Diversified Energy Co 10-K

Item 8. Financial Statements and Supplementary Data Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 55 Consolidated Financial Statements 57 Consolidated Balance Sheets 57 Consolidated Statements of Comprehensive Income (Loss) 58 Consolidated Statements of Changes in Stockholders' Equity 59 Consolidated Statements of Cash Flows 60 Notes to the Financial Statements 61 Supplemental Natural Gas & Oil Information (Unaudited) 96 55 Table of Contents Form 10-K Diversified Energy Company Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Diversified Energy Company Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Diversified Energy Company and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, 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 9A. 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. As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded Canvas Energy Inc. (Canvas) from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired by the Company during 2025. We have also excluded Canvas from our audit of internal control over financial reporting. Canvas is a wholly-owned subsidiary whose total assets and revenues represent approximately 9% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025. 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. 56 Table of Contents Form 10-K Diversified Energy Company 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 2 and 6 to the consolidated financial statements, the Company's natural gas and oil properties, net balance was $4.5 billion as of December 31, 2025, and the related depreciation, depletion and amortization expense for the year ended December 31, 2025 was $339.2 million, both of which substantially related to proved developed natural gas, oil, and NGL reserves. Natural gas and oil properties are accounted for using the successful efforts method of accounting. Depletion of capitalized costs for proved natural gas, oil and NGL reserves is calculated using the unit-of-production method. Leasehold costs are depleted over total proved reserves in the relevant area, while costs associated with production and development wells are depleted over proved developed producing reserves. In estimating proved natural gas, oil and NGL reserves, management depends on the interpretation and judgment of engineering and production data, as well as the use of certain economic data such as commodity prices, operating expenses, capital expenditures, and taxes. As disclosed by management, the Company’s reserves estimates are generally based on extrapolation of historical production trends. The Company's internal staff of petroleum engineers and geoscience professionals work with the third- party 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 reserves, which are derived using historical production volumes and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the data, specifically historical production volumes, methods, and assumptions used by management and its specialists in developing the estimates of proved developed natural gas, oil and NGL reserves. 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 estimates of proved developed natural gas, oil and NGL reserves. 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 (i) evaluating the methods and assumptions used by the specialists; (ii) testing the completeness and accuracy of the data used by the specialists related to historical production volumes; and (iii) evaluating the specialists' findings related to estimated future production volumes by comparing the estimate to relevant historical and current period production volumes, as applicable. /s/ PricewaterhouseCoopers LLP Birmingham, Alabama February 26, 2026 We have served as the Company’s auditor since 2020. 57 Table of Contents Consolidated Balance Sheets Diversified Energy Company As of December 31, (In thousands, except par and share data) 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 29,697 $ 5,990 Restricted cash 21,750 11,426 Accounts receivable, net 408,399 234,421 Derivatives 153,150 33,759 Prepaid expenses and other current assets 37,166 18,668 Total current assets $ 650,162 $ 304,264 Noncurrent assets: Natural gas and oil properties (successful efforts method): Proved natural gas and oil properties $ 5,808,908 $ 3,807,670 Unproved natural gas and oil properties 19,804 7,266 Accumulated depletion ( 1,320,953 ) ( 981,715 ) Natural gas and oil properties, net 4,507,759 2,833,221 Property, plant, and equipment, net 446,022 425,763 Restricted cash 93,663 34,843 Deferred tax assets 287,135 271,212 Other assets 184,218 87,507 Total assets $ 6,168,959 $ 3,956,810 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 81,814 $ 35,013 Accrued liabilities 193,742 95,366 Revenue to be distributed 240,125 172,309 Current portion of long-term debt, net 236,553 209,463 Derivatives 155,959 163,676 Other current liabilities 167,501 101,285 Total current liabilities $ 1,075,694 $ 777,112 Noncurrent liabilities: Asset retirement obligations $ 863,841 $ 619,185 Long-term debt, net 2,715,461 1,495,468 Derivatives 440,567 608,869 Other liabilities 78,406 44,219 Total liabilities $ 5,173,969 $ 3,544,853 Commitments and contingencies ( Note 19 ) Stockholders' equity: Common stock ( $ 0.01 par value; 350,000,000 shares authorized; 76,979,625 and 50,649,844 shares issued and outstanding) $ 769 $ 14,595 Additional paid in capital 1,491,719 1,145,889 Accumulated other comprehensive income (loss) ( 583 ) ( 935 ) Retained earnings (accumulated deficit) ( 507,847 ) ( 759,471 ) Total stockholders' equity attributable to DEC $ 984,058 $ 400,078 Noncontrolling interests 10,932 11,879 Total stockholders' equity $ 994,990 $ 411,957 Total liabilities and stockholders' equity $ 6,168,959 $ 3,956,810 The accompanying notes are an integral part of the Consolidated Financial Statements . 58 Table of Contents Consolidated Statements of Comprehensive Income (Loss) Diversified Energy Company For the Year Ended December 31, (In thousands, except share and per share data) 2025 2024 2023 Revenue Natural gas $ 830,247 $ 464,600 $ 557,167 NGLs 207,868 150,513 141,321 Oil 500,706 117,146 103,911 Total commodity revenue $ 1,538,821 $ 732,259 $ 802,399 Gain (loss) on derivatives 217,687 ( 37,551 ) 1,080,516 Midstream 40,492 32,535 30,565 Other 32,142 30,047 35,300 Total revenue $ 1,829,142 $ 757,290 $ 1,948,780 Operating expense Lease operating expense $ ( 457,593 ) $ ( 231,651 ) $ ( 213,078 ) Production taxes ( 86,709 ) ( 36,043 ) ( 61,474 ) Midstream operating expense ( 79,185 ) ( 72,098 ) ( 71,307 ) Transportation expense ( 115,267 ) ( 90,461 ) ( 96,218 ) Accretion of asset retirement obligation ( 48,607 ) ( 28,464 ) ( 23,903 ) General and administrative expense ( 167,626 ) ( 129,745 ) ( 128,626 ) Depreciation, depletion and amortization ( 412,506 ) ( 291,995 ) ( 273,316 ) Gain (loss) on natural gas and oil properties and equipment 73,368 26,069 28,124 Total operating expense $ ( 1,294,125 ) $ ( 854,388 ) $ ( 839,798 ) Income (loss) from operations $ 535,017 $ ( 97,098 ) $ 1,108,982 Other income (expense) Gain (loss) on sale of equity interest $ — $ — $ 11,065 Interest expense ( 209,967 ) ( 136,801 ) ( 130,859 ) Loss on debt extinguishment ( 26,971 ) ( 16,377 ) — Other income (expense) 3,270 2,338 385 Income (loss) before taxation $ 301,349 $ ( 247,938 ) $ 989,573 Income tax benefit (expense) 40,550 144,845 ( 239,184 ) Net income (loss) $ 341,899 $ ( 103,093 ) $ 750,389 Other comprehensive income (loss) 352 ( 1,822 ) ( 270 ) Total comprehensive income (loss) $ 342,251 $ ( 104,915 ) $ 750,119 Net income (loss) attributable to: DEC $ 341,115 $ ( 104,365 ) $ 748,706 Noncontrolling interest 784 1,272 1,683 Net income (loss) $ 341,899 $ ( 103,093 ) $ 750,389 Earnings (loss) per share attributable to DEC Basic $ 4.67 $ ( 2.17 ) $ 15.87 Diluted $ 4.58 $ ( 2.17 ) $ 15.76 Weighted average shares outstanding Basic 72,969,687 48,031,916 47,165,380 Diluted 74,478,592 48,031,916 47,514,521 The accompanying notes are an integral part of the Consolidated Financial Statements . 