end of the objectives (30% of potential 30%). The Group’s overall performance resulted in awards of 148.8% of salary out

of a maximum of 175% of salary being awarded to the CEO under the annual bonus plan.

The 2024 financial year was the end of the three-year performance period for the Performance Share Award granted in 2022. The performance

conditions are a mix of Return on Equity (“ROE”) (40%), Absolute TSR (30%), Relative TSR (10%), and Methane Intensity Reduction (20%) targets

measured over three years. The overall payout for the award is 67% of maximum.

The Remuneration Committee considers that the Remuneration Policy operated as intended during 2024 and that the remuneration outcomes described

above reflect the overall performance by the Group. The Remuneration Committee determined that no discretion needed to be applied for the above

remuneration outcomes.

Key Matters Discussed by the Committee

During the past year the Remuneration Committee:

•Determined 2024 annual bonus outcomes for the Executive Director;

•Determined base salary of the Executive Director for the period starting January 2024;

•Reviewed the annual total remuneration of the Group’s executives;

•Reviewed the Group’s Directors’ Remuneration Policy and consulted on proposed changes with the Group’s largest shareholders;

•Reviewed the Group’s overall workforce remuneration and benefits plans, ensuring alignment of incentives and rewards with culture;

•Reviewed and approving the 2025 Executive Director Bonus Plan and Performance Share Award targets;

•Discussed the voting results of the 2024 AGM;

•Determined that the remuneration policy for 2024 operated as intended;

•Prepared the Directors’ Remuneration Report; and

•Reviewed and updated the Remuneration Committee’s Terms of Reference to reflect best practices.

Directors’ Remuneration Policy for 2025

Diversified is an energy company focused on solutions that optimize existing, long-life, and often undervalued U.S. energy assets. The Group’s unique

modern field management philosophy leverages technology that integrates digital tools, scale, vertical integration, and human experience to responsibly

manage mature existing assets, improve environmental performance, and unlock overlooked value. As the only public company executing this strategy,

Diversified is differentiated by this focus that minimizes traditional exploration and production risks, delivers consistent free cash flow, and serves a

fundamental role in U.S. energy markets.

Ensuring that the Group has the right talent has enabled Diversified to deliver its strategic vision of building a portfolio of high-performing assets since

the Group went public on the NYSE, and it has continued the track record of delivering on that vision with the closing of the Oaktree, the Crescent Pass,

and East Texas acquisitions. The CEO recruited and developed this talent and is largely responsible for its success. The Group remains committed to a

balanced capital allocations framework, with the diversity and strength of the asset base providing a solid foundation for accretive growth and value

creation for our shareholders.

The current policy was approved by shareholders in a binding vote at the 2022 AGM with just under 83% of votes cast in favor.

This policy was traditionally aligned with the UK market and met the expectations of our shareholders when it was introduced. In preparation for the

shareholder vote on a new Remuneration Policy at the 2025 AGM, the Remuneration Committee has engaged an independent subject matter expert to

conduct a detailed review of the remuneration arrangements to ensure that they are appropriate in light of the performance of the business and our

current strategy. Of particular focus for the Remuneration Committee was the need to ensure that going forward the policy is capable of delivering

competitive compensation in the U.S., where all of Diversified’s executives, employees, and operations are based, whilst meeting the expectations of our

UK investor base in terms of the design and structure of the arrangements and ensuring the interests of our shareholders and executives are aligned.

The key conclusions of the review were that:

•The current policy approved by the shareholders at the Group’s 2022 annual general shareholder meeting, whilst being traditionally aligned to the

UK market, contains features not present in the U.S. market and is not well aligned with the U.S. in terms of quantum or structure, leading to

concerns of the Remuneration Committee and the Group’s ability to replace and attract future Executive Directors as well as other members of the

Group’s senior management team;

•Current total direct compensation (base + on-target bonus + the expected value of LTIP) for the Executive Directors, specifically with respect to

the CEO, is approximately 30% below the median of other North American gas producers of a similar size in terms of market capitalization;

•Although almost all of our peers in the U.S. grant a mix of performance shares and restricted (i.e. service-based vesting) shares as part of the

compensation for executives, our current policy does not offer restricted shares to the Executive Directors, which places the Group at a significant

disadvantage, particularly should it need to recruit senior talent in the future;

•The Group already grants a mix of performance shares and restricted shares to its employees and a move to include restricted shares in Executive

Directors’ pay aligns with our existing internal reward structure ensuring consistency and alignment within our senior team; and

•With Diversified’s unique U.S. focus and exposure to the U.S. market, there is a clear and compelling rationale to granting hybrid awards (i.e. a mix

of performance and restricted shares), even though hybrid awards are a relatively new development for UK-listed companies (with the practice

having been recently acknowledged by the Investment Association in its October 8, 2024, updated “Principles of Remuneration” as being an

appropriate feature for consideration in certain circumstances).


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Shareholder consultation regarding proposed changes to remuneration

The policy proposals were developed and consulted upon with a significant number of the Group’s largest shareholders and proxy advisors (the majority

of whom were supportive). The Remuneration Committee would like to thank those who provided constructive feedback, which enabled it to re-assess

and, in certain parts, reduce its proposals (including, in particular, the proposed restricted share award level) and make changes in response to that

feedback where appropriate. Importantly, it should be noted that with the adoption of the proposed remuneration policy for 2025, the CEO’s total direct

compensation in 2025 when all changes are implemented will be still positioned slightly below the median level of U.S. peers. See Part A: Directors’

Remuneration Policy for a list of the main changes from the previous policy.

Summary of Main Changes to the Directors’ Remuneration Policy

Annual Bonus - The maximum annual bonus opportunity of the CEO would increase from 175% to 200% of salary. For Executive Directors who have not

yet achieved the required shareholding, 50% will be deferred as either shares or cash for two years provided continued service. Current Executive

Directors who have met their shareholding guidelines will not be required to defer any of annual bonuses.

Long-Term Incentive (“LTI”)

The policy maximum for performance share awards would remain unchanged at 325% of salary for the CEO and a new restricted share award of 100%

of salary will be introduced. Other non-CEO Executive Directors would be eligible for performance awards of up to 250% of salary and 75% of salary in

restricted shares.

Both the performance and restricted share awards will be subject to three-year performance and vesting period, and a two-year post-vesting holding

period, resulting in a total five-year period from grant until rewards are realized. The restricted share awards will vest on a cliff-basis at the end of the

three-year vesting period. Consistent with the UK Corporate Governance Code and investor guidelines, the Remuneration Committee will have discretion

to override vesting outcomes in certain circumstances where the Remuneration Committee determines that vesting is not warranted.

The Remuneration Committee acknowledges that shareholders would often expect a reduction in award face value when replacing performance shares

with restricted shares. However, in addition to structuring the compensation program to be retentive and give future flexibility for attracting senior

talent, the Remuneration Committee is also seeking to address an approximate 30% shortfall in the level of CEO remuneration compared to a peer

group of U.S. listed oil & gas producers comprising: Amplify Energy Corp; Berry Corporation; CNX Resources Corp; Granite Ridge Resources; Highpeak

Energy; Mach Natural Resources; Northern Oil and Gas; Riley Exploration Permian; Ring Energy; TXO Partners; Vital Energy; and W&T Offshore. This

peer group was chosen upon considerable review and with assistance from the Remuneration Committee’s independent compensation expert. The

group was selected from a long list of natural gas and oil companies headquartered in the U.S. that focus on natural gas extraction with wells and

systems. The results were further filtered by similarity of operational footprint to Diversified and which are similar in terms of median market

capitalization and revenue. Taken together, the proposed changes would result in the remuneration of the CEO being positioned slightly below the

median of the U.S. peers and with a market aligned mix between performance shares and restricted shares. The proposed award limits also take

account of feedback from shareholders consulted on our initial thinking as to the most appropriate mix between performance and non-performance

based awards, as shown in the charts below.

The metrics on which the LTI performance share awards are based have not yet been finalized but will be fully disclosed to shareholders in advance of

the 2025 AGM. The Remuneration Committee’s current thinking is that the metrics will be as follows:

•ROE (40%),

•Absolute TSR (20%),

•Relative TSR vs a bespoke peer group of primarily U.S. gas producers (20%), and

•Emissions Reduction (20%)

Share Ownership Guidelines

In order that Executive Directors’ interests are further linked with those of shareholders, the shareholding that Directors are expected to build up and

maintain in the Group are being increased to align with the market. The Remuneration Committee proposed to increase the shareholding requirements

to 600% for the CEO and 300% for other Executive Directors. Also, a two-year post cessation shareholding guideline will continue.

Notations Regarding Other Elements of the Remuneration Policy

The Remuneration Committee believes the remainder of the Remuneration Policy remains largely fit for purpose and we only have proposed minor

changes to the Remuneration Policy in line evolving market best practice.

The CEO’s salary increase for 2025 is in-line with the average increase awarded to the workforce at 3.5%.


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Proposed changes to the Equity Incentive Plan Rules

Under our current Equity Incentive Plan (“EIP”) that governs equity-based awards, we are subject to two restrictions on dilution: a hard cap of

3,284,031 shares and, in alignment with UK best practices, a cap allocated under the plan over any ten-year period amounting to 10% of our issued

share capital (equivalent to 5,979,594 shares as of February 28, 2025). The Remuneration Committee proposes to streamline these limits by removing

the hard cap of 3,284,031 shares while and retaining the cap of 10% over ten years, in accordance with UK best practice. Additionally, shares held by

the Employee Benefit Trust (the “EBT”) will occasionally be utilized to cover vested equity-based awards. The EBT will also periodically purchase shares

in the open market. Consistent with best practices, shares purchased in the market issued by the EBT will not count towards the 10% cap because they

are not dilutive to the share value.

Format of the Report and Matters to be Approved at our Annual General Meeting

At the 2025 AGM, shareholders will be asked to approve three resolutions related to Directors’ remuneration matters:

•To approve the Directors’ Remuneration Policy as set out in Part A of this Directors’ Remuneration Report;

•To approve the Directors' Remuneration Report other than Part A; and

•To approve changes to the EIP dilution limits as outlined above.

Our approach to executive pay is designed to address the challenge of balancing a U.S. based management team with the expectations of a UK and U.S.

listed company. We hope that our shareholders will remain supportive of the approach and that you will vote in favor of the remuneration resolution at

the 2025 AGM.


/s/ David J. Turner, Jr.	/s/ David E. Johnson	/s/ Sandra M. Stash
David J. Turner, Jr.	David E. Johnson	Sandra M. Stash
Chair of the Remuneration Committee	Chair of the Board and Member of the Remuneration Committee	Member of the Remuneration Committee
March 17, 2025	March 17, 2025	March 17, 2025

Membership

The Remuneration Committee is currently comprised of the Non-Executive Chairman and two Independent Non-Executive Directors: David J. Turner, Jr.,

the Remuneration Committee Chair, Sandra M. Stash, the Senior Independent Director as of January 24, 2025, and David E. Johnson. Sylvia Kerrigan

served as Remuneration Committee Chair for the entirety of 2024 and resigned effective January 24, 2025. Benjamin Sullivan, Senior Executive Vice

President, Chief Legal & Risk Officer and Corporate Secretary acts as Secretary to the Remuneration Committee.

Meetings and Attendance

The Remuneration Committee met formally three times during the year and has met twice thus far in 2025. The Remuneration Committee regularly

meets in private executive session at the end of its committee meetings, without management present to ensure that points of common concern are

identified and that priorities for future attention by the committee are agreed upon. The Chair of the Remuneration Committee keeps in close contact

with the Chief Legal & Risk Officer and Human Resources team between committee meetings. For Remuneration Committee meeting attendance for

each Director see the Directors’ Report within this Annual Report & Form 20-F.

Committee Effectiveness

The Remuneration Committee performed a critical analysis internal review and evaluation on itself, as part of its annual self-review process. No

significant areas of concern were raised.

Responsibilities and Terms of Reference

A key objective of the Remuneration Committee is to help attract, retain and motivate talented executives by ensuring competitive remuneration and

motivating incentives. The incentives are linked to the overall performance of the Group and, in turn, to the interests of all shareholders.

The Remuneration Committee is responsible for:

•Discussing and determining the Group’s framework for executive remuneration;

•Determining the remuneration for the Executive Director;

•Reviewing remuneration for other members of the Senior Leadership Team;

•Reviewing and recommending to the Board the remuneration of the Non-Executive Directors; and

•Overseeing and reviewing the structure and operation of the remuneration policy.

The Remuneration Committee has formal terms of reference which can be viewed on the Group’s website at www.div.energy.

Role of Management

The Group’s Human Resources Department assists the Remuneration Committee and its independent compensation consultant (as applicable) in

gathering the information needed for their respective reviews of the Group’s compensation program with respect to the Senior Leadership Team. This

assistance includes assembling requested compensation data. The CEO develops pay recommendations for members of the Senior Leadership Team for

review and discussion by the Remuneration Committee. The Remuneration Committee, in private session and without executive officers present,

approves the CEO’s pay levels.

External Advisors

During the year, FIT Remuneration Consultants LLP (“FIT”) and Mercer Limited (“Mercer”) provided assistance to the Remuneration Committee. Both

FIT and Mercer are signatories to the Remuneration Consultants Group’s Code of Conduct. FIT provided advice to the Remuneration Committee on all

matters relating to remuneration, including best practice. Mercer provided specialist advice to support the review of the proposed Director’s

Remuneration Policy and shareholder engagement. FIT provided no other services to the Group or its Directors and do not have any other connection

with the Group or its Directors. Mercer provides pay benchmarking and survey data to the Group’s management but otherwise does not have any other

connection with the Group or its Directors. Accordingly, the Remuneration Committee was satisfied that the advice provided by FIT and Mercer was


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objective and independent. The Remuneration Committee selected and appointed FIT based on the positive experience with FIT in prior years, among

other factors. Mercer was appointed to advise both the Group and the Remuneration Committee on development of the new Remuneration Policy, based

on the Group’s experience of working with its lead advisor on the development of the previous Remuneration Policy. FIT’s and Mercer’s fees in respect

of 2024 were $37,507 (GBP: £29,302), and $126,080 (GBP: £98,500), respectively. Both FIT’s and Mercer’s fees are charged on the basis of time and

materials.

Remuneration at a Glance

Proposed Remuneration Policy & Implementation


Stated Objective	Overview of Proposed Remuneration Policy	Proposed Implementation for 2025
Base salary	•Reviewed annually. •Consideration given to the performance of the Group, the individual’s performance, the individual responsibilities or scope of the role, and pay practices in relevant comparator companies in the U.S.	Executive Director (Effective January 1, 2025 and represents a 3.5% increase for Rusty Hutson, Jr. over 2024. This compares to increases across the Group ranging from 0% to 7% based on performance, with an average of 3.5%.) •CEO: Rusty Hutson, Jr.: $807,128
Pension & benefits	•The current Executive Director does not receive a pension contribution and any future provision will be aligned to the wider workforce.	•The current Executive Director does not receive a pension contribution. •Consistent with the approach taken for all employees, the Group offers a retirement plan in accordance with subsection 401(k) of the Internal Revenue Code in which the Executive Director may make voluntary pre-tax contributions towards his own retirement. The Group matches the Executive Director’s contributions up to $26 thousand per annum. •Benefits consist of standard car and health/insurance related benefits.
Annual Bonus Short-Term Incentives	•Maximum of 200% of salary for Rusty Hutson, Jr. and 125% of salary for other Executive Directors. •For Executive Directors who have not yet achieved the required shareholding, 50% will normally be paid in cash, with the remainder deferred as either shares or cash for two years provided continued service. •Deferral is not required for existing Executive Directors who, at the time this Remuneration Policy is approved, have achieved the required shareholding, i.e. 100% of their award will normally be paid in cash, with no deferral. •Subject to the achievement of relevant performance conditions, both qualitative and quantitative. •Subject to malus and clawback provisions.	Potential awards for 2025 performance period: •Rusty Hutson, Jr.: 200% of salary •Other Executive Directors: 125% of salary •Performance conditions, which will have defined Threshold, Target, and Stretch payout criteria: •50% adjusted EBITDA per share •25% cash cost per Mcfe •25% sustainability measures
Long-Term Incentives	•Performance Share Awards, subject to service and performance over a three-year period, and eligible for payment of applicable Dividend Equivalent Rights during the vesting period. Maximum award of 325% of salary for Rusty Hutson, Jr. and 250% of salary for other Executive Directors. •Restricted Share Awards, subject to service over a three-year period, and eligible for payment of applicable Dividend Equivalent Rights during the vesting period. Maximum award of 100% of salary for Rusty Hutson, Jr. and 75% of salary for other Executive Directors. •Subject to malus and clawback provisions.	Potential awards for 2025: •Rusty Hutson, Jr.: 325% of salary of performance share awards; 100% of salary of restricted share award •Other Executive Directors: 250% of salary of performance share awards; 75% of salary of restricted share awards •Performance conditions: •40% return on equity •20% relative TSR •20% absolute TSR •20% emissions
Share Ownership Requirements	•Rusty Hutson, Jr.: 600% of salary •Other Executive Directors: 300% of salary •Lower of shares acquired from LTIP awards held at termination or normal share ownership requirement continues to apply for first year following termination, reducing to 200% of salary for the second year.	Rusty Hutson, Jr. meets the requirement.

Introduction

Part A: Represents the proposed policy which will take effect, subject to the approval of the shareholders, immediately after the 2025 AGM (the

“Directors’ Remuneration Policy”).

Part B: Constitutes the Annual Report on Remuneration sections of the Executive Directors’ Remuneration Report.


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Part A: Directors’ Remuneration Policy

The Directors’ Remuneration Policy below sets out the information required by Part 4 of Schedule 8 to the Large and Medium-Sized Companies and

Groups (Accounts and Reports) Regulations 2008 (as amended).

If approved by Shareholders at the forthcoming AGM on April 9, 2025, the Directors’ Remuneration Policy set out below will replace the existing policy

for which shareholder approval was obtained at the 2022 AGM, and will become binding immediately thereafter.

The main changes from the previous policy are:

•Annual Bonus maximum for the CEO is to be increased to 200% of salary and add an annual bonus maximum for other Executive Directors at

125% of salary with a deferral of 50% of any bonus earned compulsory to which existing Executive Directors who have met their shareholding

requirement are not subject. No deferral will be applicable to any bonus for an existing Executive Director who has met their shareholding

requirement;

•Performance Share Awards maximum is to remain at 325% per annum for the CEO and a new Restricted Share Award of 100% of salary is

introduced; and

•New Performance Share Awards maximum for other Executive Directors at 250% per annum and Restricted Share Award of 75% of salary is

introduced in order to future-proof the policy.

