Diversified Energy Boosts Free Cash Flow 157% and Secures $1.175B Oklahoma Deal
DEC•Diversified Energy reported Q1 2026 adjusted free cash flow of $160M, up 157% year-over-year, and generated $556M in commodity revenue on 1,198 MMcfepd production, while returning $94M to shareholders and reducing $92M of debt. It closed the Sheridan deal adding 62 MMcfepd and announced a $1.175B Oklahoma purchase with Carlyle-backed securitization.
1. Q1 2026 Financial Results
Diversified Energy produced 1,198 MMcfepd (200 Mboepd) in Q1, generating $556M in commodity revenue. Net loss was $161M, including a $398M non-cash derivatives charge, while adjusted EBITDA reached $287M, operating cash flow was $169M and adjusted free cash flow grew 157% to $160M.
2. Shareholder Returns and Balance Sheet
The company returned $94M to shareholders in Q1, including $72M of share repurchases, and retired $92M of ABS debt. Liquidity stood at $529M of cash and undrawn credit, with a 2.2x leverage ratio as of March 31, 2026.
3. Sheridan Acquisition
On April 30, Diversified closed the Sheridan acquisition, adding approximately 62 MMcfepd of production and $52M of next-twelve-month EBITDA in East Texas, expanding its contiguous asset footprint and enhancing cash flow.
4. Carlyle Partnership and Oklahoma Acquisition
Diversified and Carlyle’s Global Credit platform agreed to acquire $1.175B of Anadarko Basin assets via an ABS-backed SPV that will add ~300 MMcfepd of production, an estimated $397M NTM EBITDA and 1,478 Bcfe of reserves, financed off-balance-sheet and expected to close in Q3 2026.