59 Table of Contents Consolidated Statements of Changes in Stockholders’ Equity Diversified Energy Company Common Stock (In thousands, except share data) Shares Amount Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders' Equity Attributable to DEC Noncontrolling Interest Total Stockholders ' Equity Balance as of January 1, 2023 41,446,773 $ 12,336 $ 927,062 $ 1,157 $ ( 1,145,173 ) $ ( 204,618 ) $ 14,964 $ ( 189,654 ) Net income (loss) — — — — 748,706 748,706 1,683 750,389 Other comprehensive income (loss) — — — ( 270 ) — ( 270 ) — ( 270 ) Issuances of common stock 6,756,451 1,555 155,233 — — 156,788 — 156,788 Repurchases of common stock ( 646,762 ) ( 161 ) ( 10,887 ) — — ( 11,048 ) — ( 11,048 ) Share-based compensation — — 6,037 — ( 2,990 ) 3,047 — 3,047 Dividends declared — — 567 — ( 168,041 ) ( 167,474 ) — ( 167,474 ) Distributions to noncontrolling interest owners — — — — — — ( 4,043 ) ( 4,043 ) Balance as of December 31, 2023 47,556,462 $ 13,730 $ 1,078,012 $ 887 $ ( 567,498 ) $ 525,131 $ 12,604 $ 537,735 Net income (loss) — — — — ( 104,365 ) ( 104,365 ) 1,272 ( 103,093 ) Other comprehensive income (loss) — — — ( 1,822 ) — ( 1,822 ) — ( 1,822 ) Issuances of common stock 4,731,412 1,185 54,518 — — 55,703 — 55,703 Repurchases of common stock ( 1,638,030 ) ( 320 ) ( 20,809 ) — — ( 21,129 ) — ( 21,129 ) Share-based compensation — — 10,003 — ( 3,744 ) 6,259 — 6,259 Dividends declared — — 24,165 — ( 83,864 ) ( 59,699 ) — ( 59,699 ) Distributions to noncontrolling interest owners — — — — — — ( 1,997 ) ( 1,997 ) Balance as of December 31, 2024 50,649,844 $ 14,595 $ 1,145,889 $ ( 935 ) $ ( 759,471 ) $ 400,078 $ 11,879 $ 411,957 Net income (loss) — — — — 341,115 341,115 784 341,899 Other comprehensive income (loss) — — — 352 — 352 — 352 Issuances of common stock 33,666,817 7,657 416,468 — — 424,125 — 424,125 Repurchases of common stock ( 7,337,036 ) ( 1,153 ) ( 99,063 ) — — ( 100,216 ) — ( 100,216 ) Share-based compensation — — 12,615 — ( 4,486 ) 8,129 — 8,129 Dividends declared — — ( 4,520 ) — ( 85,005 ) ( 89,525 ) — ( 89,525 ) Distributions to noncontrolling interest owners — — — — — — ( 1,731 ) ( 1,731 ) U.S. Domestication — ( 20,330 ) 20,330 — — — — — Balance as of December 31, 2025 76,979,625 $ 769 $ 1,491,719 $ ( 583 ) $ ( 507,847 ) $ 984,058 $ 10,932 $ 994,990 The accompanying notes are an integral part of the Consolidated Financial Statements . 60 Table of Contents Consolidated Statements of Cash Flows Diversified Energy Company For the Year Ended December 31, (In thousands) 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 341,899 $ ( 103,093 ) $ 750,389 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion and amortization 412,506 291,995 273,316 Accretion of asset retirement obligations 48,607 28,464 23,903 Income tax (benefit) expense ( 40,550 ) ( 144,845 ) 239,184 (Gain) loss on derivatives ( 217,687 ) 37,551 ( 1,080,516 ) Cash proceeds (payments) on settlement of derivatives 23,844 151,479 174,821 Settlement of asset retirement costs ( 28,088 ) ( 8,375 ) ( 5,961 ) (Gain) loss on natural gas and oil properties and equipment ( 73,368 ) ( 26,069 ) ( 28,124 ) (Gain) loss on sale of equity interest — — ( 11,065 ) Loss on early retirement of debt 26,971 16,377 — Derivative modifications — — 26,686 Non-cash share-based compensation 10,398 8,286 6,494 Other 15,729 15,536 16,005 Changes in working capital: Accounts receivable, net 2,594 ( 18,645 ) 107,274 Other assets ( 8,753 ) ( 7,799 ) 4,452 Accounts payable ( 16,966 ) ( 17,523 ) ( 38,328 ) Other liabilities ( 32,517 ) ( 2,689 ) ( 167,099 ) Net cash provided by operating activities $ 464,619 $ 220,650 $ 291,431 Cash flows from investing activities: Consideration for business acquisitions, net of cash acquired $ ( 329,709 ) $ — $ — Consideration for asset acquisitions, net of cash acquired ( 477,445 ) ( 282,335 ) ( 262,329 ) Proceeds from divestitures 171,586 68,723 92,487 Capital expenditures ( 184,600 ) ( 52,100 ) ( 74,252 ) Deferred consideration payments — ( 1,050 ) ( 2,620 ) Net cash (used in) investing activities $ ( 820,168 ) $ ( 266,762 ) $ ( 246,714 ) Cash flows from financing activities: Repayment of borrowings $ ( 2,433,296 ) $ ( 1,653,489 ) $ ( 1,547,912 ) Proceeds from borrowings 3,172,533 1,844,768 1,537,231 Prepayment charge on early retirement of debt — ( 1,752 ) — Debt issuance costs ( 35,166 ) ( 20,267 ) ( 13,776 ) Hedge modifications associated with ABS Notes ( 171,134 ) — ( 6,376 ) Proceeds from equity issuance, net 117,468 — 156,788 Proceeds from lease modifications — 8,568 — Principal element of lease payments ( 15,816 ) ( 12,473 ) ( 10,263 ) Dividends to stockholders ( 85,005 ) ( 83,864 ) ( 168,041 ) Distributions to noncontrolling interest owners ( 1,731 ) ( 1,996 ) ( 4,043 ) Repurchases of common stock (stock repurchase program) ( 76,753 ) ( 15,901 ) ( 11,048 ) Repurchases of common stock by the EBT, net ( 22,700 ) ( 5,228 ) — Net cash provided by (used in) financing activities $ 448,400 $ 58,366 $ ( 67,440 ) Net change in cash, cash equivalents and restricted cash 92,851 12,254 ( 22,723 ) Cash, cash equivalents and restricted cash, beginning of period 52,259 40,005 62,728 Cash, cash equivalents and restricted cash, end of period $ 145,110 $ 52,259 $ 40,005 Cash and cash equivalents 29,697 5,990 3,753 Restricted cash 115,413 46,269 36,252 Total cash, cash equivalents and restricted cash $ 145,110 $ 52,259 $ 40,005 The accompanying notes are an integral part of the Consolidated Financial Statements . 61 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Index to the Notes to the Consolidated Financial Statements Note 1 - Nature of the Business 61 Note 13 - Asset Retirement Obligations 84 Note 2 - Summary of Significant Accounting Policies 61 Note 14 - Leases 85 Note 3 - Acquisitions & Divestitures 68 Note 15 - Borrowings 86 Note 4 - Income Tax 71 Note 16 - Accounts Payable & Accrued Liabilities 92 Note 5 - Earnings (Loss) Per Share 74 Note 17 - Other Liabilities 92 Note 6 - Natural Gas & Oil Properties 75 Note 18 - Fair Value 93 Note 7 - Property, Plant & Equipment 75 Note 19 - Commitments & Contingencies 94 Note 8 - Derivatives 76 Note 20 - Supplemental Cash Flow Information 95 Note 9 - Accounts Receivable 80 Note 21 - Supplemental Quarterly Financial Information 95 Note 10 - Other Assets 81 Note 22 - Subsequent Events 95 Note 11 - Stockholders' Equity 81 Supplemental Natural Gas & Oil Information (Unaudited) 96 Note 12 - Compensation Plans 82 Note 1 - Nature of the Business Diversified Energy Company , a Delaware corporation, and its wholly owned subsidiaries (collectively, the “Company”) is an independent energy company engaged in the production, transportation and marketing of natural gas, oil and NGLs. The Company’s assets are located in the United States within the following geographical operating areas: • Appalachian Region, which spans Ohio, Pennsylvania, Virginia, West Virginia, Kentucky, Tennessee and Alabama; • Central Region, which includes Texas, Oklahoma, New Mexico, Louisiana and Arkansas; • Other, which includes Florida and Wyoming. The Company is incorporated in the United