The following table summarizes the Group’s policies in respect of the key elements of our Directors’ remuneration:


Element and Purpose	Remuneration Policy and Operation	Maximum	Performance Measures
Base salary This is the core element of pay and reflects the individual’s role and position within the Group with some adjustment to reflect their capability and contribution.	•Base salaries will typically be reviewed annually, with consideration given to the performance of the Group and the individual, any changes in responsibilities or scope of the role and pay practices in relevant U.S. comparator companies of a broadly similar size and complexity, with due account taken of both market capitalization and turnover. •The Remuneration Committee does not strictly follow benchmark pay data, but instead uses it as one of a number of reference points when considering, in its judgment, the appropriate level of salary. Base salary is paid monthly in cash.	•It is anticipated that salary increases will generally be in line with those awarded to the general workforce. That said, in certain circumstances (including, but not limited to, changes in role and responsibilities, market levels, individual and Group performance), the Remuneration Committee may make larger salary increases to ensure they are market competitive. The rationale for any such increase will be disclosed in the relevant Annual Report & Form 20-F.	n/a
Benefits To provide benefits valued by recipients.	•The Executive Director currently receives standard car and health/ insurance related benefits. •Where appropriate, the Group will meet certain costs relating to Executive Director relocations. •In line with the approach taken for all employees, the Group offers a retirement plan in accordance with subsection 401(k) of the Internal Revenue Code in which the Executive Director may make voluntary pre-tax contributions towards his own retirement. The Group matches the Executive Director’s contributions up to $26 thousand per annum. •The Remuneration Committee reserves the discretion to introduce new benefits where it concludes that it is appropriate to do so, having regard to the particular circumstances and to market practice.	•It is not possible to prescribe the likely change in the cost of insured benefits or the cost of some of the other reported benefits year to year. •Relocation expenses are subject to a maximum limit of 100% of base salary, provided that such expenses may be paid only in the year of appointment and for a further two financial years. •With limited exceptions, the U.S. Section 401(k) defined contribution plan currently provides company matching contributions up to a maximum of $26 thousand per annum. •The Remuneration Committee will monitor the costs of benefits in practice and will ensure that the overall costs do not increase by more than what the committee considers appropriate in all the circumstances.	n/a


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Element and Purpose	Remuneration Policy and Operation	Maximum	Performance Measures
Pension To provide retirement benefits.	•Currently, no element of the Directors’ remuneration is pensionable, and the Group does not operate any pension scheme or other scheme providing retirement or similar benefits. •The Remuneration Committee reserves the discretion to introduce new benefits where it concludes that it is appropriate to do so, having regard to the particular circumstances and to market practice.	•The current Executive Director does not receive a pension contribution. •Any future pension provision will be limited to levels aligned to the contribution levels for the majority of the workforce.	n/a
Annual bonus plan To motivate the Executive Director and incentivize the delivery of performance over a one-year operating cycle, focusing on the short- to medium-term elements of our strategic aims.	•Annual bonus plan levels and the appropriateness of measures are reviewed annually at the commencement of each financial year to ensure they continue to support our strategy. •Once set, performance measures and targets will generally remain unchanged for the year, except to reflect events such as corporate acquisitions or other major transactions where the Remuneration Committee considers it to be necessary in its opinion to make appropriate adjustments. •For Executive Directors who have not yet achieved the required shareholding, 50% will normally be paid in cash, with the remainder deferred as either shares or cash for two years provided continued service. •Deferral is not required for existing Executive Directors who at the time this Remuneration Policy is approved have achieved the required shareholding. •Clawback provisions apply to the annual bonus plan, and malus and clawback will apply to deferred shares in accordance with the Group’s clawback and malus policies.	•The maximum level of annual bonus plan outcomes is 200% of base salary for the CEO and 125% of base salary for other Executive Directors.	•The performance measures applied may be financial or non-financial; quantitative and qualitative; and corporate, divisional or individual and with such weightings as the Remuneration Committee considers appropriate. The metrics and weightings applicable for 2025 are intended to be as follows: •50% adjusted EBITDA per share •25% cash cost per Mcfe •25% sustainability measures •Where a sliding scale of targets is used, attaining the threshold level of performance for any measure will not typically produce a payout of more than 25% of the maximum portion of the overall annual bonus attributable to that measure, with a sliding scale to full payout for maximum performance. •However, the annual bonus plan remains a discretionary arrangement and the Remuneration Committee retains a standard power to apply its discretion to adjust the outcome of the annual bonus plan for any performance measure (from zero to any cap), should it consider that to be appropriate.


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Element and Purpose	Remuneration Policy and Operation	Maximum	Performance Measures
Long-term incentives To motivate and incentivize the delivery of sustained performance over the long-term, and to promote alignment with shareholders’ interests, the Group grants Performance Share Awards.	•Performance Share Awards vest over a period of three years, and are eligible for accrual of applicable Dividend Equivalent Rights during the vesting period. •Restricted Share Awards are subject to service over a three-year period, and are eligible for accrual of applicable Dividend Equivalent Rights during the vesting period. •Once vested the net of tax shares from both the Performance Share and Restricted Awards are subject to a holding period of two years. •Clawback and malus provisions apply to Performance Share Awards and Restricted Share Awards.	•Performance Share Awards may be granted with a maximum value of 325% of salary for the CEO and 250% of salary for the other Executive Directors. •Restricted Share Awards may be granted with a maximum value of 100% of salary for the CEO and 75% of salary for other Executive Directors. •In determining the number of shares subject to an award, the market value of a share shall, unless the Remuneration Committee determines otherwise, be assumed to be the average share price for the five days following the announcement of the Group’s results for the previous financial year.	•The Remuneration Committee may set such performance conditions on Performance Share Awards as it considers appropriate, whether financial or non-financial and whether corporate, divisional or individual. Performance periods may be over such periods as the Remuneration Committee selects at grant, which will not be less than, but may be longer than, three years. •It is intended that the metrics and weightings applicable in 2025 will be as follows: •40% Return on Equity •20% Absolute TSR •20% Relative TSR •20% Emissions •No more than 15% of awards vest for attaining the threshold level of performance conditions. The Remuneration Committee also has a standard power to apply its judgment to adjust the vesting outcome of Performance Share Awards and Restricted Share Awards to take account of any circumstances (including the performance of the Group, any individual or business) should it consider that to be appropriate.


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Element and Purpose	Remuneration Policy and Operation	Maximum	Performance Measures
Share ownership guidelines To further align the interests of the Executive Director with those of shareholders.	•Each Executive Director is expected to build up a prescribed level of shareholding. •Minimum shareholding is 600% of base salary for the CEO and 300% of base salary for other Executive Officers. The Remuneration Committee reserves the power to amend, but not reduce, these levels in future years. •To the extent that the prescribed level has not been reached, the Executive Director will be expected to retain a proportion of the shares vesting under the Group’s share plans until the guideline is met. •Any vested shares from long-term incentives subject to a holding period and any shares awarded in connection with annual bonus deferral will be included for the purpose of the guidelines (discounted for anticipated tax liabilities). •A post-employment shareholding requirement normally applies to shares from long-term investments vesting after the effective date of the Directors’ Remuneration Policy for 2025. The policy requires the Executive Director to hold the shares equivalent to his share ownership guideline at that date, for a period of one year post- employment and reducing to 200% of salary for the second year post- employment.	n/a	n/a
Chairman’s and Non-Executive Directors’ fees To enable the Group to recruit and retain a Chairman of the Board and Non- Executive Directors of the highest caliber.	•The fees paid to the Chairman and Non-Executive Directors aim to be competitive with other U.S. and UK listed peers of equivalent size and complexity. •The fees payable are determined by the Board, and will include incremental committee Chair and additional responsibility fees (as applicable). Directors do not participate in decisions regarding their own fees. •Non-Executive Directors are reimbursed all necessary and reasonable expenses incurred in connection with the performance of their duties and any tax thereon in accordance with the Group’s Non- Executive Director Expense Reimbursement Policy. •No other benefits are envisaged for the Chairman and Non-Executive Directors, but the Group reserves the right to provide benefits, including company related travel and office support.	•Fees are paid monthly in cash. •A proportion of each Non-Executive Directors’ fees may be required to be used for the acquisition of Group shares which must then be held until they cease to be a Director. •The aggregate fees and any benefits of the Chairman and Non-Executive Directors will not exceed the limit from time to time prescribed within the Group’s Articles of Association for such fees. •Any increases actually made will be appropriately disclosed.	n/a


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Choice of Performance Metrics

Diversified’s strategy is to focus on solutions that optimize existing, long-life, and often undervalued U.S. energy assets. This requires a unique modern

field management philosophy that leverages digital tools, scale, vertical integration, and human experience to responsibly manage mature existing

assets, improve environmental performance, and unlock overlooked value. This minimizes traditional exploration and production risks, delivers consistent

free cash flow, and serves a fundamental role in U.S. energy markets. Targets are reviewed each year by the Remuneration Committee and set taking

account of Diversified’s in-year and longer-term goals.

The proposed 2025 annual bonus metrics which comprise adjusted EBITDA per share (50%), cash cost per Mcfe (25%), and sustainability measures

(25%) have been selected as these incentivize a disciplined and responsible approach to growth and delivery of returns to shareholders.

The proposed scorecard of metrics selected for the grants of Performance Share Awards in 2025 comprises Return on Equity (40%), Absolute TSR

(20%), Relative TSR (20%), and Emissions (20%). These have been selected as they reward strong capital management, encourage value enhancing

acquisitions, reward the generation of superior returns to shareholders across the cycle as well as a focus on sustainability.

Service Contracts & Letters of Appointment

The following table summarizes key dates for the service contracts of Rusty Hutson, Jr. effective as of December 31, 2024:


Name	Date of Service Contract	Duration
Rusty Hutson, Jr.	January 30, 2017	Executive Director’s service agreement should be of indefinite duration, subject to termination by the Group or the individual on six months’ notice. The service agreements of all current Executive Directors comply with that policy.

The contract of the current Executive Director, which is available for inspection at the Group’s registered office, contains a payment in lieu of notice

clause which is limited to base salary only. In line with U.S. practice, depending on the circumstances of their severance from service, the Executive

Director may be entitled to certain payments, including previously accrued salary plus 12 months salary. For each current Non-Executive Director, the

effective date of their latest letter of appointment is:


Name	Date of Letter of Appointment	Duration
David E. Johnson	February 3, 2017
Martin K. Thomas	January 1, 2015	Initial period of 12 months, subject to re-election at each AGM of the Group and are terminable on three months’ notice given by either party.
David J. Turner, Jr.	May 27, 2019
Sandra M. Stash	October 21, 2019
Kathryn Klaber	January 1, 2023

Malus and Clawback

The Remuneration Committee may apply malus and clawback to a Performance Share Award, Restricted Share Award, deferred shares under the Annual

Bonus Plan and to cash amounts under the annual bonus plan (clawback only). The relevant circumstances where these powers of recovery may

operate include:

•Any accounting restatement required as a result of the financial statements of any member of the Group’s being materially misstated as a result of

the relevant employee’s material non-compliance with the Group’s financial reporting requirements under all applicable laws and policies;

•Any fraudulent act of the relevant employee (whether proven, admitted or otherwise);

•Any material breach of any term of employment;

•Any material failure in supervision and oversight by the relevant employee;

•Any gross misconduct, material wrongdoing or any material breach of any term of employment by the relevant employee;

•A material error in the calculation of the relevant employee’s performance conditions; or

•Such other exceptional negative circumstances caused by the relevant employee as the Remuneration Committee may reasonably determine,

which may include the Group suffering any serious reputational damage, financial downturn, failure of risk management or corporate failure as a

result of the relevant employee’s action or inaction.

Normally, clawback can operate for up to two years following the vesting of an award or bonus payment.

Travel and Hospitality

The Remuneration Committee has been advised that corporate hospitality, whether paid for by the Group or another, and travel for Directors (and in

exceptional circumstances their families) and any tax thereon may technically come within the applicable rules. As a result, the Remuneration Committee

expressly reserves the right for the committee to authorize such activities within its agreed policies. Note that the Remuneration Committee does not

consider travel and hospitality or the reimbursement of these expenses to form part of benefits in the normal usage of that term.

Differences Between the Policy on Remuneration for Directors from the Policy on Remuneration of Other Staff

While the appropriate benchmarks vary by role, the Group seeks to apply the philosophy behind this policy across the Group as a whole. Where the

Group’s pay policy for Directors differs from its pay policies for groups of staff, this reflects the appropriate market rate position and/or typical practice

for the relevant roles. The Group takes into account pay levels, bonus opportunity and share awards applied across the Group as a whole when setting

the Directors’ Remuneration Policy.

Committee Discretions

The Remuneration Committee will operate the annual bonus plan, Performance Share Awards and Restricted Share Awards according to their respective

rules and the above policy table. The Remuneration Committee retains discretion, consistent with market practice, in a number of respects, in relation to

the operation and administration of these plans.

These discretions include, but are not limited to, the following:


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•The selection of participants;

•The timing of grant of an award/bonus opportunity;

•The size of an award/bonus opportunity subject to the maximum limits set out in the policy table;

•Discretion required when dealing with a change of control or restructuring of the Group;

•Determination of the treatment of leavers based on the rules of the plan and the appropriate treatment chosen;

•Adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events and special dividends); and

•The annual review of performance measures, weightings and targets from year to year and resulting vesting/bonus pay-outs.

While performance measures and targets for annual bonus and Performance Share Awards will generally remain unchanged once set, the Remuneration

Committee has the usual discretions to amend the measures, weightings and targets in exceptional circumstances (such as a major transaction) where

the original conditions would cease to operate as intended. Any such changes would be explained in the subsequent Directors’ Remuneration Report

and, if appropriate, be the subject of consultation with the Group’s major shareholders.

Any use of these discretions would, where relevant, be explained in the Directors’ Remuneration Report.

Recruitment Remuneration Policy

The Group’s recruitment remuneration policy aims to give the Remuneration Committee sufficient flexibility to secure the appointment and promotion of

high-caliber executives to strengthen the management team and secure the skill sets to deliver our strategic aims.

In terms of the principles for setting a package for a new Executive Director, the starting point for the Remuneration Committee will be to apply the

general policy for Executive Directors and structure a package in accordance with that policy, consistent with the relevant requirements.

The annual bonus plan, Performance Share Awards, and Restricted Share Awards including the maximum award levels, will operate as detailed in the

general policy in relation to any newly appointed Executive Director, although, depending on the circumstances, different metrics and or targets may be

set in the first year of appointment. For an internal appointment, any variable pay element awarded in respect of the prior role may either continue on

its original terms or be adjusted to reflect the new appointment as appropriate. For external and internal appointments, the Remuneration Committee

may agree that the Group will meet certain relocation expenses in the year of appointment and for a further two financial years, as it considers

appropriate. For external candidates, it may be necessary to make additional awards in connection with the recruitment to buy-out awards and

entitlements forfeited by the individual on leaving a previous employer.

For the avoidance of doubt, buy-out awards are not subject to a formal cap. Any awards to a newly recruited Executive Director which are not buy-outs

will be subject to the limits for the annual bonus plan and Performance Share Awards as stated in the general policy.

For any buy-outs the Group will not pay more than is necessary in the view of the Remuneration Committee, and will in all cases seek, in the first

instance, to deliver any such awards under the terms of the existing annual bonus plan, Performance Share Awards and Restricted Share Awards. It

may, however, be necessary in some cases to make buy-out awards on terms that are more bespoke than the existing annual bonus plan and

Performance Share Awards and Restricted Share Awards (for example, specific arrangements under Listing Rule 9.4.2).

All buy-outs, whether under the annual bonus plan, Performance Share Awards, Restricted Share Awards or otherwise, will take due account of the

service obligations and performance requirements for any remuneration relinquished by the individual when leaving a previous employer. The

Remuneration Committee will seek, where it is practicable to do so, to make buy-outs subject to what are, in its opinion, comparable requirements in

respect of service and performance.

A new Non-Executive Director would be recruited on the terms outlined in the Remuneration Policy.

Termination Policy Summary

The Remuneration Committee will consider treatments on a termination having regard to all of the relevant facts and circumstances available at that

time. This policy applies both to any negotiations linked to notice periods on a termination and any treatments that the Remuneration Committee may

choose to apply under the discretions available to it under the terms of the relevant plan. The potential treatments on termination under these plans are

as follows:

Annual Bonus Plan

If an Executive Director resigns without “good reason” (e.g. demotion, material reduction in compensation, relocation of principal office location of more

than 200 miles) or is dismissed for cause before the end of the bonus plan year, the right to receive any bonus normally lapses. If an Executive Director

ceases employment before such date by reason of death, injury, ill health, disability, retirement, resignation for good reason, or termination without

cause, or any other reason determined by the Remuneration Committee, the committee may determine that such bonus will be payable pro rata for the

period of time during the year (performance period) that the Executive Director was employed. Similar treatment will apply in the event of a change in

control of the Group, provided, however, that if the Executive Director is terminated without cause or resigns for good reason within 180 days prior to

such change in control, the bonus will be payable without reduction. The rationale is to ensure that the Executive Directors remain with the Group

through completion of the change in control, so as to affect an orderly transition for the Group.

Deferred bonus awards may be accelerated if the Executive Director’s leaving was for reason of death, injury, ill health, disability, retirement, resignation

for good reason, or termination without cause.

Performance Share Awards and Restricted Share Awards

If, during the performance or vesting period, a participant:

•Resigns without good reason or is dismissed for cause, awards lapse in full;

•Dies, awards will be pro-rated by reference to the proportion of the performance or vesting period for which the participant remained employed

subject, in the case of Performance Share Awards to the Group’s performance; or

•Ceases to be employed due to injury, ill health, disability, retirement, resignation for good reason, or termination without cause, or for any other

reason the Remuneration Committee determines, awards are retained subject to the performance conditions, and continue to vest on the original

schedule. In such instance, awards will be pro-rated by reference to the proportion of the performance or vesting period for which the participant


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remained employed. The Remuneration Committee has a standard ability to vary time pro-rating. The Remuneration Committee may exercise its

discretion to allow awards to vest early on cessation in suitable cases. In the event the participant dies or suffers a disability during the holding

period, the holding period may be accelerated.

Performance share awards and Restricted share awards will normally vest in the event of a change of control and shall take into account, amongst other

things, the extent to which any performance criteria have been met (over the shortened performance periods) and the time elapsed since grant (i.e.

prorated).

The Group has the power to enter into settlement agreements with Directors and to pay compensation to settle potential legal claims. In addition, and

consistent with market practice, in the event of the termination of an Executive Director, the Group may make a contribution towards that individual’s

legal fees and fees for outplacement services as part of a negotiated settlement. Any such fees will be disclosed as part of the detail of termination

arrangements. For the avoidance of doubt, the policy does not include an explicit cap on the cost of termination payments.

Consideration of Employment Conditions Elsewhere in the Group

The Group’s general pay and employment conditions will be taken into account when setting Executive Directors’ remuneration.

The same reward principles guide reward decisions for all Group employees, including Executive Directors, although remuneration packages differ to

take into account appropriate factors in different areas of the business:


Base Salary/Benefits/Pension	The Remuneration Committee receives an annual report summarizing the base salaries, benefits and pension arrangements received by each category of Group staff.
Annual Bonus	The majority of salaried employees participate in an annual bonus plan, although the quantum and balance of group, business unit and individual objectives varies by level and nature of role. The Remuneration Committee receives an annual report summarizing the bonus potential and performance metrics used in each of the annual bonus schemes in operation across the Group.
Long-Term Incentives	Key Group employees may receive share incentive awards, both performance and restricted, and may receive awards based on the same or different performance conditions as those for Executive Directors (although the Remuneration Committee reserves the discretion to vary the performance conditions for awards made to employees below Board level). The Remuneration Committee is provided a summary of the long-term incentive plans.

As highlighted in the Engagement with Employees Statement in the Directors’ Report within this Annual Report & Form 20-F, the Group engages with

employees on a range of matters. Employees are not directly consulted in the development of the Remuneration Policy, however, as part of this

employee engagement process there is the opportunity for employees to ask questions and provide feedback on the strategy of the Group, including

how this links to remuneration and how executive remuneration aligns with the wider company pay policy and the Group’s strategy and objectives.

Consideration of Shareholder Views

The Remuneration Committee considers shareholder views received during the year and at each AGM, as well as guidance from shareholder

representative bodies more broadly, when determining the remuneration policy and its implementation. Specifically in connection with the proposed

remuneration policy for 2025, the Remuneration Committee consulted with major shareholders in late-2024 and into 2025 to collect feedback and gauge

shareholder response as a result of which changes have been made to the quantum of the proposals and also to performance metrics used for awards

granted in the Remuneration Policy’s first year.

The Remuneration Committee seeks to build an active and productive dialogue with investors on developments on the remuneration aspects of

corporate governance generally and it will consult with major shareholders in advance of any material change to the structure and/or operation of the

policy and will seek formal shareholder approval for any such change if required.

External Appointments

The Group’s policy is to permit an Executive Director to serve as a non-executive director elsewhere when this does not conflict with the individual’s

duties to the Group, and where an Executive Director takes such a role they may be entitled to retain any fees which they earn from that appointment.

Such appointments are subject to approval by the Chairman.


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Illustrations of Application of Executive Director Remuneration Policy

The following charts show how the remuneration policy for the Executive Director will be applied in 2025 using the assumptions shown overleaf:


Minimum	•Consists of base salary, benefits and pension. •Base salary is the salary to be paid in 2025. •Long-Term Incentives (“LTI”): Consists of full vesting (100%) of Restricted Share Awards (maximum of 100% of base salary). •No pension is provided, only 401(k) match to the extent applicable.
Target	Based on what the Executive Director would receive if performance was on-target (excluding share price appreciation and dividends): •Annual bonus: Consists of the target bonus (50% of maximum opportunity used for illustrative purposes). •LTI: Consists of the target level of vesting (50%) of Performance Share Awards (maximum of 325% of base salary) and full vesting (100%) of Restricted Share Awards (maximum of 100% of base salary).
Maximum	Based on the maximum remuneration receivable (excluding share price appreciation and dividends): •Annual bonus: Consists of maximum bonus of 200% of base salary. •LTI: Consists of full vesting (100%) of Performance Share Awards (maximum of 325% of base salary) and full vesting (100%) of Restricted Share Awards (maximum of 100% of base salary).
Maximum with share price growth	Based on the Maximum scenario set out above but with a 50% share price increase applied to the value of Performance Share Awards.


($ thousands)	Base Salary	RSU Award	Benefits	Benefit Plan(a)	Total Fixed
Rusty Hutson, Jr.	$807	$807	$17	$42	$1,673

(a)Reflects amounts received under the Group’s 401(k) contribution plan and health insurance benefits.

Robert R. (Rusty) Hutson, Jr.


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Part B: Annual Report on Remuneration

The remuneration for the Executive and Non-Executive Directors of the Group who performed qualifying services during the year is detailed below. For

the year ended December 31, 2024, the aggregate compensation paid to the members of our board of directors and our executive officers for services

in all capacities was approximately $4 million.

Executive officers are entitled to matching contributions from the Group of up to $26 thousand per annum into their 401(k) retirement plans. They also

receive a range of core benefits such as life insurance, private medical coverage and annual health screens.

The Non-Executive Directors received no remuneration other than their annual fee. The aggregate fees and any benefits of the Chairman of the Board

and Non-Executive Directors will not exceed the limit from time-to-time prescribed within the Group’s Articles of Association for such fees which is

currently £1,055,000 (approximately $1,350,400) per annum. In addition, non-executive directors are reimbursed all necessary and reasonable expenses

incurred in connection with the performance of their duties and any tax thereon in accordance with the Group’s Non-Executive Director Expense

Reimbursement Policy.

Directors’ remuneration for the years ended December 31, 2024 and 2023:


Executive Director	Rusty Hutson, Jr.
(In thousands)	December 31, 2024	December 31, 2023
Salary/fees	$780	$750
Taxable benefits(a)	17	12
Benefit plan(b)	42	31
Pension(c)	—	—
Total fixed pay	$839	$793
Bonus(d)	1,160	825
Long-term incentives(e)	1,008	303
Total variable pay	$2,169	$1,128
Total remuneration	$3,007	$1,921

Non-Executive Directors - Total Remuneration (In thousands)	December 31, 2024	December 31, 2023
David E. Johnson	$223	$216
Martin K. Thomas	160	155
David J. Turner, Jr.	173	168
Sandra M. Stash	160	156
Kathryn Z. Klaber	160	139
Sylvia Kerrigan	173	160

(a)Taxable benefits were comprised of Group paid life insurance premiums and automobile reimbursements.

(b)Reflects matching contributions under the Group’s 401(k) plan and health insurance benefits.

(c)The Executive Director does not receive a pension provision.

(d)Further details of the bonus outcome for 2024 can be found in Annual Bonus for Executive Directors within this Annual Report & Form 20-F. For 2024, the bonus total

for Rusty Hutson, Jr. represents 148.8% of approved base salary. Subject to the Remuneration Policy, amounts above 100% of salary will be deferred into cash for one

year provided continued service, without additional performance conditions. For 2023, the bonus total for Rusty Hutson, Jr. represented 110.1% of base salary.

Amounts above 100% of salary were deferred into cash for one year provided continued service, without additional performance conditions.

(e)For 2024, the value of the Performance Share Award granted in 2022, including dividend equivalent units (“DEUs”) accrued to date, has been based on the number of

shares and DEUs that will vest and the three-month average share price for the period to December 31, 2024 of $13.96 (£10.87) per share. The overall payout for the

Performance Share Award was 67% and the grant share price for the awards was $30.47 (£23.36) per share and, accordingly, the relevant figures are reflective of a

decrease of 54% in the Group’s share price over the three year period. For 2023, the value of the Performance Share Award granted in 2021, including DEUs accrued to

the vesting date, has been restated to reflect the actual share price on the vesting date of $11.60 per share. The values disclosed last year were estimated using the

three-month average share price for the period to December 31, 2023 of £13.62 per share using an exchange rate of £1:$1.24055.

2024 Annual Bonus for Executive Director

For 2024 the overall bonus plan for the Executive Director was a maximum of 175% of base salary with an actual achieved formulaic bonus of 148.8%.

The Group delivered a strong operational performance in 2024. The following table summarizes the performance targets and outcomes which led to the

Remuneration Committee’s decisions as to the payout percentages.


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The targets were as follows:


Measure	Threshold(a)	Target(a)	Maximum (100% Payout)	Actual	Performance	% of Total Bonus	Payout %
Adjusted EBITDA per share(b)	$8.00	$8.21	$8.42	$10.79	100%	50%	50%
Cash cost per Mcfe(c)	$1.35	$1.30	$1.27	$1.35	25%	20%	5%
Sustainability (see below)						30%	30%
Total % of maximum							85%
Total % of salary - Rusty Hutson, Jr.							148.8%

(a)Threshold was 25% and Target was 75% for the adjusted EBITDA per share and cash cost per Mcfe measures and 0% to 50% and 0% to 75%, respectively, for the

sustainability measures, but for all measures stretch allowed inclusion of acquisitions.

(b)Actual results for the adjusted EBITDA per share measure utilized fully diluted weighted average shares outstanding.

(c)Actual results for the cash cost per Mcfe measure excluded 2024 acquisitions and irregular G&A expense.

In respect of the non-financial performance targets set for the Executive Director, these were set against a range of strategic targets at the start of the

year. The targets set were aligned to the Group’s corporate objectives and strategy. Details of the measures, to the extent they are not commercially

sensitive are shown below.


SUSTAINABILITY - ENVIRONMENTAL
Target	Actual	Performance	% of Total Bonus	Payout %
Reduce methane intensity(a) Threshold: 0.80 / Target: 0.76 / Stretch: 0.70	0.70	Achieved: 100%	10.00%	10.00%
Pneumatic valve replacement(b) Threshold: N/A / Target: N/A / Stretch: 100%	100%	Achieved: 100%	5.00%	5.00%
			15.00%	15.00%

SUSTAINABILITY - SOCIAL
Target	Actual	Performance	% of Total Bonus	Payout %
Reduce TRIR(a) Threshold: 1.19 / Target: 1.07 / Stretch: 0.95	0.89	Achieved: 100%	2.50%	2.50%
Reduce LTIR(a) Threshold: 0.88 / Target: 0.80 / Stretch: 0.71	0.38	Achieved: 100%	2.50%	2.50%
Reduce MVA(a) Threshold: 0.65 / Target: 0.59 / Stretch: 0.52	0.34	Achieved: 100%	5.00%	5.00%
			10.00%	10.00%

SUSTAINABILITY - GOVERNANCE
Target	Actual	Performance	% of Total Bonus	Payout %
Development training(c) Threshold: 50% / Target: 60% / Stretch: 75%	86%	Achieved: 100%	5.00%	5.00%
			5.00%	5.00%

(a)Refer to Key Performance Indicators within this Annual Report & Form 20-F for additional information regarding these metrics.

(b)The actual result reflects the percentage of pneumatic valves eliminated or replaced with site-specific instrument air or solar solutions.

(c)The actual result reflects the percentage of LinkedIn Learning development training courses that were completed during the year ended December 31, 2024.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Long-Term Incentives Outcome

2022 LTIP Awards

The performance period in respect of the Performance Share Award granted in 2022 came to an end on December 31, 2024. Performance conditions

were Return on Equity (40%), Absolute TSR (30%), Relative TSR (10%) and Methane Intensity (20%) targets measured over three years. The targets

and outcomes are set out below:


	% of Total Award	Threshold	Maximum (15% of maximum)	Achieved (100% of maximum)	Vesting % of Component	Payout %(a)
Three-Year Average ROE(b)	40%	15%	25%	30%	100%	40%
Absolute TSR (per annum)	30%	10%	20%	0%	0%	0%
Three-Year TSR v FTSE 250	10%	50th percentile	75th percentile	65th percentile	65%	7%
Three-Year Methane Intensity Reduction	20%	10%	20%	22%	100%	20%
Performance factor						67%

(a)Calculated as % of total award multiplied by vesting % of component.

(b)Calculated as (adjusted EBITDA - recurring capital expenditures - interest expense) / invested equity.

Based on the vesting percentages above, the number of shares expected to vest in March 2025 and their estimated value (based on the three-month

average share price to December 31, 2024 of £10.870 per share ($13.96 per share based upon a GBP:USD exchange rate of £1:$1.2837) are as follows:


	Maximum number of shares(a)	Number of shares to lapse(b)	Number of Shares to vest(c)	Estimated value at vesting(d)	Grant date face value of awards vesting(e)	Impact of share price on vesting(f)
Rusty Hutson, Jr.	107,830	35,591	72,239	$1,008,456	$2,201,122	$(1,192,666)

(a)Includes 37,729 dividend equivalent units accrued over the performance period to date in the maximum number of shares that will vest in March 2025.

(b)Includes 12,457 dividend equivalent units accrued over the performance period to date in the number of shares to lapse in March 2025.

(c)Includes 25,272 dividend equivalent units accrued over the performance period to date in the number of shares to vest in March 2025.

(d)Based on the three-month average share price to December 31, 2024 of $13.96 (£10.87) per share.

(e)Based on the number of shares vesting multiplied by the share price used to calculate the award of $30.47 (£23.36), being the average share price over the five-day

period commencing on March 22, 2022, the date the Group issued its final 2021 results. The award was based upon a GBP:USD exchange rate of £1:$1.3042. The date

of grant was March 15, 2022.

(f)The grant share price for the award was $30.47 (£23.36) and accordingly the relevant figures are reflective of a decrease of 54% in the Group’s share price over the

three year period.

Share Awards Granted in 2024

2024 LTIP Awards

During the year, the Executive Director received a Performance Share Award (conditional shares), which may vest after a three-year performance period

which will end on December 31, 2026, based on the achievement of stretching performance conditions.


	Value of Award as a % of Base Salary	Face Value of Award ($)	Number of Shares
Rusty Hutson, Jr.	325%	$2,535,000	227,151

In accordance with the ongoing policy, the share price used to calculate the award was $11.16 (£8.83), being the average share price over the five-day

period commencing on March 19, 2024, the date that the Group issued its final 2023 results. The awards are based upon a GBP:USD exchange rate of

£1:$1.264, which was the exchange rate at the date of grant. The date of grant was March 25, 2024. The 2024 LTIP Awards will vest following

completion of the performance period (January 1, 2024 - December 31, 2026), and no later than March 31, 2027, and vested shares will also be subject

to a further two-year holding period. Before approving the number of shares to be awarded the Committee engaged in fulsome discussion as to whether

to apply its discretion to reduce the award value in light of the lower share price compared to the share price used for the prior year’s grant. The

Remuneration Committee determined that using the average share price over the five day period prior to grant remained appropriate in the

circumstances, as has been the Group’s policy for several years. The Remuneration Committee has certain discretion to review the outcome of the

award upon vesting and may consider adjustments in certain circumstances if the share price used could result in an unintended result. In its

deliberation, the Remuneration Committee considered the stretching and robust nature of the performance conditions used in the LTIP, and noted that

the most recent LTIP vesting outcomes were significantly lower than maximum at 67% and 40%, respectively. As of the date of this report the share

price in March 2025 is similar to the share price at the time the 2024 LTIP award was made, which indicates so far that a reduction in the value of the

award was not necessary. The Remuneration Committee will keep this under review.

The performance conditions are a weighted mix of Return on Equity (40%), Absolute TSR (30%), Relative TSR (10%) and Emissions (20%) targets

measured over three years as described below. These measures encourage the generation of sustainable long-term returns to shareholders. In

determining the level of vesting, the Remuneration Committee will consider that the outcome of the measurement reflects the underlying performance

or financial health of the Group.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Return on Equity (40% of Total Award)		Absolute TSR (30% of Total Award)
Three-Year Average ROE(a)	% of that Part of the Award that Vests	Three-Year TSR	% of that Part of the Award that Vests
Below 15% per annum	0%	Below 10% per annum	0%
15% per annum	15%	10% per annum	15%
25% per annum or above	100%	20% per annum or above	100%
15% to 25% per annum	Pro rata straight-line between 15% and 100%	10% to 20% per annum	Pro rata straight-line between 15% and 100%

Relative TSR (10% of Total Award)		Emissions (20% of Total Award)
Three-Year TSR v FTSE 250	% of that Part of the Award that Vests	Emissions over Three Years	% of that Part of the Award that Vests
Below median	0%	Below 8% Methane Intensity Reduction	0%
Median	15%	8% Methane Intensity Reduction	15%
Upper quartile or above	100%	15% Methane Intensity Reduction	100%
Median to upper quartile	Pro rata straight-line between 15% and 100%	8% to 15% Methane Intensity Reduction	Pro rata straight-line between 15% and 100%

(a)Calculated as adjusted EBITDA - recurring capital expenditures - interest expense) / invested equity.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Outstanding Executive Director Share Plan Awards

Details of all outstanding share awards as of December 31, 2024 made to Executive Director are set out below:


Rusty Hutson, Jr.
Award Type	Exercise Price (£)	Grant Date	Interest at January 1, 2024	Awards Granted in the Year	Accrued Dividend Equivalents	Awards Exercised in the Year	Awards Lapsed in the Year	Interest at December 31, 2024(a)	Exercise/Vesting Period
PSU		March 24, 2024	—	227,151	37,880	—	—	265,031	March 2027	(b)
PSU		March 21, 2023	124,051	—	10,697	—	—	134,748	March 2026	(c)
PSU		March 15, 2022	99,269	—	8,561	—	35,591	72,239	March 2025	(d)
Options	£24.00	May 9, 2019	6,600	—	—	—	—	6,600	May 2022 - May 2029	(e)
Options	£16.80	April 14, 2018	64,333	—	—	—	—	64,333	May 2021 - May 2028	(f)

(a)A performance factor of 67% was applied to 70,101 of the awards granted to Mr. Hutson in March 2022, and 37,729 dividend equivalent units accrued over the

performance period to date, resulting in remaining interest of 72,239 total units vesting in March 2025.

(b)Refer to Share Awards Granted in 2024 above for details of performance conditions.

(c)Refer to the Group's 2023 Annual Report & Form 20-F for details of performance conditions.

(d)Refer to the Group's 2022 Annual Report & Form 20-F for details of performance conditions.

(e)Options granted on May 9, 2019 with an exercise price of £24.00 per share. Consists entirely of vested but unexercised options.

(f)Options granted on April 14, 2018 with an exercise price of £16.80 per share with a three-year ratable vesting period. Consists entirely of vested but unexercised options.