States. Previously, the Company operated as a public limited company under UK law, with its shares listed on the London Stock Exchange (“LSE”) since 2017. In December 2023, the Company’s shares were also admitted to trading on the New York Stock Exchange (NYSE) under the ticker “DEC.” Following the Company’s U.S. Domestication, its principal trading market is now the NYSE, although its shares continue to be listed on the LSE under the Equity Shares (International Commercial Companies Secondary Listing) category. On November 21, 2025 , Diversified Energy Company PLC, a public company limited by shares, incorporated under the laws of England and Wales, completed the U.S. Domestication, which was approved by the shareholders of Diversified Energy Company PLC, resulting in Diversified Energy Company, a Delaware corporation, becoming our publicly traded parent company (the “U.S. Domestication”). Diversified Energy Company PLC’s stockholders and the High Court of Justice of England and Wales approved the scheme of arrangement effecting the U.S. Domestication. Effective after the close of market trading on November 21, 2025 , all issued and outstanding common stock of Diversified Energy Company PLC were exchanged on a one -for-one basis for newly issued shares of corresponding common stock of Diversified Energy Company, and all issued and outstanding equity awards of Diversified Energy Company PLC were assumed by Diversified Energy Company and were converted into rights to acquire Diversified Energy Company shares of common stock on the same terms. The common stock of Diversified Energy Company began trading on November 24, 2025 (the first trading day following the U.S. Domestication), and the Company’s trading symbol on NYSE remained unchanged as “DEC.” Note 2 - Summary of Significant Accounting Policies Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries . All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests in subsidiaries are presented as a separate component of equity in the Consolidated Financial Statements . Use of Estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements , as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the quantities of proved natural gas and oil reserves. Reservoir engineering is a subjective process, and there are numerous uncertainties inherent in estimating quantities of proved reserves. The accuracy of any reserves estimate depends 62 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company on the quality of available data and the interpretation and judgment of engineering and geological information. As a result, actual quantities recovered may differ from estimated reserves. Other items subject to estimates and assumptions include valuation of assets acquired and liabilities assumed in a business combination, the carrying amounts of natural gas and oil properties, property, plant and equipment, the valuation of certain derivatives, asset retirement obligations, and valuation allowances for deferred income tax assets, among others. Management believes these estimates are reasonable, however, actual results could differ from these estimates. Segment Reporting In accordance with ASC 280, Segment Reporting , the Company establishes operating segments based on the components of the business that are regularly reviewed by the chief executive officer, who serves as the chief operating decision maker (“CODM”), for the purposes of allocating resources and assessing performance. The CODM evaluates the Company’s operations in a consolidated and complementary manner, with a focus on vertical integration and margin improvement. As of December 31, 2025 , the Company considered each of the operating areas in aggregate to represent a single reportable segment due to the similar nature of the exploration and production business across the Company. The CODM uses consolidated net income (loss), for purposes of allocating resources and in assessing the Company’s operating performance. Additionally, the CODM is regularly provided information on lease operating expense, transportation expense, production taxes, and general and administrative expense, which are significant segment expenses. Other segment items primarily consist of depreciation, depletion and amortization, interest expense, and income tax expense (benefit). The Company’s significant segment expenses and other segment items are derived from, and can be found within the Consolidated Statements of Comprehensive Income (Loss) . The measure of segment assets is total assets as reported on the Consolidated Balance Sheets . As of December 31, 2025 and 2024 the Company’s total assets were $ 6.2 billion and $ 4.0 billion , respectively. Additionally, in analyzing company performance, the CODM reviews capital expenditures. During the years ended December 31, 2025 , 2024 and 2023, the Company’s capital expenditures wer e $ 185 million , $ 52 million , and $ 74 million , respectively. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less. The Company maintains cash balances at financial institutions, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to cash and cash equivalents. R estricted Cash The Company classifies cash as restricted when its withdrawal or use is limited by contractual or regulatory requirements. Restricted cash consists of amounts held on deposit for specific purposes and is not available for general corporate use. Restricted cash is presented as either a current or noncurrent asset, based on the expected timing of the related obligations. Restricted cash includes: • Amounts held as collateral for surety bonds or required by state agencies for well abandonment obligations. • Cash reserves required for interest payments and fees related to the Company’s asset-backed securitizations, which are managed by an independent indenture trustee. The Company does not include restricted cash in cash and cash equivalents, as these funds are not available for immediate use. As of (in thousands) December 31, 2025 December 31, 2024 Cash restricted by asset-backed securitizations $ 98,681 $ 45,880 Other restricted cash 16,732 389 Total restricted cash $ 115,413 $ 46,269 Classified as: Current asset $ 21,750 $ 11,426 Noncurrent asset 93,663 34,843 Total $ 115,413 $ 46,269 63 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Business Combinations and Asset Acquisitions The Company accounts for business combinations and asset acquisitions in accordance with ASC 805, Business Combinations . For each transaction, management evaluates whether the acquired set of assets and activities constitutes a business by first applying the screen test. If substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets, the transaction is accounted for as an asset acquisition. If the screen test is not met, the Company performs an evaluation to determine if the minimum required inputs and processes exist in order to be accounted for as a business combination. For business combinations, the acquisition method is applied, and identifiable assets acquired and liabilities assumed are generally recognized at their acquisition-date fair values. The excess of the purchase price over the fair value of net identifiable assets is recorded as goodwill; if the fair value of net assets exceeds the purchase price, a gain on bargain purchase is recognized in earnings after reassessment. Noncontrolling interests are measured at fair value. Transaction costs are expensed as incurred. For asset acquisitions, the purchase price, including transaction costs, is allocated to the acquired assets and liabilities based on relative fair values. Goodwill is not recognized, and any excess of net asset value over purchase price is not recorded as a gain. Changes in contingent consideration are generally recognized as adjustments to the asset basis. The determination and allocation of fair values, as well as the assessment of whether an acquisition constitutes a business, require significant management judgment and the use of estimates, including valuation techniques, discount rates, and assumptions about future cash flows. For business combinations, provisional fair value amounts may be adjusted during the measurement period, not to exceed one year from the acquisition date, if new information becomes available. Inventory Inventory consists primarily of natural gas and materials and supplies used in the Company’s operations. Inventory is stated at the lower of cost or net realizable value, with cost determined using the weighted average cost method. Net realizable value represents the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. As of December 31, 2025 and 2024 , inventory balances were not material to the Consolidated Financial Statements and are included within “other current assets” on the Consolidated Balance Sheets . Accounts Receivable Accounts receivable primarily consist of receivables from sales of natural gas and oil production delivered to purchasers and receivables due from joint interest owners on properties the Company operates. Accounts receivable are stated at amounts due from joint interest owners or purchasers, net of an allowance for expected credit losses. The Company evaluates the financial condition of customers before extending credit and does not typically require collateral. The allowance for credit losses is determined using the Current Expected Credit Losses (“CECL”) model, which considers historical loss experience, current economic conditions, and reasonable forecasts of future conditions. The Company reviews the adequacy of the allowance regularly and adjusts it as necessary. Adjustments to the allowance are recognized in the Consolidated Statement of Operations. As of December 31, 2025 and 2024 , the Company recorded an allowance for credit losses of $ 36 million and $ 16 million , respectively. Refer to Note 9 for additional information. Borrowings Borrowings are initially recognized at the fair value of proceeds received, net of directly attributable transaction costs. Subsequently, borrowings are carried at amortized cost, with transaction costs, discounts, and premiums amortized over the term of the borrowings using the effective interest method. Interest expense is recognized in the Consolidated Statements of Comprehensive Income (Loss) based on the effective interest rate applicable to each class of borrowing. Refer to Note 15 for additional information. Derivatives The Company utilizes derivatives, such as swaps and collars, to manage risks associated with commodity price volatility and the resulting unpredictability of cash flows. These contracts are settled financially each month and do not involve physical delivery of commodities. Management is responsible for the oversight and application of the Company’s derivative accounting policies. Derivative contracts are initially recognized at fair value on the contract date and remeasured to fair value at each reporting date in accordance with U.S. GAAP. Derivatives reflected as current in the consolidated balance sheets represent the estimated fair value of derivatives scheduled to settle over the next 12 months based on market prices/rates as of the respective balance sheet dates. Cash settlements of derivatives are generally classified as operating cash flows unless the derivatives are deemed to contain, for accounting purposes, a significant financing element at contract inception, in which case these cash settlements are classified as financing cash flows in the accompanying consolidated statements of cash flows. Netting of derivative assets and liabilities is applied at each reporting date when a legal right of offset exists under a master netting arrangement. All changes in fair value are recognized in the 64 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Consolidated Statements of Comprehensive Income (Loss) under gain (loss) on derivatives in the period incurred. None of the Company’s derivatives are designated as hedging instruments under ASC 815. All derivatives are classified as Level 2 instruments under ASC 820, as their valuation relies on observable market inputs other than quoted prices. Additional information regarding the fair value of derivatives and the Company’s exposure to commodity price risk is provided in Note 8 . Natural Gas and Oil Properties Natural gas and oil properties are accounted for using the successful efforts method of accounting. Development & Acquisition Costs Costs incurred to acquire mineral interests in properties, including purchases, leases, and related legal fees, are capitalized when incurred. Expenditures for the construction, installation or completion of infrastructure facilities, such as platforms, and the drilling and equipping of development wells, including delineation wells, are capitalized as part of natural gas and oil properties. The initial cost of an asset includes its purchase price or construction cost, directly attributable costs necessary to bring the asset to operational status, and the initial estimate of the asset retirement obligations. Depletion Depletion of capitalized costs for proved natural gas, oil and NGL reserves is calculated using the unit-of-production method. Leasehold costs are depleted over total proved reserves in the relevant area, while costs associated with production and development wells are depleted over proved developed producing reserves. Fair Value of Acquired Properties For business combinations, the Company determines the fair value of acquired natural gas and oil properties using the income approach, which involves estimating future net cash flows based on future production volumes, production and development costs, and forward commodity prices. These cash flows are discounted using a weighted average cost of capital and appropriate risk factors. Proved Reserves 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. Impairment of Natural Gas & Oil Properties The Company reviews its natural gas and oil properties for impairment in accordance with ASC 360. Impairment indicators include significant or prolonged declines in commodity prices, adverse changes in market conditions, downward revisions of reserve estimates, or increases in operating costs. When indicators of impairment are present, the Company performs a recoverability test at the field level by comparing the carrying value of the property to the undiscounted expected future net cash flows. If the carrying value is not recoverable, an impairment loss is recognized to reduce the asset’s carrying value to its estimated fair value, determined using discounted future net cash flows. For the years ended December 31, 2025 , 2024 , and 2023 , no impairment losses were recorded. Impairment losses, when recognized, are reflected in the Consolidated Statements of Comprehensive Income (Loss) within the appropriate functional category. Property, Plant and Equipment Property, plant and equipment are recorded at cost, which includes the purchase price and all costs directly attributable to acquiring the asset and preparing for its intended use. Costs may include installation, delivery, site preparation, and professional fees. Expenditures for major renewals and improvements that extend the useful life of an asset are capitalized, while maintenance and repairs are expensed as incurred. 