During the year ended December 31, 2024, the highest closing price of the Group’s shares was $16.97 (£13.44) and the lowest closing price was $10.90

(£8.20). At December 31, 2024 the closing share price was $16.80 (£13.44).

Statement of Directors’ Shareholding & Share Interests

The table below details, for each Director, the total number of Directors’ interests in shares at December 31, 2024, which has not changed as of the

date of this report:


	Shareholding	Shareholding Required (% of Salary)	Compliance With Share Ownership Guidelines	Share Interests
Rusty Hutson, Jr.	1,234,134	300%	ü	542,951	(a)
David E. Johnson	23,750	–	(b)	—
Martin K. Thomas	113,850	–	(b)	—
David J. Turner, Jr.	33,087	–	(b)	—
Sandra M. Stash	4,092	–	(b)	—
Kathryn Z. Klaber	2,912	–	(b)	—
Sylvia Kerrigan	3,181	–	(b)	—

(a)A performance factor of 67% was applied to 70,101 of the awards granted to Mr. Hutson in March 2022 and 37,729 dividend equivalent units accrued over the

performance period to date, resulting in remaining interest of 72,239 total units vesting in March 2025. As of December 31, 2024, 70,933 vested options remained

unexercised. All other awards were unvested as of December 31, 2024.

(b)The Non-Executive Directors purchase shares twice annually pursuant to the Non-Executive Director Share Purchase Program implemented in 2022. Shares purchased

under the Non-Executive Director Share Purchase Program must be held until retirement from the Board. While this is not part of the Share Ownership Guidelines, each

Non-Executive Director is in compliance with the parameters of the Non-Executive Director Share Purchase Program.

Payments to Past Directors

Robert Post retired as a Board member in April 2020. Mr. Post continued to provide advice to the Board post-retirement as a consultant, receiving fees

in 2024 of $97,500.

Payments for Loss of Office

No payments for loss of office were made during the year.

Executive Director Serving as Non-Executive Directors of Other Companies

During the year, the Executive Director did not receive any Board-related remuneration for his service as a Non-Executive Director of any other

company.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Performance Graph & CEO Remuneration Table

The Regulations require a line graph showing the TSR on a holding of shares in the Group since admission to the Premium Segment of the Main Market

of the LSE to the most recent financial year end following such admission, as well as the TSR for a hypothetical holding of shares in a broad equity

market index for the same period. The Group was admitted to the Main Market on May 18, 2020 and the graph below covers that period, comparing the

Group’s TSR to that of the FTSE 250 (excluding Investment Trusts), an index of which the Group is a constituent. The Remuneration Committee is

satisfied that the CEO’s remuneration is supported by the TSR performance data presented below.

Total Shareholder Return

Rebased at 100 on May 18, 2020

Source: Eikon by Refinitiv

The table below details certain elements of the CEO’s remuneration over the same period as presented in the TSR Index graph:


(In thousands)
Year	CEO	Single Figure of Total Remuneration(a)	Annual Bonus Pay-Out Against Maximum %	Long-Term Incentive Vesting Rates Against Maximum Opportunity %
2024	Rusty Hutson, Jr.	$3,007	85%	67%
2023	Rusty Hutson, Jr.	$1,921	63%	40%
2022	Rusty Hutson, Jr.	$4,431	85%	71%
2021	Rusty Hutson, Jr.	$2,795	85%	45%
2020	Rusty Hutson, Jr.	$2,965	94%	100%

(a)For 2024, the single figure of total remuneration includes an estimated value for the LTIP component. For the years 2023, 2022, 2021, and 2020, the single figure of

total remuneration has been restated to reflect the actual value for the LTIP component. Refer to the Directors’ remuneration table in Part B: Annual Report on

Remuneration within this Annual Report & Form 20-F for additional information.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Annual Change in Remuneration of Each Director Compared to Employees

The table below presents the year-on-year (2020-2024) percentage change in remuneration for each Director and all employees of the Group and its

subsidiaries.


	% Change from 2023 to 2024			% Change from 2022 to 2023			% Change from 2021 to 2022			% Change from 2020 to 2021			% Change from 2019 to 2020
Name	Salary/ Fee	Annual Bonus	Taxable Benefits	Salary/ Fee	Annual Bonus	Taxable Benefits	Salary/ Fee	Annual Bonus	Taxable Benefits	Salary/ Fee	Annual Bonus	Taxable Benefits	Salary/ Fee	Annual Bonus	Taxable Benefits
Rusty Hutson, Jr.	4%	41%	42%	4%	(23%)	—%	4%	21%	20%	3%	(7%)	400%	59%	55%	—%
David E. Johnson	3%	—%	—%	8%	—%	—%	19%	—%	—%	3%	—%	—%	66%	—%	—%
Martin K. Thomas	3%	—%	—%	7%	—%	—%	14%	—%	—%	2%	—%	—%	27%	—%	—%
David J. Turner, Jr.	3%	—%	—%	8%	—%	—%	16%	—%	—%	3%	—%	—%	132%	—%	—%
Sandra M. Stash	3%	—%	—%	8%	—%	—%	14%	—%	—%	2%	—%	—%	520%	—%	—%
Kathryn Z. Klaber(a)	15%	—%	—%	100%	—%	—%	—%	—%	—%	2%	—%	—%	—%	—%	—%
Sylvia Kerrigan(b)	8%	—%	—%	33%	—%	—%	445%	—%	—%	100%	—%	—%	—%	—%	—%
All employees, excluding Directors	4%	4%	—%	4%	4%	—%	5%	5%	—%	11%	(2%)	—%	4%	4%	—%

(a)David J. Turner, Jr. was appointed to the Board on May 27, 2019.

(b)Sandra M. Stash was appointed to the Board on October 21, 2019.

(c)Kathryn Z. Klaber was appointed to the Board on January 1, 2023.

(d)Sylvia Kerrigan was appointed to the Board on October 11, 2021.

CEO to Employee Pay Ratio

Although the Group does not have 250 full time equivalent UK employees, the Group provides a CEO to employee pay ratio on a voluntary basis below.

The Remuneration Committee is satisfied that the CEO to employee pay ratio is consistent with the Group’s overall aim to ensure its employees are

rewarded fairly and competitively for their contributions.


Year	Method	25th Percentile Pay Ratio	Mean Pay Ratio	75th Percentile Pay Ratio
2024	Option A	27:1	19:1	18:1
2023	Option A	25:1	17:1	16:1
2022	Option A	28:1	19:1	17:1
2021	Option A	44:1	30:1	28:1
2020	Option A	55:1	30:1	14:1

Notes to the CEO to employee pay ratio:

(1)We have used Option A with figures as of December 31, 2024, following guidance that this is the preferred approach of some proxy advisors and

institutional shareholders. Option A captures all relevant pay and benefits for all employees.

(2)The ratios shown are representative of the 25th percentile, mean and 75th percentile pay for all employees within the Group during the 2024

calendar year.

(3)The CEO pay ratio is based on the taxable income for all employees employed for the duration of calendar year 2024 as reported on U.S. IRS Form

W-2, Wage and Tax Statement.

Relative Importance of Spend on Pay

The table below details the change in total employee pay between 2023 and 2024, compared with distributions to shareholders by way of dividend or

share buybacks.


(In thousands)	2024	2023	% Change
Total gross employee pay	$133,024	$124,834	7%
Dividends/share buybacks	104,994	179,089	(41%)

The number of employees as of December 31, 2024 was 1,589, as compared to 1,603 employees as of December 31, 2023.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Statement of Voting at General Meeting

The following table shows the results of the binding Remuneration Policy vote at the April 26, 2022 AGM and the advisory Directors’ Remuneration

Report vote at the May 10, 2024 AGM.


	(Binding Vote)		(Advisory Vote)
	Approval of the Directors’ Remuneration Policy		Director Remuneration Report
	Total number of votes	% of votes cast	Total number of votes	% of votes cast
For	27,783,031	83%	25,389,754	92%
Against	5,793,079	17%	2,133,133	8%
Votes withheld	1,164,541		143,368

Shareholder Engagement

At the 2024 AGM, while shareholders approved most of the resolutions with majorities in excess of 99%, Resolution 19 (Amendment to 2017 Equity

Incentive Plan to increase the number of shares available under the Plan), while receiving 74% of the vote "FOR", did not meet the 75% threshold to

pass. The UK Corporate Governance Code requires that companies provide an update to the market within six months of an AGM where more than 20%

of shareholders have voted against a resolution. This statement provides an update on the actions that the Group has taken.

Following the AGM, the Group consulted and engaged with a number of shareholders who voted against the resolutions to better understand their

concerns. The Directors are thankful to the shareholders for sharing their views. They understand that the negative vote was principally related to the

disconnect between traditional equity compensation plans in the United States, the Group’s primary operating market. In particular, UK shareholders

were concerned that the proposed changes could have resulted in new issuances under the plan that would be in excess of the normal 10% in 10 years

dilution limit. The dialogue with the shareholders has highlighted that there remains strong support for the Group’s equity incentive arrangements and at

the upcoming AGM shareholders will be asked to approve changes to the dilution limits, in order to simplify them and to bring them into line with UK

norms, including a 10% in 10 years limit on the use of new issue or treasury shares.

The Board has discussed the feedback received in detail and continues to actively dialogue with shareholders on the equity incentive and compensation

arrangements.

Implementation of Remuneration Policy for 2025

Base Salary

The Executive Director’s base salary for 2025 will be as follows:

•Rusty Hutson, Jr: $807,128

For 2025, the Remuneration Committee approved an increase to the CEO’s salary by 3.5%. This compares to increases across the Group ranging from

0% to 7% based on performance, with an average of 3.5%. It is anticipated that increases for the remainder of the life of the policy will be in-line with

the range of the workforce.

Pension: The Executive Director does not receive a pension provision.

Benefits: The Executive Director receives life insurance and automobile benefits, and matching contributions under the Group’s 401(k) plan. There is

no current intention to introduce additional benefits in 2025.

Annual Bonus: Subject to approval of the Policy, the overall 2025 bonus plan maximum will be 200% of base salary for Rusty Hutson, Jr. and will be

based on a range of targets relating to adjusted EBITDA per share (50%), cash cost per Mcfe (25%), and sustainability measures (25%).

Due to issues of commercial sensitivity, we do not believe it is in shareholders’ interests to disclose any further details of these targets on a prospective

basis. However, the Remuneration Committee is committed to adhering to principles of transparency in terms of retrospective annual bonus target

disclosure and will, therefore, provide appropriate and relevant levels of disclosure for the bonus targets applied to the 2025 bonus (and performance

against these targets) in next year’s Director’s Remuneration Report.

Bonuses are payable in cash. For Executive Directors who have not yet achieved the required shareholding, 50% will be deferred as either shares or

cash for two years provided continued service. Current Executive Directors who have met their shareholding guidelines will not be required to defer any

of the annual bonus.

Long-Term Incentives: Subject to approval of the Policy, Performance Share Awards will be made in 2025 to Rusty Hutson, Jr. with shares worth

325% of salary and Restricted Share Awards with shares worth 100% of salary. The share price used to calculate the number of shares subject to the

award will be based on the average share price over the five-day period commencing on the date that the Group issues its final 2024 results. These

awards will vest three years after grant, and will also be subject to a further two-year holding period after the initial three-year period to vesting.

The performance conditions for the Performance Share Award will be a mix of Return on Equity (40%), Absolute TSR (20%), Relative TSR (20%) and

Emissions (20%) targets measured over three years as described below. These are measures which encourage the generation of sustainable long-term

returns to shareholders. When determining the level of vesting the Remuneration Committee will also consider that the outcome of the measurement

reflects the underlying performance or financial health of the Group.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance


Return on Equity (40% of Total Award)		Absolute TSR (20% of Total Award)
Three-Year Average ROE	% of that Part of the Award that Vests	Three-Year Absolute TSR	% of that Part of the Award that Vests
Below 15% per annum	—%	Below 10% per annum	—%
15% per annum	15%	10% per annum	15%
25% per annum or above	100%	20% per annum or above	100%
15% to 25% per annum	Pro rata straight-line between 15% and 100%	10% to 20% per annum	Pro rata straight-line between 15% and 100%

Relative TSR (20% of Total Award)		Emissions (20% of Total Award)
Three-Year TSR v Bespoke Peer Group(a)	% of that Part of the Award that Vests	Emissions during 2026 - 2027 over Baseline(b)	% of that Part of the Award that Vests
Below median	—%	Below 5% emissions reduction	—%
Median	15%	5% emissions reduction	15%
Upper quartile or above	100%	10% emissions reduction	100%
Median to upper quartile	Pro rata straight-line between 15% and 100%	5% to 10% emissions reduction	Pro rata straight-line between 15% and 100%

(a)Comprised of Amplify Energy Corp, Berry Corporation, CNX Resources Corp, Granite Ridge Resources, Highpeak Energy, Mach Natural Resources, Northern Oil and Gas,

Riley Exploration Permian, Ring Energy, TXO Partners, Vital Energy, and W&T Offshore.

(b)Baseline emissions number against which the reductions will be measured will be calculated over the course of 2025 and subject to final Remuneration Committee

approval.

Non-Executive Directors’ Fees

David E. Johnson will receive an annual fee of £174,000 (or $222,720) as Chairman. Each Non-Executive Director receives a base annual fee of

£105,000 (or $134,400), with additional fees as noted below (table in thousands, except rates).


	GBP	Exchange Rate	USD
David J. Turner, Jr.(a)	£135	1.28	$173
Sandra M. Stash(b)	125	1.28	160
Sylvia Kerrigan(c)	135	1.28	173
David E. Johnson	174	1.28	223
Martin K. Thomas(d)	125	1.28	160
Kathryn Z. Klaber(e)	125	1.28	160
Total	£819		$1,049

(a)Includes Audit & Risk Committee Chair fee of £30,000 (or $38,400).

(b)Includes Sustainability & Safety Committee Chair fee of £20,000 (or $25,600).

(c)Includes Senior Independent Director fee of £10,000 (or $12,800) and Remuneration Committee Chair fee of £20,000 (or $25,600).

(d)Includes Vice Chair fee of £20,000 (or $25,600).

(e)Includes Nomination & Governance Committee Chair fee of £20,000 (or $25,600).


/s/ David J. Turner, Jr.	/s/ David E. Johnson	/s/ Sandra M. Stash
David J. Turner, Jr.	David E. Johnson	Sandra M. Stash
Chair of the Remuneration Committee	Chair of the Board and Member of the Remuneration Committee	Member of the Remuneration Committee
March 17, 2025	March 17, 2025	March 17, 2025

The Sustainability & Safety Committee’s Report

Committee Composition

•Sandra M. Stash, Chair

•David E. Johnson

•Kathryn Z. Klaber

Key Objective

The Sustainability & Safety Committee acts on behalf of the Board and the shareholders to oversee the practices and performance of the Group with

respect to health and safety, business ethics, conduct and responsibility, social affairs, the environment and broader sustainability issues. As part of the

Group’s overall sustainability actions, the Sustainability & Safety Committee oversees the Group’s climate scenario analysis planning and performance

against goals and ensures adherence to the recommended TCFD disclosures for use by investors, lenders, insurers and other stakeholders.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Overview

The Sustainability & Safety Committee assesses the Group’s overall sustainability performance and provides input into the Annual Report & Form 20-F,

the Sustainability Report and other disclosures on sustainability. It also advises the Remuneration Committee on metrics relating to sustainable

development, GHG and other emissions, regulatory compliance, community engagement and other social goals, as well as health and safety that apply

to executive remuneration.

The Sustainability & Safety Committee reviews the Group’s Sustainability and Safety plans and reviews execution of the plan and audit outcomes. In

addition, the Sustainability & Safety Committee reviews and considers external stakeholder perspectives in relation to the Group’s business, and reviews

how the Group addresses issues of stakeholder concern that could affect its reputation and license to operate.

The overall accountability for sustainability and safety is with the President and Chief Financial Officer and the Senior Leadership Team, including the

Executive Vice President of Operations, Chief Human Resources Officer, the Senior Vice President of EHS and the Senior Vice President of Sustainability,

who are assisted by the EHS team.

Key Matters Discussed by the Committee

During the past year the Sustainability & Safety Committee:

•Established and reviewed the Group’s sustainability and safety strategies and assessed the Group’s performance;

•Continued the review program to align executive management remuneration with key safety and sustainability performance indicators and metrics,

including factoring GHG reductions into long-term incentives, that has been communicated to the Remuneration Committee;

•Engaged with the leadership of the Group to understand the diversity profile of the Group’s workforce;

•Engaged with a consortium of advisers, comprising leading global environmental consultancies and other strategic advisers, and continued to

implement the recommendations set forth by the TCFD with the exception of reporting on Scope 3; and

•Reviewed the Group’s sustainability related communications, including the composition and approval of the Group’s 2023 Sustainability Report

and preparation for issuance of the 2024 Sustainability Report.

Committee Activities by Focus Area

During 2024, the Sustainability & Safety Committee met regularly to review and discuss a range of prioritized topics. These topics included (i) the

safe and responsible operation of the Group’s upstream and midstream assets; (ii) environmental protection and conservation activities; (iii) the Group’s

approach to managing climate risk, (iv) the Group’s emissions reduction capital programs; and (v) the Group’s plugging business. The Sustainability &

Safety Committee also focused on the following:

Process Safety

The Executive Vice President of Operations presented an overview of the Group’s process safety approach and identification of high-risk facility

performance, as well as comparable performance benchmarking against industry peers.

Corporate Scorecard Metrics Oversight

•The Sustainability & Safety Committee reviewed the quantitative and qualitative drivers impacting the Group’s personnel safety, emissions

management, environmental performance, and asset retirement metrics that support performance analysis.

•The Sustainability & Safety Committee reviewed and discussed the Group’s incident rate for the year. The Group created and empowered a new

Safety Strategy Committee to address safety culture survey findings, including identifying and advancing specific areas for improvement and

accountability. The Group also established monthly Foreman-Led safety meetings and regular Safety Task Force meetings, which have lead to

meaning improvements and interactions.

Sustainability Rating Agency Scorecard

The Sustainability & Safety Committee reviewed the Group’s various third-party sustainability rating scores, including analysis of the process and review

of scorecards to determine targeted areas of improvement.