65 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows: Range in Years Buildings and leasehold improvements 40 Equipment 5 - 10 Motor vehicles 5 Midstream assets 10 - 15 Other property and equipment 5 - 10 Assets held under finance leases (right-of-use assets) are depreciated over the shorter of the lease term or the estimated useful life of the underlying asset, in accordance with ASC 842. Software The Company capitalizes certain costs incurred in the development or acquisition of software for internal use in accordance with ASC 350-40. Capitalization begins when the preliminary project stage is complete and management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used as intended. Capitalized costs include direct costs of materials and services, payroll and payroll-related costs for employees directly associated with the project, and a reasonable allocation of overhead. Costs incurred during the application development stage are capitalized, while costs incurred during the preliminary project stage and post-implementation/operation stage, including maintenance and training, are expensed as incurred. Software development costs acquired from third parties and controlled by the Company are capitalized when the software is ready for its intended use. Capitalized software development costs are recorded as property, plant and equipment and depreciated on a straight- line basis over their estimated useful lives, beginning when the software is placed in service. The Company depreciates software on a straight-line basis over the estimated useful life of 3 years. Noncontrolling Interests Noncontrolling interests represent the portion of equity in subsidiaries not attributable to the Company’s stockholders and are presented as a separate component of equity in the Consolidated Balance Sheets . The acquisition of a noncontrolling interest in a subsidiary and the sale of an interest while retaining control are accounted for as transactions within equity and are reported within noncontrolling interests in the consolidated financial statements. During the years ended December 31, 2025 , 2024 and 2023 , the Company recorded net income attributable to noncontrolling interests o f $ 0.8 million , $ 1.3 million and $ 1.7 million , respectively. As of December 31, 2025 and 2024 , the noncontrolling interests balance w as $ 11 million and $ 12 million , re spectively. Distributions to noncontrolling interest owners w ere $ 1.7 million , $ 2.0 million and $ 4.0 million for the years ended December 31, 2025 , 2024 and 2023 , respectively. A reconciliation of the beginning and ending balances of noncontrolling interests is provided in the Consolidated Statements of Changes in Stockholders' Equity . Leases The Company accounts for leases in accordance with ASC 842, Leases . At the commencement date of a lease, the Company recognizes a right-of-use (“ROU”) asset and a lease liability for contracts that convey the right to control the use of an identified asset for a period of time in exchange for consideration. The lease liability is initially measured at the present value of future lease payments, discounted using the rate implicit in the lease, or if not readily determinable, the Company’s incremental borrowing rate. The ROU asset is initially measured at cost, which includes the initial measurement of the lease liability, any lease payments made at or before commencement, initial direct costs, and an estimate of costs to restore the underlying asset or site, as required by the lease. Leases are classified as either finance or operating leases at inception. For finance leases, the Company recognizes interest expense on the lease liability and amortization expense on the ROU asset separately. For operating leases, a single lease expense is recognized on a straight-line basis over the lease term. The lease liability is subsequently measured at amortized cost, and the ROU asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The Company remeasures the lease liability and adjusts the ROU asset when certain events occur, such as changes in lease term or lease payments. The Company may elect not to recognize ROU assets and lease liabilities for short-term leases. Refer to Note 14 for additional information. 66 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company 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 Company 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 Company recognizes changes in estimates prospectively, with corresponding adjustments to the liability and the associated noncurrent asset. 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 Company’s retirement plan, an assumed inflation rate, and the discount rate. Refer to Note 13 for additional information. Income Tax The Company 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 Company 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 Company 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. Deferred Income Tax Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Consolidated 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 Company 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 Income Tax Current income tax assets and liabilities for the years ended December 31, 2025 and 2024 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 Company 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 Company measures its tax balances based on either the most likely amount or the expected value, depending on which method better predicts the resolution of th e uncertainty. Refer to Note 4 for additional information. Revenue Recognition The Company extracts and sells natural gas, NGLs and oil to a variety of customers. Additionally, the Company offers gathering and transportation services, as well as asset retirement and other services to third parties. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company applies the five-step model to all revenue streams: (1) Identify the contract(s) with a customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to the performance obligations; and (5) Recognize revenue when (or as) the performance obligations are satisfied. 67 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company For commodity revenue, control is typically transferred at the delivery point (e.g., vessel, pipe, sales meter), which is when the Company satisfies its performance obligation. Revenue is recognized based on the Company’s working interest and the terms of the relevant contracts. Revenue from gathering, transportation, plugging, and water disposal services is recognized as the services are performed, based on contractually agreed-upon prices and volumes. Revenue is presented net of sales taxes, excise duties, and similar levies. The Company assesses whether it is acting as principal or agent in all arrangements and recognizes revenue accordingly. Disaggregated revenue by major product and service line (including natural gas, NGLs, oil, midstream, and other revenue) is presented on the face of the Consolidated Statement of Operations. These categories reflect the nature, timing, and uncertainty of revenue and cash flows and are consistent with how management evaluates the business. A significant portion of the Company’s accounts receivable stem from sales of natural gas, NGLs and oil. These receivables are uncollateralized and typically collected within 30 to 60 days. For the years ended December 31, 2025 , 2024 and 2023 , no single customer accounted for more than 10% of total revenues. The Company operates in a single reportable segment, and all revenue is generated in the United States. Share-Based Payments The Company accounts for share-based payments in accordance with ASC 718, Compensation—Stock Compensation . All of the Company’s share-based awards are equity-settled and measured at fair value on the grant date. The Company has three types of share- based payment awards: RSUs, PSUs, and Options. The fair value of RSUs is measured using the stock price at the grant date. The fair value of PSUs with market-based conditions is measured using a Monte Carlo simulation model, with inputs including share price at grant date, expected volatility, expected dividends, risk-free rate of interest, and expected exercise patterns. The fair value of Options is determined using the Black-Scholes model, with inputs including share price at grant date, exercise price, expected volatility, and risk-free rate of interest. The grant date fair value of share-based awards is recognized as compensation expense over the requisite service period, typically the vesting period. For awards with market-based conditions, expense is recognized regardless of whether the condition is met. The Company accounts for forfeitures as they occur. Recently Issued Accounting Standards Not Yet Adopted The following accounting standards have been issued but are not yet effective and have not been applied in these financial statements: ASU Number Description Effective Date Impact on Financial Statements ASU 2024-04 Debt—Debt with Conversion and Other Options January 1, 2026 The Company is assessing the impact, but does not expect a material effect. ASU 2025-01 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures January 1, 2027 The Company is currently assessing the impact on its disclosures. ASU 2025-05 Measurement of credit losses for accounts receivable and contract assets from transactions accounted for under Topic 606 January 1, 2026 The Company is assessing the impact, but does not expect a material effect. ASU 2025-06 Accounting for software costs that are accounted for under Subtopic 350-40 (internal use software) January 1, 2028 The Company is assessing the impact, but does not expect a material effect. ASU 2025-07 Derivatives scope refinements and scope clarification for share-based noncash consideration from a customer in a revenue contract January 1, 2027 The Company is assessing the impact, but does not expect a material effect. ASU 2025-11 Interim financial statements and notes prepared in accordance with GAAP January 1, 2029 The Company is assessing the impact, but does not expect a material effect. The Company will adopt these standards on their respective effective dates. Based on preliminary assessment, the Company does not expect the adoption of these to have a material impact on its consolidated financial statements. 68 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Note 3 - Acquisitions & Divestitures 2025 Acquisitions Canvas Energy Inc. (“Canvas”) Asset Acquisition On November 24, 2025 , the Company acquired Canvas. The Company determined that substantially all of the fair value of the gross assets acquired was concentrated in a single asset group; therefore, the transaction was accounted for as an asset acquisition. The Company paid purchase consideration of $ 533 million , inclusive of customary purchase price adjustments. The purchase consideration consisted of the issuance of 3,718,209 new common shares direct to the unitholders of Canvas and $ 399 million in cash, inclusive of transaction costs of $ 13 million . As part of the acquisition, the Company paid off on the acquisition date the $ 81 million balance outstanding on Canvas’s credit facility . Refer to Notes 11 and 15 for additional information regarding stockholders’ equity and debt. The fair value of the consideration transferred and the allocation to the assets acquired and liabilities assumed based on their relative fair values as of November 24, 2025 were as follows: Consideration paid Cash consideration $ 398,534 Fair value of common stock issued (a) 53,951 Payoff of existing credit facility 80,602 Total consideration $ 533,087 Net assets acquired Cash $ 51,679 Natural gas and oil properties 553,329 Property, plant and equipment, net 3,097 Other noncurrent assets 773 Accounts receivable, net 22,515 Other current assets 6,323 Asset retirement obligations ( 10,963 ) Deferred tax liability ( 43,118 ) Other noncurrent liabilities ( 573 ) Accounts payable ( 8,625 ) Other current liabilities ( 41,350 ) Net assets acquired $ 533,087 (a) The fair value of the common stock issued was based on the closing price of the Company’s common stock on November 24, 2025 of $ 14.51 . The fair value of our common stock is a Level 1 input as our stock price is a quoted price in an active market. Maverick Natural Resources, LLC (“Maverick”) Business Combination On March 14, 2025 , the Company acquired Maverick. The Company determined the transaction did not have a significant concentration of assets and that it acquired an identifiable set of inputs, processes, and outputs. As a result, the Company concluded the transaction was a business combination. The Company paid purchase consideration of approximately $ 666 million , inclusive of customary purchase price adjustments. The purchase consideration consisted of the issuance of 21,194,213 new common shares direct to the unitholders of Maverick and $ 211 million in cash. As part of the acquisition, the Company paid off on the acquisition date the $ 202 million balance outstanding on Maverick’s credit facility and assumed $ 518 million of ABS Maverick Notes outstanding. Transaction costs associated with the acquisition were $ 21 million and are included within G&A expense in the Consolidated Statements of Comprehensive Income (Loss) . Refer to Notes 11 and 15 for additional information regarding stockholders’ equity and debt . 69 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company The fair value of the consideration transferred and the provisional fair value amounts of the assets acquired and liabilities assumed as of March 14, 2025 were as follows: Consideration paid Cash consideration $ 210,753 Fair value of common stock issued (a) 253,270 Payoff of existing credit facility 201,533 Total consideration $ 665,556 Net assets acquired Cash $ 20,894 Natural gas and oil properties 1,298,477 Property, plant and equipment, net 43,585 Restricted cash 62,048 Other noncurrent assets 28,861 Derivatives, net 4,829 Accounts receivable, net 153,205 Other current assets 14,695 Asset retirement obligations ( 179,528 ) Borrowings ( 518,394 ) Other noncurrent liabilities ( 38,915 ) Accounts payable ( 42,967 ) Accrued operating expenses ( 55,583 ) Revenues payable ( 44,306 ) Other current liabilities ( 81,345 ) Net assets acquired $ 665,556 (a) The fair value of the common stock issued was based on the closing price of the Company’s common stock on March 14, 2025 of $ 11.95 . The fair value of our common stock is a Level 1 input as our stock price is a quoted price in an active market. The fair value of the natural gas and oil properties was based on estimated future production volumes, adjusted for risk characteristics associated with the classification of the acquired reserves, and related future net cash flows discounted using a weighted average cost of capital. The Company utilized NYMEX strip pricing adjusted for inflation. Management utilized the