Climate Review

The Sustainability & Safety Committee engaged the support of industry and internationally recognized consultants and advisers to help the Group

update its climate scenario analysis and advance its work on governance, strategy, risk management and metrics as set forth under the TCFD. The

Sustainability & Safety Committee oversaw the Group’s engagement with the GHG emissions inventory and associated scenario analyses and remains

actively engaged in setting targets in accordance with the recommendations. The Sustainability & Safety Committee has considered the relevance of

material climate-related matters when preparing this Annual Report & Form 20-F.

Climate topics reviewed at the Sustainability Committee meetings and/or effectuated during 2024 included:

•Progress on 2024 emission reduction goals

•Long-term strategy for asset retirement of Company-owned wells and third-party owned or abandoned wells

•U.S. and UK climate regulations and reporting requirements and potential impact thereof

•Capital budgets and expenditures for emission reduction and other climate initiatives

•Environmental-related KPIs for executive remuneration

•Environmental considerations in M&A screening and due diligence processes

•OGMP 2.0 Gold Standard certification progress and actions

•Emergency response readiness, including stakeholder communications and business continuity

Acquisition Due Diligence

Adding emphasis to its oversight of the Group’s investment activities, the Sustainability & Safety Committee stayed apprised of the progress and

assessment of the Group’s emissions screening efforts to aid in its assessment that proposed acquisitions and other capital investments have on its

consolidated GHG emissions profile and associated publicly stated targets.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Corporate Governance

Emission Reduction Initiative

The Sustainability & Safety Committee engaged in strategic discussions with senior management regarding its capital program for emissions reductions,

including regular updates on the deployment and success of handheld detection equipment and aerial LiDAR surveys, as well as the replacement of

pneumatic valves.

Oil & Gas Methane Partnership Recognition

The Sustainability & Safety Committee supported the Group’s efforts in achieving the OGMP 2.0 Gold Standard Pathway designation in recognition of the

Group’s demonstrated commitment to set aggressive and achievable multi-year plans designed to accurately measure and transparently report its efforts

to reduce methane emissions.

Committee Effectiveness

The Sustainability & Safety Committee performed a critical analysis internal review and evaluation on itself, as part of its annual self-review process. No

significant areas of concern were raised.

Membership

The formation of a Sustainability & Safety Committee is not a recommendation under the current UK Corporate Governance Code. The Group and the

Board, however, consider such a committee to be an imperative given the operational footprint of the business and the evolving operational, regulatory,

social and investment markets within which the Group operates.

The Sustainability & Safety Committee is currently comprised of the Non-Executive Chairman and two Independent Non-Executive Directors: Sandra M.

Stash, the Sustainability & Safety Committee Chair, David E. Johnson and Kathryn Z. Klaber. Benjamin Sullivan, Senior Executive Vice President, Chief

Legal & Risk Officer and Corporate Secretary acts as Secretary to the committee.

The Sustainability & Safety Committee has extensive and relevant experience in EHS and social matters through their other business activities. For one

example, Ms. Stash formerly served as Executive Vice President — Safety, Operations, Engineering, and External Affairs for Tullow Oil until her

retirement.

Meetings and Attendance

The Sustainability & Safety Committee met six times during 2024 and twice thus far in 2025. The Sustainability & Safety Committee also regularly meets

in private executive session at the end of its committee meetings, without management present, to ensure that points of common concern are identified

and that priorities for future attention by the committee are agreed upon. The Chair of the Sustainability & Safety Committee keeps in close contact with

the Chief Legal & Risk Officer, the Senior Vice President of Sustainability, the Senior Vice President of EHS and the EHS team and external consultants

between meetings of the committee. For Sustainability & Safety Committee meeting attendance for each Director refer to the Directors’ Report within

this Annual Report & Form 20-F.

The list below details the members of the Senior Leadership Team who were invited to attend meetings as appropriate during the calendar year.

•Bradley G. Gray (President and Chief Financial Officer)

•Benjamin Sullivan (Senior Executive Vice President, Chief Legal & Risk Officer, and Corporate Secretary)

•Maverick Bentley (Executive Vice President of Operations)

•Paul Espenan (Senior Vice President of Environmental, Health and Safety)

•Teresa Odom (Senior Vice President of Sustainability)

•Mark Kirkendall (Executive Vice President, Chief Human Resources Officer)

Responsibilities and Terms of Reference

The Sustainability & Safety Committee’s main duties are:

•Overseeing the development and implementation by management of policies, compliance systems, and monitoring processes to ensure compliance

by the Group with applicable legislation, rules and regulations;

•Establishing with management long-term emissions, climate and social sustainability and, EHS goals and evaluating the Group’s progress against

those goals;

•Advising management on implementing, maintaining and improving environmental and social sustainability and EHS strategies, implementation of

which creates value consistent with long-term preservation and enhancement of shareholder value;

•Considering and advising management of emerging environmental and social sustainability issues that may affect the business, performance or

reputation of the Group and makes recommendations, as appropriate, on how management can address such issues;

•Monitoring the Group’s risk management processes related to environmental and social sustainability and EHS with particular attention to managing

and reducing environmental risks and impacts; and

•Reviewing handling of incident reports, results of investigations into material events, findings from environmental and social sustainability and EHS

audits and the action plans proposed pursuant to those findings.

The Sustainability & Safety Committee has formal terms of reference which can be viewed on the Group’s website.

/s/ Sandra M. Stash

Sandra M. Stash

Chair of the Sustainability & Safety Committee

March 17, 2025


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Group Financial Statements


	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)	97
Group Financial Statements	99
Consolidated Statement of Comprehensive Income	99
Consolidated Statement of Financial Position	100
Consolidated Statement of Changes in Equity	101
Consolidated Statement of Cash Flows	102
Notes to the Group Financial Statements	103
Note 1 - General Information	103
Note 2 - Basis of Preparation	103
Note 3 - Material Accounting Policies	105
Note 4 - Significant Accounting Judgments & Estimates	109
Note 5 - Acquisitions & Divestitures	110
Note 6 - Revenue	114
Note 7 - Expenses by Nature	114
Note 8 - Taxation	116
Note 9 - Earnings (Loss) Per Share	119
Note 10 - Natural Gas & Oil Properties	120
Note 11 - Property, Plant & Equipment	120
Note 12 - Intangible Assets	122
Note 13 - Derivative Financial Instruments	123
Note 14 - Trade & Other Receivables	127
Note 15 - Other Assets	127
Note 16 - Share Capital	127
Note 17 - Non-Cash Share-Based Compensation	129
Note 18 - Dividends	131
Note 19 - Asset Retirement Obligations	131
Note 20 - Leases	133
Note 21 - Borrowings	134
Note 22 - Trade & Other Payables	140
Note 23 - Other Liabilities	140
Note 24 - Fair Value & Financial Instruments	141
Note 25 - Financial Risk Management	142
Note 26 - Commitments & Contingencies	144
Note 27 - Related Party Transactions	144
Note 28 - Subsequent Events	144
Supplemental Natural Gas & Oil Information (Unaudited)	145


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Diversified Energy Company Plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statement of financial position of Diversified Energy Company Plc and its subsidiaries (the "Company")

as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for each

of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial

statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in

Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of

December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in

conformity with International Financial Reporting Standards issued by the International Accounting Standards Board. Also in our opinion, the Company

maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal

Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting,

and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over

Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the

Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and

whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated

financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a

test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk

that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our

audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a

reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal

control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately

and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures

of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material

effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was

communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the

consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit

matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical

audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The Impact of Proved Developed Natural Gas, Oil, and Natural Gas Liquids (NGL) Reserves on Natural Gas and Oil Properties, Net

As described in Notes 3, 4 and 10 to the consolidated financial statements, the Company's natural gas and oil properties, net balance was $2.91 billion

as of December 31, 2024, and the related depletion expense for the year ended December 31, 2024 was $197 million. Natural gas and oil activities are

accounted for using the principles of the successful efforts method of accounting. Costs incurred to purchase, lease, or otherwise acquire a property are

capitalized when incurred. Proved natural gas, oil and NGL reserve volumes are used as the basis to calculate unit-of-production depletion rates. In

estimating proved natural gas, oil and NGL reserves, management relies on interpretations and judgment of available geological, geophysical,

engineering and production data, as well as the use of certain economic assumptions such as commodity pricing. Additional assumptions include

operating expenses, capital expenditures, and taxes. As disclosed by management, the Company's internal staff of petroleum engineers and geoscience

professionals work closely with the independent reserve engineers (together referred to as "management's specialists").

The principal considerations for our determination that performing procedures relating to the impact of proved developed natural gas, oil and NGL

reserves on natural gas and oil properties, net is a critical audit matter are (i) the significant judgment by management, including the use of

management's specialists, when developing the estimates of proved developed natural gas, oil and NGL reserve volumes, and (ii) a high degree of


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence obtained related to data, methods, and assumptions

used by management and its specialists in developing the estimates of proved developed natural gas, oil and NGL reserve volumes.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements. These procedures included testing the effectiveness of controls relating to management’s estimates of proved developed natural

gas, oil and NGL reserves. The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved

natural gas, oil and NGL reserve volumes. As a basis for using this work, the specialists' qualifications were understood and the Company's relationship

with the specialists was assessed. The procedures performed also included evaluating the methods and assumptions used by the specialists, testing the

completeness and accuracy of data used by the specialists, and evaluating the specialists' findings related to estimated future production volumes by

comparing the estimate to relevant historical and current period information, as applicable. Additionally, these procedures included evaluating whether

the assumptions applied to the data related to commodity pricing and operating expenses that were used in developing the estimate of proved

developed natural gas, oil and NGL reserve volumes were reasonable considering the past performance of the Company.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama

March 17, 2025

We have served as the Company’s auditor since 2020.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Consolidated Statement of Comprehensive Income

(Amounts in thousands, except share, per share and per unit data)


		Year Ended
	Notes	December 31, 2024	December 31, 2023	December 31, 2022
Revenue	6	$794,841	$868,263	$1,919,349
Operating expenses	7	(428,902)	(440,562)	(445,893)
Depreciation, depletion and amortization	7	(256,484)	(224,546)	(222,257)
Gross profit		$109,455	$203,155	$1,251,199
General and administrative expenses	7	(129,119)	(119,722)	(170,735)
Allowance for expected credit losses	7	(101)	(8,478)	—
Gain (loss) on natural gas and oil properties and equipment	10,11	25,678	24,146	2,379
Gain (loss) on sale of equity interest	5	(7,375)	18,440	—
Unrealized gain (loss) on investment	5	(4,013)	4,610	—
Gain (loss) on derivative financial instruments	13	(37,551)	1,080,516	(1,758,693)
Gain on bargain purchases	5	—	—	4,447
Impairment of proved properties	10	—	(41,616)	—
Operating profit (loss)		$(43,026)	$1,161,051	$(671,403)
Finance costs	21	(137,643)	(134,166)	(100,799)
Accretion of asset retirement obligation	19	(30,868)	(26,926)	(27,569)
Loss on early retirement of debt	21	(14,753)	—	—
Other income (expense)		2,338	385	269
Income (loss) before taxation		$(223,952)	$1,000,344	$(799,502)
Income tax benefit (expenses)	8	136,951	(240,643)	178,904
Net income (loss)		$(87,001)	$759,701	$(620,598)
Other comprehensive income (loss)		(1,822)	(270)	940
Total comprehensive income (loss)		$(88,823)	$759,431	$(619,658)

Net income (loss) attributable to:
Owners of Diversified Energy Company PLC		$(88,272)	$758,018	$(625,410)
Non-controlling interest		1,271	1,683	4,812
Net income (loss)		$(87,001)	$759,701	$(620,598)

Earnings (loss) per share attributable to Owners of Diversified Energy Company PLC
Weighted average shares outstanding - basic	9	48,031,916	47,165,380	42,203,974
Weighted average shares outstanding - diluted	9	48,031,916	47,514,521	42,203,974
Earnings (loss) per share - basic	9	$(1.84)	$16.07	$(14.82)
Earnings (loss) per share - diluted	9	$(1.84)	$15.95	$(14.82)

The notes on pages 103 to 144 are an integral part of the Group Financial Statements.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Consolidated Statement of Financial Position

(Amounts in thousands, except share, per share and per unit data)


	Notes	December 31, 2024	December 31, 2023
ASSETS
Non-current assets:
Natural gas and oil properties, net	10	$2,905,702	$2,490,375
Property, plant and equipment, net	11	449,540	456,208
Intangible assets	12	15,180	19,351
Restricted cash	3	34,843	25,057
Derivative financial instruments	13	28,439	24,401
Deferred tax assets	8	259,287	144,860
Other non-current assets	15	6,270	9,172
Total non-current assets		3,699,261	3,169,424
Current assets:
Trade receivables, net	14	$234,421	$190,207
Cash and cash equivalents	3	5,990	3,753
Restricted cash	3	11,426	11,195
Derivative financial instruments	13	33,759	87,659
Other current assets	15	18,668	11,784
Total current assets		304,264	304,598
Total assets		$4,003,525	$3,474,022
EQUITY AND LIABILITIES
Shareholders' equity:
Share capital	16	$13,762	$12,897
Share premium	16	1,262,711	1,208,192
Treasury reserve		(119,006)	(102,470)
Share based payment and other reserves		20,170	14,442
Retained earnings (accumulated deficit)		(724,960)	(547,255)
Equity attributable to Owners of Diversified Energy Company PLC:		452,677	585,806
Non-controlling interests	3	11,879	12,604
Total equity		464,556	598,410
Non-current liabilities:
Asset retirement obligations	19	$642,142	$501,246
Leases	20	30,824	20,559
Borrowings	21	1,483,779	1,075,805
Deferred tax liability	8	8,011	13,654
Derivative financial instruments	13	608,869	623,684
Other non-current liabilities	23	5,384	2,224
Total non-current liabilities		2,779,009	2,237,172
Current liabilities:
Trade and other payables	22	$35,013	$53,490
Taxes payable		33,498	50,226
Leases	20	13,776	10,563
Borrowings	21	209,463	200,822
Derivative financial instruments	13	163,676	45,836
Other current liabilities	23	304,534	277,503
Total current liabilities		759,960	638,440
Total liabilities		3,538,969	2,875,612
Total equity and liabilities		$4,003,525	$3,474,022

The notes on pages 103 to 144 are an integral part of the Group Financial Statements.

The Group Financial Statements were approved and authorized for issue by the Board on March 17, 2025 and were signed on its behalf by:

/s/ David E. Johnson

David E. Johnson

Chairman of the Board

March 17, 2025


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Consolidated Statement of Changes in Equity

(Amounts in thousands, except share, per share and per unit data)


	Notes	Share Capital	Share Premium	Treasury Reserve	Share Based Payment and Other Reserves	Retained Earnings (Accumulated Deficit)	Equity Attributable to Owners of Diversified Energy Company PLC	Non- Controlling Interest	Total Equity
Balance as of January 1, 2022		$11,571	$1,052,959	$(68,537)	$14,156	$(362,740)	$647,409	$16,541	$663,950
Net income (loss)		—	—	—	—	(625,410)	(625,410)	4,812	(620,598)
Other comprehensive income (loss)		—	—	—	—	940	940	—	940
Total comprehensive income (loss)		$—	$—	$—	$—	$(624,470)	$(624,470)	$4,812	$(619,658)
Issuance of share capital (settlement of warrants)	16	5	—	—	452	—	457	—	457
Issuance of share capital (equity compensation)		7	—	—	5,682	(3,307)	2,382	—	2,382
Issuance of EBT shares (equity compensation)	16	—	—	2,400	(2,400)	—	—	—	—
Repurchase of shares (EBT)	16	—	—	(22,931)	—	—	(22,931)	—	(22,931)
Repurchase of shares (share buyback program)	16	(80)	—	(11,760)	80	—	(11,760)	—	(11,760)
Dividends	18	—	—	—	—	(143,455)	(143,455)	—	(143,455)
Distributions to non-controlling interest owners		—	—	—	—	—	—	(6,389)	(6,389)
Cancellation of warrants	16	—	—	—	(320)	—	(320)	—	(320)
Transactions with shareholders		$(68)	$—	$(32,291)	$3,494	$(146,762)	$(175,627)	$(6,389)	$(182,016)
Balance as of December 31, 2022		$11,503	$1,052,959	$(100,828)	$17,650	$(1,133,972)	$(152,688)	$14,964	$(137,724)
Net income (loss)		—	—	—	—	758,018	758,018	1,683	759,701
Other comprehensive income (loss)		—	—	—	—	(270)	(270)	—	(270)
Total comprehensive income (loss)		$—	$—	$—	$—	$757,748	$757,748	$1,683	$759,431
Issuance of share capital (equity placement)	16	1,555	155,233	—	—	—	156,788	—	156,788
Issuance of share capital (equity compensation)		—	—	—	6,037	(2,990)	3,047	—	3,047
Issuance of EBT shares (equity compensation)	16	—	—	9,406	(9,406)	—	—	—	—
Repurchase of shares (share buyback program)	16	(161)	—	(11,048)	161	—	(11,048)	—	(11,048)
Dividends	18	—	—	—	—	(168,041)	(168,041)	—	(168,041)
Distributions to non-controlling interest owners		—	—	—	—	—	—	(4,043)	(4,043)
Transactions with shareholders		$1,394	$155,233	$(1,642)	$(3,208)	$(171,031)	$(19,254)	$(4,043)	$(23,297)
Balance as of December 31, 2023		$12,897	$1,208,192	$(102,470)	$14,442	$(547,255)	$585,806	$12,604	$598,410
Net income (loss)		—	—	—	—	(88,272)	(88,272)	1,271	(87,001)
Other comprehensive income (loss)		—	—	—	—	(1,822)	(1,822)	—	(1,822)
Total comprehensive income (loss)		$—	$—	$—	$—	$(90,094)	$(90,094)	$1,271	$(88,823)
Issuance of share capital (acquisition consideration)	16	1,185	54,519	—	—	—	55,704	—	55,704
Issuance of share capital (equity compensation)		—	—	—	10,002	(3,747)	6,255	—	6,255
Issuance of EBT shares (equity compensation)	16	—	—	4,594	(4,594)	—	—	—	—
Repurchase of shares (EBT)	16	—	—	(5,229)	—	—	(5,229)	—	(5,229)
Repurchase of shares (share buyback program)	16	(320)	—	(15,901)	320	—	(15,901)	—	(15,901)
Dividends	18	—	—	—	—	(83,864)	(83,864)	—	(83,864)
Distributions to non-controlling interest owners		—	—	—	—	—	—	(1,996)	(1,996)
Transactions with shareholders		$865	$54,519	$(16,536)	$5,728	$(87,611)	$(43,035)	$(1,996)	$(45,031)
Balance as of December 31, 2024		$13,762	$1,262,711	$(119,006)	$20,170	$(724,960)	$452,677	$11,879	$464,556

The notes on pages 103 to 144 are an integral part of the Group Financial Statements.


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

Consolidated Statement of Cash Flows

(Amounts in thousands, except share, per share and per unit data)


		Year Ended
	Notes	December 31, 2024	December 31, 2023	December 31, 2022
Cash flows from operating activities:
Net income (loss)		$(87,001)	$759,701	$(620,598)
Cash flows from operations reconciliation:
Depreciation, depletion and amortization	7	256,484	224,546	222,257
Accretion of asset retirement obligations	19	30,868	26,926	27,569
Impairment of proved properties	10	—	41,616	—
Income tax (benefit) expense	8	(136,951)	240,643	(178,904)
(Gain) loss on fair value adjustments of unsettled financial instruments	13	189,030	(905,695)	861,457
Asset retirement costs	19	(8,375)	(5,961)	(4,889)
(Gain) loss on natural gas and oil properties and equipment	5,10,11	(25,678)	(24,146)	(2,379)
(Gain) loss on sale of equity interest	5	7,375	(18,440)	—
Unrealized (gain) loss on investment	5	4,013	(4,610)	—
Gain on bargain purchases	5	—	—	(4,447)
Finance costs	21	137,643	134,166	100,799
Loss on early retirement of debt	21	14,753	—	—
Hedge modifications	13	—	26,686	(133,573)
Non-cash equity compensation	17	8,286	6,494	8,051
Working capital adjustments:
Change in trade receivables and other current assets		(27,555)	104,571	13,760
Change in other non-current assets		(923)	1,661	(580)
Change in trade and other payables and other current liabilities		(6,204)	(183,530)	132,349
Change in other non-current liabilities		1,319	(6,236)	(6,794)
Cash generated from operations		$357,084	$418,392	$414,078
Cash paid for income taxes		(11,421)	(8,260)	(26,314)
Net cash provided by operating activities		$345,663	$410,132	$387,764
Cash flows from investing activities:
Consideration for business acquisitions, net of cash acquired	5	$—	$—	$(24,088)
Consideration for asset acquisitions	5	(288,489)	(262,329)	(264,672)
Proceeds from divestitures	5	59,048	95,749	—
Expenditures on natural gas and oil properties and equipment	10,11	(52,100)	(74,252)	(86,079)
Proceeds on disposals of natural gas and oil properties and equipment	10,11	9,675	4,083	12,189
Deferred consideration payments	5	(1,050)	(2,620)	—
Contingent consideration payments	24	—	—	(23,807)
Net cash used in investing activities		$(272,916)	$(239,369)	$(386,457)
Cash flows from financing activities:
Repayment of borrowings	21	$(1,653,489)	$(1,547,912)	$(2,139,686)
Proceeds from borrowings	21	1,844,768	1,537,230	2,587,554
Prepayment charge on early retirement of debt	21	(1,752)	—	—
Cash paid for interest	21	(123,141)	(116,784)	(83,958)
Debt issuance costs	21	(20,267)	(13,776)	(34,234)
Decrease (increase) in restricted cash	3	(3,864)	11,792	(36,287)
Hedge modifications associated with ABS Notes	13, 21	—	(6,376)	(105,316)
Proceeds from equity issuance, net	16	—	156,788	—
Proceeds from lease modifications	20	8,568	—	—
Principal element of lease payments	20	(14,343)	(12,169)	(10,211)
Cancellation (settlement) of warrants, net	16	—	—	137
Dividends to shareholders	18	(83,864)	(168,041)	(143,455)
Distributions to non-controlling interest owners	3	(1,996)	(4,043)	(6,389)
Repurchase of shares by the EBT	16	(5,229)	—	(22,931)
Repurchase of shares	16	(15,901)	(11,048)	(11,760)
Net cash used in financing activities		$(70,510)	$(174,339)	$(6,536)
Net change in cash and cash equivalents		2,237	(3,576)	(5,229)
Cash and cash equivalents, beginning of period		3,753	7,329	12,558
Cash and cash equivalents, end of period		$5,990	$3,753	$7,329

The notes on pages 103 to 144 are an integral part of the Group Financial Statements.


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Notes to the Group Financial Statements

(Amounts in thousands, except share, per share and per unit data)

Note 1 - General Information

(Amounts in thousands, except share, per share and per unit data)

Diversified Energy Company PLC (the “Parent” or “Company”), and its wholly owned subsidiaries (the “Group”) is an independent energy company

engaged in the production, transportation and marketing of primarily natural gas related to its synergistic U.S. onshore upstream and midstream assets.

The Group’s assets are located within the Appalachian Region and Central Region in the U.S.

The Company was incorporated on July 31, 2014 in the United Kingdom and is registered in England and Wales under the Companies Act 2006 as a

public limited company under company number 09156132. The Group‘s registered office is located at 4th floor Phoenix House, 1 Station Hill, Reading,

Berkshire, RG1 1NB, UK.

In May 2020, the Company’s shares were admitted to trading on the LSE’s Main Market for listed securities under the ticker “DEC”. In December 2023,

the Company’s shares were admitted to trading on the New York Stock Exchange (“NYSE”) under the ticker “DEC.” As of December 31, 2024, the

principal trading market for the Company’s ordinary shares was the LSE.

Note 2 - Basis of Preparation

(Amounts in thousands, except share, per share and per unit data)

Basis of Preparation

The Group's consolidated financial statements (the “Group Financial Statements”) have been prepared in accordance with International Financial

Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The principal accounting policies set out below have

been applied consistently throughout the year and are consistent with prior year unless otherwise stated.

Unless otherwise stated, the Group Financial Statements are presented in U.S. Dollars, which is the Group’s subsidiaries’ functional currency and the

currency of the primary economic environment in which the Group operates, and all values are rounded to the nearest thousand dollars except share,

per share and per unit amounts and where otherwise indicated.

Transactions in foreign currencies are translated into U.S. Dollars at the rate of exchange on the date of the transaction. Monetary assets and liabilities

denominated in foreign currencies are translated at the exchange rate at the date of the Consolidated Statement of Financial Position. Where the

Group’s subsidiaries have a different functional currency, their results and financial position are translated into the presentation currency as follows:

•Assets and liabilities in the Consolidated Statement of Financial Position are translated at the closing rate at the date of that Consolidated Statement

of Financial Position;

•Income and expenses in the Consolidated Statement of Comprehensive Income are translated at average exchange rates (unless this is not a

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are

translated at the dates of the transactions); and

•All resulting exchange differences are reflected within other comprehensive income in the Consolidated Statement of Comprehensive Income.

The Group Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities

(including derivative instruments) held at fair value through profit and loss or through other comprehensive income.

Segment Reporting

The Group is an independent owner and operator of producing natural gas and oil wells with properties located in the states of Tennessee, Kentucky,

Virginia, West Virginia, Ohio, Pennsylvania, Oklahoma, Texas and Louisiana. The Group’s strategy is to acquire long-life producing assets, efficiently

operate those assets to generate free cash flow for shareholders and then to retire assets safely and responsibly at the end of their useful life. The

Group’s assets consist of natural gas and oil wells, pipelines and a network of gathering lines and compression facilities which are complementary to the

Group’s assets.

In accordance with IFRS the Group establishes segments on the basis on which those components of the Group are evaluated regularly by the chief

executive officer, the Group’s chief operating decision maker (“CODM”), when deciding how to allocate resources and in assessing performance. When

evaluating performance as well as when acquiring and managing assets the CODM does so in a consolidated and complementary fashion to vertically

integrate and improve margins. Accordingly, when determining operating segments under IFRS 8, the Group has identified one reportable segment that

produces and transports natural gas, NGLs and oil in the U.S.

Going Concern

The Group Financial Statements have been prepared on the going concern basis, assuming the continuation of normal business activities, the realization

of assets, and the settlement of liabilities in the ordinary course of business. After reviewing the Group’s overall position and outlook, the Directors

believe that the Group is adequately funded to continue operating as a going concern for at least the next twelve months from the date of approval of

this Annual Report & Form 20-F.

The Directors diligently oversee and manage the Group’s liquidity risk. While our financial outlook is primarily evaluated through the annual business

planning process, it is also closely monitored on a monthly basis. This involves regular Board discussions, led by senior leadership, to assess the Group’s

current performance and future outlook. The business planning process produces key performance objectives, an assessment of the Group’s primary

risks, the anticipated operational outlook, and a set of financial forecasts that consider the available funding sources (the “Base Plan”).

The Base Plan was formed on key assumptions that support the business planning process. These assumptions include:

•Projected operating cash flows are calculated based on a production profile that aligns with current operating results and observed decline rates;

•Assumes commodity prices align with the current forward curve, taking into account basis differentials;

•Operating cost levels remain consistent with historical trends;


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

•The financial impact of our current hedging contracts for the assessment period, covering approximately 86% and 82% of total production volumes

for the years ending December 31, 2025 and 2026, respectively; and

•The scenario also accounts for the scheduled principal and interest payments on our existing debt arrangements.

The Directors and management also evaluate various scenarios around the Base Plan, focusing on more severe but plausible downside impacts of the

principal risks, both individually and collectively. They also consider the additional capital requirements these downside scenarios might impose. These

scenarios include:

Scenario 1: Cyclically low gas prices for a year, with Henry Hub prices at $2.00 per MMbtu before returning to strip pricing, reflecting historically

observed market conditions.

Scenario 2: Considered the impact of climate change by assuming a two-week period of lost production in our East Texas/Louisiana region, which is

prone to hurricanes, due to a natural disaster (assumed to occur once each year during the assessment period).

Scenario 3: Considered the impact of climate change by assuming a two-week period of lost production in our Appalachian region (assumption of lost

production affecting 25% of the region), which is prone to flooding, due to a natural disaster (assumed to occur once each year during the assessment

period).

Under these downside sensitivity scenarios, the Group continues to meet its working capital requirements, primarily consisting of derivative liabilities.

These liabilities, when settled, will be funded using the higher commodity revenues from which they were derived. Additionally, the Group will continue

to meet the covenant requirements under its Credit Facility and other existing borrowing instruments.

The Directors and management assess the potential impact of these principal risks on the Group’s prospects within the assessment period and evaluate

opportunities to actively mitigate the risk of these severe but plausible downside scenarios. In addition to modeling downside going concern scenarios,

the Board has stress-tested the model to determine the extent of downturn that would result in a breach of covenants. Assuming similar levels of cash

conversion as seen in 2024, a significant decline in production volume and pricing, well beyond historical experiences, would need to persist throughout

the going concern period for a covenant breach to occur, which is considered very unlikely.

In addition to the scenarios mentioned, the Directors also considered the current geopolitical environment and the inflationary pressures affecting the

U.S., which the Group is closely monitoring. Despite modeling specific hypothetical scenarios, the Group believes that the impact of these events will

largely continue to be reflected in commodity markets, extending the recent volatility. The Group views commodity price risk a principal risk and will

continue to actively monitor and mitigate this risk through its hedging program.

Based on this assessment, the Directors have reviewed the Group’s overall position and outlook and believe that the Group is sufficiently funded to

operate as a going concern for the next twelve months from the date of approval of the Group Financial Statements.

Basis of Consolidation

Group companies included in the Group Financial Statements for the year ended December 31, 2024 are Parent and all subsidiary undertakings, which

are those entities controlled by the Parent. Control exists when the Group has the power to direct the activities of an entity so as to affect the return on

investment.

The net assets and results of acquired businesses are included in the Group Financial Statements from their respective dates of acquisition, being the

date on which the Group obtains control.

The results of disposed businesses are included in the consolidated financial statements up to their date of disposal, being the date control ceases.

Intra-Group transactions and balances are eliminated.

The Group Financial Statements for the year ended December 31, 2024 reflect the following corporate structure of the Group, and its wholly owned

subsidiaries:

•Diversified Energy Company PLC (“DEC”) as

well as its wholly owned subsidiaries

•Diversified Gas & Oil Corporation

•Diversified Production LLC

•Diversified ABS Holdings LLC

•Diversified ABS LLC

•Diversified ABS Phase II Holdings LLC

•Diversified ABS Phase II LLC

•Diversified ABS Phase IV Holdings LLC

•Diversified ABS Phase IV LLC

•DP Bluegrass Holdings LLC

•DP Bluegrass LLC

•Chesapeake Granite Wash Trust(a)

•BlueStone Natural Resources II, LLC

•Sooner State Joint ABS Holdings LLC(b)

•Diversified ABS Phase VI Holdings LLC

•Diversified ABS Phase VI LLC

•Diversified ABS VI Upstream LLC

•Oaktree ABS VI Upstream LLC

•DP Lion Equity Holdco LLC(c)

•DP Lion Holdco LLC

•Diversified ABS VIII Holdings LLC

•Diversified ABS VIII LLC

•Diversified ABS III Upstream LLC

•Diversified ABS V Upstream LLC

•DP Yellowjacket Equity Holdco LLC

•DP Yellowjacket Holdco LLC

•DM Yellowjacket Holdco LLC

•Tanos TX Holdco LLC

•Diversified ABS IX Holdings LLC

•Diversified Mustang Holdco LLC

•DP RBL Co LLC

•DP Legacy Central LLC

•Diversified Energy Marketing, LLC

•OCM Denali Holdings, LLC

•DP Tapstone Energy Holdings, LLC

•DP Legacy Tapstone LLC

•Giant Land, LLC(d)

•Link Land, LLC(d)

•Old Faithful Land, LLC(d)

•Riverside Land, LLC(d)

•Splendid Land, LLC(d)

•Diversified Midstream LLC

•Cranberry Pipeline Corporation

•Coalfield Pipeline Company

•DM Bluebonnet LLC

•Black Bear Midstream Holdings LLC

•Black Bear Midstream LLC

•Black Bear Liquids LLC

•Black Bear Liquids Marketing LLC

•DM Pennsylvania Holdco LLC

•Diversified Energy Group LLC

•Diversified Energy Company LLC

•Next LVL Energy, LLC

•Diversified ABS IX Holdings LLC

•Diversified ABS X Holdings LLC

•Diversified ABS X LLC

(a)Diversified Production, LLC holds 50.8% of the issued and outstanding common shares of Chesapeake Granite Wash Trust.

(b)Owned 51.25% by Diversified Production LLC and 48.75% by OCM Denali Holdings LLC, both wholly owned subsidiaries of the Group.

(c)Diversified Production, LLC holds 20% of the issued and outstanding equity of DP Lion Equity Holdco LLC. This entity is not consolidated within the Group’s financial

statements as of December 31, 2024. Refer to Note 5 for additional information.

(d)Owned approximately 55% by Diversified Energy Company PLC.


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Note 3 - Material Accounting Policies

(Amounts in thousands, except share, per share and per unit data)

The preparation of the Group Financial Statements in compliance with IFRS as issued by the IASB requires management to make estimates and exercise

judgment in applying the Group’s accounting policies. In preparing the Group Financial Statements, the significant judgments made by management in

applying the Group’s accounting policies and the key sources of estimation uncertainty are disclosed in Note 4.

Business Combinations and Asset Acquisitions

The Group performs an assessment of each acquisition to determine whether the acquisition should be accounted for as an asset acquisition or a

business combination. For each transaction, the Group may elect to apply the concentration test to determine if the fair value of assets acquired is

substantially concentrated in a single asset (or a group of similar assets). If this concentration test is met, the acquisition qualifies as an acquisition of a

group of assets and liabilities, not of a business.

Accounting for business combinations under IFRS 3 is applied once it is determined that a business has been acquired. Under IFRS 3, a business is

defined as an integrated set of activities and assets conducted and managed for the purpose of providing a return to investors. A business generally

consists of inputs, processes applied to those inputs, and resulting outputs that are, or will be, used to generate revenues.

In a business combination, assets acquired and liabilities assumed are recorded at fair value and any excess in the consideration paid over the fair value

of the net assets acquired is recorded as goodwill, while any excess fair value of the net assets acquired over the consideration fair value is recognized

as a gain on bargain purchase.

When less than the entire interest of an entity is acquired, the choice of measurement of the non-controlling interest, either at fair value or at the

proportionate share of the acquiree’s identifiable net assets, is determined on a transaction by transaction basis.

More information regarding the judgments and conclusions reached with respect to business combinations and asset acquisitions is included in Notes 4

and 5.

Oaktree Capital Management, L.P. (“Oaktree”) Participation Agreement

In October 2020, the Group entered into a three-year definitive participation agreement with funds managed by Oaktree to jointly identify and fund

future proved developed producing acquisition opportunities (“PDP acquisitions”) that the Group identified. The Oaktree Funding Commitment provided

for up to $1,000,000 in aggregate over three years for mutually agreed upon PDP acquisitions with transaction valuations typically greater than

$250,000. The Group and Oaktree each funded 50% of the net purchase price in exchange for proportionate working interests of 51.25% and 48.75%

during Tranche I deals, or joint acquisitions made during the first 18 months of the agreement, and 52.5% and 47.5% during Tranche II deals, or joint

acquisitions made during the second 18 months of the agreement, respectively. The Group's greater share reflected the upfront promote it received

from Oaktree which was intended to compensate the Group for the increase in general and administrative expenses needed to operate an entity that

increases with acquired growth.

Additionally, upon Oaktree achieving a 10% unlevered internal rate of return, Oaktree would convey a back-end promote to the Group which would

increase the Group’s working interest to 59.625% for both Tranche I and Tranche II deals. The Group also maintained the right of first offer to acquire

Oaktree’s interest if and when Oaktree decided to divest. The Group and Oaktree each had the right to participate in a sale by the other party with a

third-party upon comparable terms.

The Group accounted for the Oaktree Participation Agreement as a joint operation under IFRS 11, Joint Arrangements (“IFRS 11”). Accordingly, the

Group included its proportionate share of assets, liabilities, revenues and expenses within the consolidated financial statements.

The Oaktree Participation Agreement ended in October 2023. On June 6, 2024 the Group acquired Oaktree’s proportionate working interest in all

Tranche I and Tranche II deals. Details of the acquisition are disclosed in Note 5.

Inventory

Natural gas inventory is stated at the lower of cost and net realizable value, cost being determined on a weighted average cost basis. Inventory also

consists of material and supplies used in connection with the Group’s maintenance, storage and handling. Inventory is stated at the lower of cost or net

realizable value.