assistance of a third-party valuation expert to estimate the fair value of the natural gas and oil properties acquired. The Company considers the discount rate, commodity pricing, production and operating expense to be the assumptions most sensitive to the fair value of the acquired natural gas and oil properties and represent Level 3 inputs, other than NYMEX strip pricing which represents a Level 1 input. The following table summarizes the unaudited pro forma financial information of the Company as if the Maverick acquisition had occurred on January 1, 2024 . For the Year Ended December 31, (in thousands, except per share data) 2025 2024 Revenues $ 1,983,732 $ 1,544,576 Net income (loss) 358,945 ( 180,495 ) Basic earnings (loss) per share $ 4.92 $ ( 3.76 ) Diluted earnings (loss) per share $ 4.82 $ ( 3.76 ) The unaudited pro forma information is not necessarily indicative of the operating results that would have occurred, nor is it necessarily indicative of future operating results of the combined entities. Summit Natural Resources, LLC (“Summit”) Asset Acquisition On February 27, 2025 , the Company acquired certain upstream assets and related infrastructure within Virginia, West Virginia, and Alabama of the Appalachian Region from Summit. Given the concentration of assets, this transaction was considered an asset acquisition rather than a business combination. The Company paid purchase consideration of $ 42 million , inclusive of transaction costs of $ 0.4 million and customary purchase price adjustments, substantially all of which was accounted for as natural gas and oil properties. The transaction was funded through proceeds from the new ABS X Notes collateralized, in part, by the acquired assets. Refer to Note 12 for additional information regarding debt. 70 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Other Acquisitions During the year ended December 31, 2025 , the Company acquired certain midstream and upstream assets that are contiguous to its existing Central Region assets. The Company paid total purchase consideration of $ 16 million , inclusive of non-cash consideration of $ 4 million , customary purchase price adjustments, and transaction costs. Given the concentration of assets, these transactions were considered asset acquisitions rather than business combinations. 2025 Divestitures During the year ended December 31 , 2025, the Company divested certain non-core undeveloped acreage across its operating footprint for consideration of $ 160 million . The consideration received exceeded the carrying amount of the net assets divested resulting in a gain on natural gas and oil properties and equipment of $ 95 million . Additionally, the disposal of various property, plant and equipment in the normal course of business resulted in a loss on natural gas and oil properties and equipment of $ 22 million . 2024 Acquisitions East Texas II Asset Acquisition On October 29, 2024 , the Company 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 Company assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business combination. When making this determination, management concluded that the acquired assets did not meet the definition of a business. The Company paid purchase consideration of $ 68 million , inclusive of transaction costs of $ 1 million and customary purchase price adjustments. The transaction was funded through a combination of cash consideration of $ 40 million , drawing from a senior secured bank facility supported by the acquired assets and existing liquidity, and the issuance of 2,342,445 new shares of common stock direct to the Seller. Refer to Notes 11 and 15 for additional information regarding common stock and debt, respectively. Crescent Pass Energy (“Crescent Pass”) Asset Acquisition On August 15, 2024 , the Company acquired certain upstream assets and related infrastructure in the East Texas area of the Central Region from Crescent Pass. The Company assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business combination. When making this determination, management concluded that the acquired assets did not meet the definition of a business. The Company paid purchase consideration of $ 98 million , inclusive of transaction costs of $ 1 million and customary purchase price adjustments. The transaction was funded through a combination of the issuance of 2,249,650 new shares of common stock direct to Crescent Pass and cash consideration of $ 69 million from the new Term Loan II supported by the acquired assets. Refer to Notes 11 and 15 for additional information regarding common stock and debt, respectively. Oaktree Capital Management, L.P. (“Oaktree”) Working Interest Asset Acquisition On June 6, 2024 the Company acquired Oaktree’s proportionate working interest in previously completed joint acquisitions. The Company assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business combination. When making this determination, management concluded that the acquired assets did not meet the definition of a business. The Company paid purchase consideration of $ 222 million , inclusive of transaction costs of $ 2 million and customary purchase price adjustments. As part of this transaction, the Company assumed Oaktree’s proportionate debt of $ 133 million associated with the ABS VI Notes. The Company funded the purchase through a combination of existing and expanded liquidity and issued approximately $ 83 million in notes payable to Oaktree. Refer to Note 15 for additional information regarding debt . 2024 Divestitures During the year ended December 31, 2024 , the Company divested certain non-core undeveloped acreage across its operating footprint for consideration of approximately $ 59 million . 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 million . 2023 Acquisitions Tanos Energy Holdings II LLC (“Tanos II”) Asset Acquisition On March 1, 2023 the Company 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 Company paid purchase consideration of $ 262 million , inclusive of transaction costs of $ 1 million and customary purchase price adjustments. The Company 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 11 and 15 for additional information regarding the Company’s common stock and borrowings. 71 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company 2023 Divestitures Sale of Equity Interest in DP Lion Equity HoldCo LLC In November 2023, the Company 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 million and $ 20 million , respectively. In December 2023 , the Company divested 80 % of the equity ownership in DP Lion Equity Holdco LLC to outside investors, generating cash proceeds of $ 30 million . The Company evaluated the remaining 20 % interest in DP Lion Equity Holdco LLC and determined that the governance structure is such that the Company 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 Company’s financial statements. The consideration exceeded the fair value of the Company’s portion of the assets and liabilities divested resulting in a gain on sale of the equity interest of $ 11 million . The Company’s remaining investment in the LLC is accounted for by applying the measurement alternative under ASC 321, based on which the investment is recorded at cost less any impairment amount, if applicable. Other 2023 Divestitures On June 27, 2023 , the Company sold certain non-core, non-operated assets within its Central Region for consideration of approximately $ 38 million . The divested assets were located in Texas and Oklahoma and consisted of non-operated wells and the associated leasehold acreage that was acquired as part of the asset acquisition from ConocoPhillips in September 2022 . Additionally, during the year ended December 31, 2023 , the Company divested certain non-core undeveloped acreage across its operating footprint for net consideration of approximately $ 28 million . 