Cash and Cash Equivalents

Cash on the balance sheet comprises cash at banks. Balances held at banks, at times, exceed U.S. federally insured amounts. The Group has not experienced

any losses in such accounts and the Directors believe the Group is not exposed to any significant credit risk on its cash.

Trade Receivables

Trade receivables are recorded at their historical carrying amount, net of any required provisions. These receivables are due from customers across the

natural gas and oil industry. While they are spread among several customers, their collectability depends on each customer’s financial health and the

overall economic conditions of the industry. Management evaluates customers’ financial conditions before extending credit and typically do not require

collateral to secure the recoverability of the Group’s trade receivables. Any adjustments to the Group’s allowance for expected credit losses during the

year are recognized in the Consolidated Statement of Comprehensive Income. Trade receivables also include amounts due from third-party working

interest owners and hedge settlement receivables. The Group consistently assesses the collectability of these receivables. As of December 31, 2024 and

2023, the Group considered a portion of these working interest receivables uncollectable and recorded an allowance for credit losses in the amount of

$15,959 and $16,529, respectively. Refer to Note 14 for additional information.

Impairment of Financial Assets

IFRS 9 requires the application of an expected credit loss model in considering the impairment of financial assets. The expected credit loss model

requires the Group to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit

risk since initial recognition of the financial assets. The credit event does not have to occur before credit losses are recognized. IFRS 9 allows for a

simplified approach for measuring the allowance at an amount equal to lifetime expected credit losses for trade receivables.

The Group applies the simplified approach to the expected credit loss model to trade receivables arising from:

•Sales of natural gas, NGLs and oil;


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•Sales of gathering and transportation of third-party natural gas; and

•The provision of other services.

Borrowings

Borrowings are initially recognized at fair value, net of any transaction costs incurred. They are then carried at amortized cost. The difference between

the net proceeds and the redemption value is recognized in the Consolidated Statement of Comprehensive Income over the period of the borrowings

using the effective interest method.

Interest on borrowings is accrued according to each class of borrowing.

Derivative Financial Instruments

Derivatives are utilized as part of the Group’s strategy to mitigate risks associated with the cash flow unpredictability due to commodity price volatility.

Additional details on the Group’s exposure to these risks can be found in Note 25. The Group has entered into financial instruments which are

considered derivative contracts, such as swaps and collars, which result in net cash settlements each month without physical deliveries. The derivative

contracts are initially recognized at fair value on the contract date and remeasured to fair value at each balance sheet date. The resulting gain or loss is

recognized in the Consolidated Statement of Comprehensive Income under the gain (loss) on derivative financial instruments line item for the year

incurred.

Restricted Cash

Cash held on deposit for bonding purposes is classified as restricted cash and recorded within current and non-current assets. This cash is either (1)

restricted by state governmental agencies for use if the operator abandons any wells, or (2) held as collateral by the Group’s surety bond providers.

Additionally, the Group is required to maintain certain cash reserves for interest payments related to its asset-backed securitizations, as detailed in Note

21. These reserves typically cover one to six months of interest and any associated fees. The Group classifies restricted cash as either current or non-

current, depending on the classification of the related asset or liability. This reserve cash is managed by an independent indenture trustee, who

monitors the reserves monthly to ensure the correct amount is maintained. The deposit conditions restrict the Group from accessing the reserve cash on

demand, meaning it no longer qualifies as cash and cash equivalents.


	December 31, 2024	December 31, 2023
Cash restricted by asset-backed securitizations	$45,880	$35,870
Other restricted cash	389	382
Total restricted cash	$46,269	$36,252
Classified as:
Current asset	$11,426	$11,195
Non-current asset	34,843	25,057
Total	$46,269	$36,252

Natural Gas and Oil Properties

Natural gas and oil activities are accounted for using the principles of the successful efforts method of accounting as described below.

Development & Acquisition Costs

Costs incurred to purchase, lease, or otherwise acquire a property are capitalized when incurred. Expenditures related to the construction, installation or

completion of infrastructure facilities, such as platforms, and the drilling of development wells, including delineation wells, are capitalized within natural

gas and oil properties. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset

into operation, and the initial estimate of the asset retirement obligation.

Depletion

Proved natural gas, oil and NGL reserve volumes are used as the basis to calculate unit-of-production depletion rates. Leasehold costs are depleted on

the unit-of-production basis over the total proved reserves of the relevant area while production and development wells are depleted over proved

producing reserves.

Intangible Assets

Software Development

Development costs that are directly attributable to the design and testing of identifiable and unique software products developed by third parties and

controlled by the Group are recognized as intangible assets where the following criteria are met:

•It is technically feasible to complete the software so that it will be available for use;

•The Directors intend to complete the software and use it;

•There is an ability to use the software;

•It can be demonstrated how the software will generate probable future economic benefits;

•Adequate technical, financial and other resources to complete the development and to use the software are available; and

•The expenditure attributable to the software during its development can be reliably measured.

Directly attributable costs that are capitalized as part of the software include cost incurred by third parties, employee costs and an appropriate portion of

relevant overheads. Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use.

Costs associated with maintaining software programs are recognized as an expense as incurred.


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Impairment of Intangible Assets

Intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An

impairment loss is recognized when the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value

less costs of disposal and its value in use. For impairment assessment purposes, assets are grouped at the lowest levels for which there are separately identifiable

cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Intangible assets that have suffered

an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

Amortization

The Group amortizes intangible assets with a limited useful life, using the straight-line method over the following periods:


	Range in Years
Software	3
Other acquired intangibles(a)	3

(a)Represents intangible assets acquired in business combinations and asset acquisitions.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. The initial recognized cost includes the purchase price

and any costs directly attributable to bringing the asset to the location and condition necessary for it to operate as intended by the Directors.

Property, plant and equipment are generally depreciated on a straight-line basis over their estimated useful lives:


	Range in Years
Buildings and leasehold improvements	40
Equipment	5 - 10
Motor vehicles	5
Midstream assets	10 - 15
Other property and equipment	5 - 10

Property, plant and equipment held under leases are depreciated over the shorter of the lease term or estimated useful life.

Impairment of Non-Financial Assets

At each reporting date, the Group assesses whether there are indications that an asset may be impaired. If such indications exist, or if annual

impairment testing is required, the Group estimates the asset’s recoverable amount. The recoverable amount is the higher of an asset’s or cash

generating unit’s fair value less disposal costs and its value-in-use. This is determined for an individual asset unless the asset does not generate largely

independent cash inflows from other assets or groups of assets. If the carrying amount of an asset or cash-generating unit exceeds its recoverable

amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value-in-use, the Group discounts the estimated

future cash flows to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific

to the asset. When determining fair value less disposal costs, the Group considers recent market transactions, if available. If no such transactions are

identified, an appropriate valuation model is used.

Non-Controlling Interests

Non-controlling interests represent the equity in subsidiaries that is not attributable to the Group’s shareholders. The acquisition of a non-controlling

interest in a subsidiary and the sale of an interest while retaining control are accounted for as transactions within equity and are reported within non-

controlling interests in the consolidated financial statements.

During the years ended December 31, 2024, 2023 and 2022, the Group recorded net income of $1,271, $1,683 and $4,812, respectively, attributable to

non-controlling interests. As of December 31, 2024 and 2023, the Group had a non-controlling interests balance of $11,879 and $12,604, respectively.

During the years ended December 31, 2024, 2023 and 2022, the Group paid $1,996, $4,043 and $6,389, respectively, in distributions to non-controlling

interest owners.

Leases

The Group recognizes a right-of-use asset and a lease liability at the commencement date of contracts (or separate components of a contract) that

convey the right to control the use of an identified asset for a period of time in exchange for consideration, when such contracts meet the definition of a

lease as determined by IFRS 16, Leases (“IFRS 16”). The determination of whether an arrangement is, or contains, a lease is based on the substance of

the arrangement at inception date.

The Group initially measures the lease liability at the present value of the future lease payments, discounted using the interest rate implicit in the lease.

If this rate cannot be readily determined, the Group uses its incremental borrowing rate. After the commencement date, the lease liability is reduced by

payments made and increased by interest on the lease liability.

Right-of-use assets are initially measured at cost, which comprises:

•The amount of the initial measurement of the lease liability;

•Any lease payments made at or before the commencement date, less any lease incentives received;

•Any initial direct costs incurred by the lessee; and

•An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located, or

restoring the underlying asset to the condition required by the lease terms, unless those costs are incurred to produce inventories.


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Subsequent to the measurement date, the right-of-use asset is depreciated on a straight line basis over the period that reflects the life of the underlying

asset and is also adjusted for the remeasurement of any lease liability.

Asset Retirement Obligations

When a liability exists for the retirement of a well, removal of production equipment, and site restoration at the end of a well’s productive life, the Group

recognizes an asset retirement liability. The amount recognized is the present value of estimated future net expenditures, determined in accordance

with our anticipated retirement plans and local conditions and requirements. The unwinding of the discount on the decommissioning liability is included

as accretion of the decommissioning provision. The cost of the relevant property, plant and equipment asset is increased by an amount equivalent to the

liability and depreciated on a unit of production basis. The Group recognizes changes in estimates prospectively, with corresponding adjustments to the

liability and the associated non-current asset.

Taxation

Deferred Taxation

Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their carrying amounts in the

Group Financial Statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance

sheet date and are expected to apply when the related deferred tax asset is realized or the deferred liability is settled.

Deferred tax assets are recognized to the extent that it is probable that the future taxable profit will be available against which the temporary

differences can be utilized. The Group offsets deferred tax assets and liabilities when it has a legally enforceable right to set off current tax assets

against current tax liabilities, provided that the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority.

Current Taxation

Current income tax assets and liabilities for the years ended December 31, 2024 and 2023 were measured at the amounts to be recovered from, or paid

to, the taxation authorities. The tax rates (and laws) used to compute these amounts are those enacted or substantively enacted at the reporting date in

the jurisdictions where the Group operates and generates taxable income.

Uncertain Tax Positions

Management periodically evaluates positions taken in tax returns where applicable tax regulation is subject to interpretation and considers whether it is

probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances based on either the most likely amount

or the expected value, depending on which method better predicts the resolution of the uncertainty.

Revenue Recognition

Natural Gas, NGLs & Oil Revenue (“Commodity Revenue”)

Commodity revenue is derived from sales of natural gas, NGLs and oil products and is recognized when the customer obtains control of the commodity.

This transfer generally occurs when the product is physically transferred into a vessel, pipe, sales meter, or other delivery mechanism. This also

represents the point at which the Group fulfills its single performance obligation to its customer under contracts for the sale of natural gas, NGLs and oil

as per IFRS 15, Revenue from Contracts with Customers (“IFRS 15”).

Commodity revenue in which the Group has an interest with other producers is recognized proportionately based on the Group’s working interest and

the terms of the relevant production sharing contracts. Royalty payments or counterparty distributions, representing the portion of revenue due to

minority working interests, are recorded as a liability, described in Note 23.

Commodity revenue is recorded based on the volumes accepted each day by customers at the delivery point and is measured using the respective

market price index for the applicable commodity, adjusted by the applicable basis differential based on the quality of the product.

Third-Party Gathering Revenue

Revenue from gathering and transporting third-party natural gas is recognized when the customer transfers its natural gas to the entry point in the

Group’s midstream network and becomes entitled to withdraw an equivalent volume of natural gas from the exit point in the Group’s midstream

network. This transfer generally occurs when product is physically transferred into the Group’s vessel, pipe, or sales meter. The customer’s entitlement

to withdraw an equivalent volume of natural gas is broadly coterminous with the transfer of natural gas into the Group’s midstream network. Customers

are invoiced, and revenue is recognized each month based on the volume of natural gas transported at a contractually agreed-upon price per unit.

Third-Party Plugging Revenue

Revenue from third-party asset retirement services is recognized as earned in the month the work is performed, in accordance with the Group’s

contractual obligations. These contractual obligations are considered the Group’s performance obligations for purposes of IFRS 15.

Other Revenue

Revenue from the operation of third-party wells is recognized as earned in the month the work is performed, in accordance with the Group’s contractual

obligations. These contractual obligations are considered the Group’s performance obligations for purposes of IFRS 15.

Revenue from the sale of water disposal services to third parties into the Group’s disposal wells is recognized as earned in the month the water is

physically disposed of at a contractually agreed-upon price per unit. The disposal of the water is considered the Group’s performance obligation under

these contracts.

Revenue is stated after deducting sales taxes, excise duties, and similar levies.

Share-Based Payments

The Group accounts for share-based payments under IFRS 2, Share-Based Payment (“IFRS 2”). All of the Group’s share-based awards are equity

settled, with their fair value determined at the grant date. As of December 31, 2024, 2023 and 2022, the Group had three types of share-based

payment awards: RSUs, PSUs and Options. The fair value of the Group’s RSUs is measured using the stock price at the grant date. The fair value of the

Group’s PSUs is measured using a Monte Carlo simulation model. The inputs to the Monte Carlo simulation model included:

•The share price at the date of grant;

•Expected volatility;

•Expected dividends;

•Risk free rate of interest; and


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Table of Contents	Diversified Energy Company PLC 2024 Annual Report & Form 20-F	Group Financial Statements

•Patterns of exercise by the plan participants.

The fair value of the Group’s Options was calculated using the Black-Scholes model as of the grant date. The inputs to the Black-Scholes model

included:

•The share price at the grant date;

•Exercise price;

•Expected volatility; and

•Risk-free rate of interest.

The grant date fair value of share-based awards, adjusted for market-based performance conditions, is expensed uniformly over the vesting period.

New or Amended Accounting Standards - Adopted

The following accounting standards, amendments and interpretations became effective in the current year:


Standard	Amendment	Effective Date
IAS 1	Classification of Liabilities as Current or Non-Current and Non-Current Liabilities with Covenants	Annual periods beginning on or after January 1, 2024

The application of this standard and interpretations effective for the first time in the current year has had no significant impact on the amounts reported

in the Group Financial Statements.

New or Amended Accounting Standards - Not Yet Adopted

At the date of authorization of the Group Financial Statements, the following standards and interpretations, which have not been applied in the Group

Financial Statements, were in issue but not yet effective. It is expected that where applicable, these standards and amendments will be adopted on each

respective effective date. The Group is still assessing the effect of these standards, though they are not expected to have a material impact.


Standard	Amendment	Effective Date
IAS 21	The Effects of Changes in Foreign Exchange Rates - Lack of Exchangeability	Annual periods beginning on or after January 1, 2025
IFRS 9	Financial Instruments - Lessee Derecognition of Lease Liabilities	Annual periods beginning on or after January 1, 2026
IFRS 7 & IFRS 9	Financial Instruments and Disclosures - Amendments to the Classification and Measurement of Financial Instruments	Annual periods beginning on or after January 1, 2026
IAS 7	Statement of Cash Flows - Cost Method	Annual periods beginning on or after January 1, 2026
IFRS 18	Presentation and Disclosures in Financial Statements - Primary Financial Statements	Annual periods beginning on or after January 1, 2027
IFRS 19	Subsidiaries without Public Accountability: Disclosures - Disclosure Initiative - Subsidiaries without Public Accountability: Disclosures	Annual periods beginning on or after January 1, 2027

Note 4 - Significant Accounting Judgments & Estimates

(Amounts in thousands, except share, per share and per unit data)

In applying the Group's accounting policies described in Note 3, the Directors made the following judgments and estimates, which may significantly

affect the amounts recognized in the Group Financial Statements.

Significant Judgments

Business Combinations & Asset Acquisitions

The Group follows the guidance in IFRS 3, Business Combinations (“IFRS 3”) for determining the appropriate accounting treatment for acquisitions. IFRS

3 permits an initial fair value assessment to determine if substantially all of the fair value of the assets acquired is concentrated in a single asset or

group of similar assets, known as the “concentration test”. If the initial screening test is not met, the asset may be considered a business based on

whether there are inputs and substantive processes in place. The accounting treatment is derived based on the results of this analysis and the

conclusion on an acquisition’s classification as a business combination or an asset acquisition.

If the acquisition is deemed to be a business, the acquisition method of accounting is applied. Identifiable assets acquired and liabilities assumed at the

acquisition date are recorded at fair value. When the fair value exceeds the consideration transferred, a bargain purchase gain is recognized.

Conversely, when the consideration transferred exceeds the fair value, goodwill is recorded. If the transaction is deemed to be an asset purchase, the

cost accumulation and allocation model is used whereby the assets and liabilities are recorded based on the purchase price and allocated to the

individual assets and liabilities based on relative fair values. As a result, gains on bargain purchases are not recognized on asset acquisitions.

Additionally, in instances when the acquisition of a group of assets contains contingent consideration, the Group records changes in the fair value of the

contingent consideration through the basis of the asset acquired rather than through the Consolidated Statement of Comprehensive Income. More

information regarding conclusions reached with respect to this judgment is included in Note 5.

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed in a business combination are based on various

market participant assumptions and valuation methodologies, requiring considerable judgment by management. The most significant variables in these

valuations are discount rates and other assumptions and estimates used to determine the cash inflows and outflows. Management determines discount

rates based on the risk inherent in the acquired assets, specific risks, industry beta, and the capital structure of guideline companies. The valuation of an

acquired business is based on available information at the acquisition date and assumptions that are believed to be reasonable. However, a change in

facts and circumstances as of the acquisition date can result in subsequent adjustments during the measurement period, but no later than one year

from the acquisition date.


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Significant Estimates

Estimating the Fair Value of Acquired Natural Gas & Oil Properties

The Group determines the fair value of its natural gas and oil properties acquired through business combinations using the income approach. This

approach is based on expected discounted future cash flows, which are derived from estimated reserve quantities, production and development costs,

and forward prices for natural gas and oil. Future net cash flows are discounted using a weighted average cost of capital and additional risk factors.

Proved reserves are estimated using available geological and engineering data and include only those volumes for which market access is reasonably

certain. These estimates are inherently imprecise, requiring judgment and regular revisions. Revisions may be based on new information from additional

drilling, long-term reservoir performance observations, and changes in economic factors such as product prices, contract terms, or operating expenses.

Impairment of Natural Gas & Oil Properties

When preparing the Group Financial Statements, the Group considers whether there is any evidence of impairment in the natural gas and oil properties.

This assessment involves reviewing producing assets for impairment indicators at the balance sheet date. Indicators can include significant or prolonged

decreases in commodity pricing, negative market changes, downward revisions of reserve estimates, or increases in operating costs.

The Group reviews the carrying value of its natural gas and oil properties on a field basis annually or when an indicator of impairment is identified. The

impairment test compares the carrying value of these properties to their recoverable amount, which is based on the present value of estimated future

net cash flows from proved reserves. These future cash flows are calculated using estimated reserve quantities, production and development costs, and

forward prices for natural gas and oil. If the carrying value exceeds fair value, the Group recognizes an impairment by writing down the value of the

properties to their fair value. For the year ended December 31, 2024, no such impairments were recorded.

For the year ended December 31, 2023, the Group determined that the carrying amounts of certain proved properties for two fields were not

recoverable from future cash flows and recognized an impairment charge of $41,616. No such impairment was recorded during the year ended

December 31, 2022. Refer to Note 10 for additional information regarding the Group’s impairment assessment.

If there has been an impairment charge in a previous period, it will be reversed in a later period if circumstances change and the recoverable amount

exceeds the net book value at the time. When reversing impairment losses, the asset’s carrying amount will be increased to the lower of its original

carrying value or the carrying value that would have been determined (net of depletion) if no impairment loss had been recognized in prior years. No

such recoveries were recorded during the years ended December 31, 2024, 2023, and 2022. For more details, refer to Note 10.

When applicable, the Group recognizes impairment losses in the Consolidated Statement of Comprehensive Income, categorizing them according to the

function of the impaired asset.

Reserve Volume Estimates

Proved reserves are the estimated volumes of natural gas, oil and NGLs that can be economically produced with reasonable certainty from known

reservoirs, given current economic conditions and operating methods.

To estimate these reserves, we depend on the interpretation and judgment of engineering and production data, along with certain economic data such

as commodity prices, operating expenses, capital expenditures, and taxes. Since many factors, assumptions, and variables involved in estimating proved

reserves can change over time, the estimates of natural gas, oil and NGL reserve volumes are subject to revision.

Taxation

The Group makes certain estimates when calculating deferred tax assets and liabilities, as well as income tax expense. These estimates often require

judgment regarding the timing and recognition of differences of revenue and expenses for tax and financial reporting purposes, as well as the tax basis

of our assets and liabilities at the balance sheet date before tax returns are completed. Additionally, the Group must evaluate the likelihood of

recovering or utilizing its deferred tax assets and may record a valuation allowance against these assets when it is not expected that they will be

realized. In determining whether to apply a valuation allowance, the Group considers evidence such as future taxable income, among other factors. This

process involves numerous judgments and assumptions, including estimates of commodity prices, production, and other operating conditions. If any of

these factors, assumptions, or judgments change, the deferred tax asset could be adjusted, particularly decreasing if it is determined that the asset is

unlikely to be realized. Conversely, a valuation allowance may be reversed if it is determined that the asset is likely to be realized.

Asset Retirement Obligations

The costs associated with asset retirement obligations are inherently uncertain and can fluctuate due to various factors, such as changes in legal

requirements, the development of new restoration techniques, or experiences at other production sites. The expected timing and amount of these

expenditures can also vary, for instance, due to changes in reserves or modifications in laws and regulations or their interpretation. Consequently,

significant estimates and assumptions are necessary to determine the provision for asset retirement. These assumptions include the costs to retire the

wells, the Group’s retirement plan, an assumed inflation rate, and the discount rate. Changes in these assumptions could lead to a substantial change in

the carrying value of the asset retirement obligations within the next financial year. For more details and sensitivity analysis, refer to Note 19.

Note 5 - Acquisitions & Divestitures

(Amounts in thousands, except share, per share and per unit data)

The assets acquired in all acquisitions include the necessary permits, rights to production, royalties, assignments, contracts and agreements that support

the production from wells and operation of pipelines. The Group determines the accounting treatment of acquisitions using IFRS 3.

2024 Acquisitions

East Texas II Asset Acquisition

On October 29, 2024, the Group acquired certain developed producing assets in the East Texas area of the Central Region from a regional operator (the

“Seller”) (altogether, the “East Texas II transaction”). The Group assessed the acquired assets and determined that this transaction was considered an

asset acquisition rather than a business combination. When making this determination, management evaluated IFRS 3 and concluded that the acquired

assets did not meet the definition of a business. The Group paid purchase consideration of $67,782, inclusive of transaction costs of $744 and

customary purchase price adjustments. The transaction was funded through a combination of cash consideration of $40,329, drawing from a senior

secured bank facility supported by the acquired assets and existing liquidity, and the issuance of 2,342,445 new ordinary shares direct to the Seller.

Refer to Notes 16 and 21 for additional information regarding share capital and debt, respectively. In the period from its acquisition to December 31,

2024 the East Texas II assets increased the Group’s revenue and operating expense by $4,889 and $1,598, respectively.


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The assets acquired and liabilities assumed were as follows:


Consideration paid
Cash consideration	$40,329
Value of shares issued as consideration	27,453
Total consideration	$67,782
Net assets acquired
Natural gas and oil properties	$78,087
Asset retirement obligations, asset portion	11,902
Property, plant and equipment	1,045
Asset retirement obligations, liability portion	(11,902)
Other current liabilities	(11,350)
Net assets acquired	$67,782

Crescent Pass Energy (“Crescent Pass”) Asset Acquisition

On August 15, 2024, the Group acquired certain upstream assets and related infrastructure in the East Texas area of the Central Region from Crescent

Pass. The Group assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business

combination. When making this determination, management evaluated IFRS 3 and concluded that the acquired assets did not meet the definition of a

business. The Group paid purchase consideration of $97,678, inclusive of transaction costs of $846 and customary purchase price adjustments. The

transaction was funded through a combination of the issuance of 2,249,650 new ordinary shares direct to Crescent Pass and cash consideration of

$69,265 from the new Term Loan II supported by the acquired assets. Refer to Notes 16 and 21 for additional information regarding share capital and

debt, respectively. In the period from its acquisition to December 31, 2024 the Crescent Pass assets increased the Group’s revenue and operating

expense by $10,283 and $6,101, respectively.

The assets acquired and liabilities assumed were as follows:


Consideration paid
Cash consideration	$69,265
Value of shares issued as consideration	28,413
Total consideration	$97,678
Net assets acquired
Natural gas and oil properties	$105,737
Asset retirement obligations, asset portion	34,247
Property, plant and equipment	534
Trade receivables, net	1,926
Asset retirement obligations, liability portion	(34,247)
Other current liabilities	(10,519)
Net assets acquired	$97,678

Oaktree Capital Management, L.P. (“Oaktree”) Working Interest Asset Acquisition

On June 6, 2024 the Group acquired Oaktree’s proportionate working interest in the East Texas, Tapstone, Tanos and Indigo acquisitions. The Group

assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business combination. When

making this determination, management evaluated IFRS 3 and concluded that the acquired assets did not meet the definition of a business. The Group

paid purchase consideration of $221,660, inclusive of transaction costs of $2,064 and customary purchase price adjustments. As part of this transaction,

the Group assumed Oaktree’s proportionate debt of $132,576 associated with the ABS VI Notes. The Group funded the purchase through a combination

of existing and expanded liquidity and issued approximately $83,348 in notes payable to Oaktree. Refer to Note 21 for additional information regarding

debt. In the period from its acquisition to December 31, 2024 the Oaktree assets increased the Group’s revenue and operating expense by $65,708 and

$31,626, respectively.


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The assets acquired and liabilities assumed were as follows:


Consideration paid
Cash consideration	$177,550
Oaktree Seller's Note	83,348
Elimination of Oaktree liability	(39,238)
Total consideration	$221,660
Net assets acquired
Natural gas and oil properties	$315,611
Asset retirement obligations, asset portion	63,770
Property, plant and equipment	457
Restricted cash	6,153
Derivative financial instruments, net	39,841
Asset retirement obligations, liability portion	(63,770)
Borrowings	(132,576)
Other current liabilities	(7,826)
Net assets acquired	$221,660

Other Acquisitions

On December 30, 2024 the Group acquired certain upstream assets in the Central Region that are contiguous to its existing East Texas assets. The

Group paid purchase consideration of $1,181, inclusive of customary purchase price adjustments and transaction costs. Given the concentration of

assets, this transaction was considered an asset acquisition rather than a business combination.

2024 Divestitures

During the year ended December 31, 2024, the Group divested certain other non-core undeveloped acreage across its operating footprint for

consideration of approximately $59,048. The consideration received exceeded the carrying value of the net assets divested resulting in a gain on natural

gas and oil properties and equipment of $26,312.

2023 Acquisitions

Tanos Energy Holdings II LLC (“Tanos II”) Asset Acquisition

On March 1, 2023 the Group acquired certain upstream assets and related infrastructure in the Central Region from Tanos II. Given the concentration of

assets, this transaction was considered an asset acquisition rather than a business combination. When making this determination management

performed an asset concentration test considering the fair value of the acquired assets. The Group paid purchase consideration of $262,329, inclusive of

transaction costs of $936 and customary purchase price adjustments. The Group funded the purchase with proceeds from the February 2023 equity

raise, cash on hand and existing availability on the Credit Facility for which the borrowing base was upsized concurrent to the closing of the Tanos II

transaction. Refer to Notes 16 and 21 for additional information regarding the Group’s share capital and borrowings. In the period from its acquisition to

December 31, 2023 the Tanos II assets increased the Group’s revenue by $45,589.

2023 Divestitures

Sale of Equity Interest in DP Lion Equity HoldCo LLC

In November 2023, the Group formed DP Lion Equity Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue Class A and

Class B asset-backed securities (collectively “ABS VII”) which are secured by certain upstream producing assets in Appalachia. The Class A and B asset

backed securities were issued in aggregate principal amounts of $142,000 and $20,000, respectively.

In December 2023, the Group divested 80% of the equity ownership in DP Lion Equity Holdco LLC to outside investors, generating cash proceeds of

$30,000. The Group evaluated the remaining 20% interest in DP Lion Equity Holdco LLC and determined that the governance structure is such that the

Group does not have the ability to exercise control, joint control, or significant influence over the DP Lion Equity Holdco LLC entity. Accordingly, this

entity is not consolidated within the Group’s financial statements as of December 31, 2023.

The consideration exceeded the fair value of the Group’s portion of the assets and liabilities divested resulting in a gain on sale of the equity interest of

$18,440. The Group’s remaining investment in the LLC is accounted for as an equity instrument at fair value in accordance with IFRS 9, Financial

Instruments (“IFRS 9”) and was $7,500 at December 31, 2023, which generated an unrealized gain of $4,610.

During 2024, the Group identified that the liability for revenues to be distributed of $7,375 associated with the divested wells in the DP Lion Holdco LLC

transaction was inappropriately relieved and should have remained consolidated within the Group Financial Statements. The Group assessed the error

and determined that it is immaterial, quantitatively and qualitatively, to the 2023 and 2024 Group Financial Statements. Accordingly, the error has been

corrected as an out of period adjustment in the current year within the “Gain (loss) on sale of equity interest” line item in the Group’s Statement of

Comprehensive Income.

Other 2023 Divestitures

On July 17, 2023, the Group sold undeveloped acreage in Oklahoma, within the Group’s Central Region, for net consideration of approximately $16,060.

The consideration received exceeded the fair value of the net assets divested resulting in a gain on natural gas and oil properties and equipment of

$13,619.

On June 27, 2023, the Group sold certain non-core, non-operated assets within its Central Region for gross consideration of approximately $37,589. The

divested assets were located in Texas and Oklahoma and consisted of non-operated wells and the associated leasehold acreage that was acquired as


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part of the ConocoPhillips Asset Acquisition in September 2022. This sale of non-operated and non-core assets aligns with the Group’s application of the

Smarter Asset Management strategy and its strategic focus on operated proved developed producing assets.

Additionally, during the year ended December 31, 2023, the Group divested certain other non-core undeveloped acreage across its operating footprint

for consideration of approximately $12,100. The consideration received exceeded the fair value of the net assets divested resulting in a gain on natural

gas and oil properties and equipment of $10,547.

2022 Acquisitions

ConocoPhillips Asset Acquisition

On September 27, 2022 the Group acquired certain upstream assets and related facilities within the Central Region from ConocoPhillips. Given the

concentration of assets, this transaction was considered an asset acquisition rather than a business combination. When making this determination

management performed an asset concentration test considering the fair value of the acquired assets. The Group paid purchase consideration of

$209,766, including customary purchase price adjustments. Transaction costs associated with the acquisition were negligible. The Group funded the

purchase with available cash on hand and a draw on the Credit Facility. In the period from its acquisition to December 31, 2022 the ConocoPhillips

assets increased the Group’s revenue by $25,217.

East Texas Asset Acquisition (“East Texas I”)

On April 25, 2022, the Group acquired a proportionate 52.5% working interest in certain upstream assets and related facilities within the Central Region

from a private seller in conjunction with Oaktree, via the previously disclosed participation agreement between the two parties. Given the concentration

of assets, this transaction was considered an asset acquisition rather than a business combination. When making this determination, the Group

performed an asset concentration test considering the fair value of the acquired assets. The Group paid purchase consideration of $47,468, including

customary purchase price adjustments. Transaction costs associated with the acquisition were $1,550. The Group funded the purchase with available

cash on hand and a draw on the Credit Facility.

Other 2022 Acquisitions

During the period ended December 31, 2022 the Group acquired three asset retirement companies for an aggregate consideration of $13,949, inclusive

of customary purchase price adjustments. The Group also paid an additional $3,150 in deferred consideration through November 2024. During the year

ended December 31, 2024 and 2023, the Group paid $1,050 and $2,100, respectively, of the deferred consideration. When evaluating these

transactions, the Group determined they did not have significant asset concentrations and as a result it had acquired identifiable sets of inputs,

processes and outputs and concluded the transactions were business combinations.

On April 1, 2022 the Group acquired certain midstream assets, inclusive of a processing facility, in the Central Region that are contiguous to its existing

East Texas assets. The Group paid purchase consideration of $10,139, inclusive of customary purchase price adjustments and transaction costs. When

evaluating the transaction, the Group determined it did not have significant asset concentration and as a result it had acquired an identifiable set of

inputs, processes and outputs and accordingly concluded the transaction was a business combination. The fair value of the net assets acquired was

$10,742 generating a bargain purchase gain of $603.

On November 21, 2022 the Group acquired certain midstream assets in the Central Region that are contiguous to its existing East Texas assets. The

Group paid purchase consideration of $7,438, inclusive of customary purchase price adjustments and transaction costs. Given the concentration of

assets, this transaction was considered an asset acquisition rather than a business combination.

Transaction costs associated with the other acquisitions noted above were insignificant and the Group funded the aggregate cash consideration with

existing cash on hand.

Subsequent Events

On February 27, 2025, the Group announced the completion of its previously announced acquisition of certain upstream assets and related

infrastructure within Virginia, West Virginia, and Alabama of the Appalachian Region from Summit for a gross purchase price of approximately $45,000

before customary purchase price adjustments. The transaction was funded through the new ABS X Notes collateralized, in part, by the acquired assets.

Refer to Note 21 for additional information regarding debt.

On March 14, 2025, the Group announced the completion of its previously announced Maverick acquisition for a gross purchase price of approximately

$1,275,000. The transaction was funded through the assumption of approximately $700,000 of Maverick debt outstanding, the issuance of 21,194,213

new ordinary shares direct to the unitholders of Maverick, and approximately $207,000 in cash on hand. Refer to Notes 16 and 21 for additional

information regarding share capital and debt.


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Note 6 - Revenue

(Amounts in thousands, except share, per share and per unit data)

The Group extracts and sells natural gas, NGLs and oil to a variety of customers and operates most of the wells on behalf of customers and other

working interest owners. Additionally, the Group offers gathering and transportation services, as well as asset retirement and other services to third

parties. All revenue is generated within the U.S.

The following table reconciles the Group's revenue for the periods presented:


	Year Ended
	December 31, 2024	December 31, 2023	December 31, 2022
Natural gas	$464,600	$557,167	$1,544,658
NGLs	150,513	141,321	188,733
Oil	117,146	103,911	139,620
Total commodity revenue	$732,259	$802,399	$1,873,011
Midstream	32,535	30,565	32,798
Other(a)	30,047	35,299	13,540
Total revenue	$794,841	$868,263	$1,919,349

(a)Includes $16,305, $28,360, and $9,246 in third party plugging revenue and $13,742, $6,939, and $4,294 in other revenue for the years ended December 31, 2024,

2023, and 2022, respectively. Refer to Note 3 for additional information.

A significant portion of the Group’s trade receivables stem from sales of natural gas, NGLs and oil, as well as operational services. These receivables are

uncollateralized and typically collected within 30 to 60 days.

For the years ended December 31, 2024, 2023 and 2022, no single customer accounted for more than 10% of total revenues.

Note 7 - Expenses by Nature

(Amounts in thousands, except share, per share and per unit data)

The table below details the Group's expenses for the periods presented:


	Year Ended
	December 31, 2024	December 31, 2023	December 31, 2022
LOE(a)	$231,651	$213,078	$182,817
Production taxes(b)	36,043	61,474	73,849
Midstream operating expenses(c)	70,747	69,792	71,154
Transportation expenses(d)	90,461	96,218	118,073
Total operating expenses	$428,902	$440,562	$445,893
Depreciation and amortization	59,358	56,453	51,877
Depletion	197,126	168,093	170,380
Total depreciation, depletion and amortization	$256,484	$224,546	$222,257
Employees, administrative costs and professional services(e)	86,885	78,659	77,172
Costs associated with acquisitions(f)	11,573	16,775	15,545
Other adjusting costs(g)	22,375	17,794	69,967
Non-cash equity compensation(h)	8,286	6,494	8,051
Total G&A	$129,119	$119,722	$170,735
Recurring allowance for credit losses(i)	101	8,478	—
Total expenses	$814,606	$793,308	$838,885
Aggregate remuneration (including Directors):
Wages and salaries	$133,024	$124,834	$113,267
Payroll taxes	10,380	10,163	9,516
Benefits	29,252	31,912	23,828
Total employees and benefits expense	$172,656	$166,909	$146,611

(a)LOE encompasses costs incurred to maintain producing properties. These costs include direct and contract labor, repairs and maintenance, emissions reduction

initiatives, water hauling, compression, automobile, insurance, and materials and supplies expenses.

(b)Production taxes consist of severance and property taxes. Severance taxes are typically paid on produced natural gas, NGLs and oil at fixed rates set by federal, state or

local taxing authorities. Property taxes are generally based on the valuation of the Group’s natural gas and oil properties and midstream assets by the taxing


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