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 $ 24 million . Note 4 - Income Tax The Company files a consolidated U.S. federal tax return, multiple state tax returns, and a separate UK tax return for Diversified Energy Company PLC, the former parent company, which will file its final tax return for 2025. Income taxes are provided for the tax effects of transactions reported in the Consolidated Financial Statements and consist of taxes currently due, plus deferred taxes related to differences between the basis of assets and liabilities for financial and income tax reporting. The effective tax rate for December 31, 2025 and 2024 were primarily influenced by the recognition of the federal marginal well tax credit available to qualified producers. The effective tax rate for December 31, 2023 was primarily impacted by changes in state taxes due to acquisitions and recurring permanent differences. For the years ended December 31, 2025 , 2024 , and 2023 , the Company reporte d tax benefit of $ 41 million , a benefit of $ 145 million , and an expense of $ 239 million , respectively. The effective tax rate fo r the year ended December 31, 2025 was ( 13.5 )% , compared to 58.4 % and 24.2 % for the years ended December 31, 2024 and 2023 , respectively. Marginal well tax credits are offered by the federal government to incentivize companies to maintain production from wells with lower output, especially during periods of subdued prices, ensuring the continuation of jobs and the generation of state and local taxes that fund schools, social programs, police, and other vital public services. Internal Revenue Code Section 45I outlines the criteria for these credits, which are designated for qualifying natural gas output from specific wells. Wells producing under 90 Mcfe daily benefit from these incentives when natural gas prices in the preceding tax year are comparatively low. The Company has received these credits due to its collection of conventional wells known for their longevity and slow production decline. These credits were available for 2025 and 2024 based on commodity pricing in the 2024 and 2023 calendar years, respectively, but were not available for 2023 based on commodity pricing in 2022. The Company utilizes these credits on a first in, first out basis. 72 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company The provision for income taxes in the Consolidated Statements of Comprehensive Income (Loss) is summarized below: For the Year Ended December 31, (in thousands) 2025 2024 2023 Current income tax benefit (expense) Federal benefit (expense) $ ( 2,822 ) $ 18,238 $ ( 7,289 ) State benefit (expense) ( 11,834 ) ( 1,122 ) ( 5,902 ) Foreign - UK benefit (expense) — ( 234 ) — Total current income tax benefit (expense) $ ( 14,656 ) $ 16,882 $ ( 13,191 ) Deferred income tax benefit (expense) Federal benefit (expense) $ 59,267 $ 118,897 $ ( 200,674 ) State benefit (expense) ( 4,061 ) 9,016 ( 25,460 ) Foreign - UK benefit (expense) — 50 141 Total deferred income tax benefit (expense) $ 55,206 $ 127,963 $ ( 225,993 ) Total income tax benefit (expense) $ 40,550 $ 144,845 $ ( 239,184 ) The effective tax rates and differences between the statutory U.S. federal income tax rate and the effective tax rates are summarized as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Income (loss) before taxation $ 301,349 $ ( 247,938 ) $ 989,573 Income tax benefit (expense) 40,550 144,845 ( 239,184 ) Effective tax rate ( 13.5 %) 58.4 % 24.2 % For the Year Ended December 31, (in thousands) 2025 2024 2023 U.S. federal statutory tax rates $ ( 63,283 ) 21.0 % $ 52,067 21.0 % $ ( 207,810 ) 21.0 % State and local income tax, net of federal (national) income tax effect ( 12,558 ) 4.2 % 9,201 3.7 % ( 29,698 ) 3.0 % Foreign tax effects Statutory tax rate difference between United Kingdom and United States ( 3,586 ) 1.2 % ( 3,109 ) ( 1.3 ) % ( 3,270 ) 0.3 % Equity in earnings of foreign subsidiary ( 18,825 ) 6.2 % ( 16,324 ) ( 6.6 ) % ( 27,241 ) 2.8 % Nontaxable dividend income 25,777 ( 8.6 ) % 21,681 8.7 % 32,357 ( 3.3 ) % Other foreign tax effects ( 2,408 ) 0.8 % ( 2,432 ) ( 1.0 ) % ( 1,705 ) 0.2 % Tax credits Marginal well credits 106,319 ( 35.3 ) % 91,831 37.0 % — — % Changes in valuation allowances — — % — — % 1,504 ( 0.2 ) % Nontaxable or nondeductible items Other nondeductible items ( 244 ) 0.1 % ( 906 ) ( 0.3 ) % ( 2,039 ) 0.3 % Other adjustments Other adjustments to deferred taxes 9,358 ( 3.1 ) % ( 7,164 ) ( 2.8 ) % ( 1,282 ) 0.1 % Income tax benefit (expense) / Effective tax rate (a) $ 40,550 ( 13.5 ) % $ 144,845 58.4 % $ ( 239,184 ) 24.2 % (a) The impact and the presentation of the federal tax credits on our effective tax rate can be positive or negative based on the Company’s annual pre-tax income or loss. The Company had a net deferred tax asset of $ 275 million at December 31, 2025 , comp ared to a net deferred tax asset of $ 263 million at December 31, 2024 . This change was primarily due to the recognition of marginal well credits. The balance sheet presentation considers the offsetting of deferred tax assets and liabilities within the same tax jurisdiction, where permitted. The overall deferred tax position in a particular tax jurisdiction determines if a deferred tax balance related to that jurisdiction is presented within deferred tax assets or liabilities. 73 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company State and local income taxes are more than 50% comprised of Oklahoma. The table below presents the components of the net deferred tax asset (liability) included in noncurrent assets (liabilities) as of the periods presented: As of December 31, (in thousands) December 31, 2025 December 31, 2024 Deferred tax asset Asset retirement obligations $ 210,931 $ 151,256 Derivatives 127,198 191,512 Allowance for doubtful accounts 4,782 4,099 Net operating loss carryover 27,470 4,425 Valuation allowance ( 5,025 ) — Federal tax credits carryover 331,532 233,969 Investment in partnerships 13,261 — 163(j) interest expense limitation 41,634 41,031 Other 16,270 — Total deferred tax asset $ 768,053 $ 626,292 Deferred tax liability Amortization and depreciation $ ( 482,345 ) $ ( 333,812 ) Investment in partnerships — ( 6,243 ) Other ( 10,473 ) ( 23,036 ) Total deferred tax liability $ ( 492,818 ) $ ( 363,091 ) Net deferred tax asset (liability) $ 275,235 $ 263,201 Balance sheet presentation Deferred tax asset $ 287,135 $ 271,212 Deferred tax liability ( 11,900 ) ( 8,011 ) Net deferred tax asset (liability) $ 275,235 $ 263,201 In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on generating future taxable income during the periods in which those temporary differences become deductible or before credits expire. The Company evaluates the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. At this time, the Company has determined it will have sufficient future taxable income to recognize its deferred tax assets . The Company’s deferred tax assets and liabilities all originate in the U.S. For U.S. federal tax purposes, the Company is taxed as a single consolidated entity. The Company’s co-investments with Oaktree and its investment in the Chesapeake Granite Wash Trust are taxed as partnerships that pass through to the Company’s consolidated return. The Company is also subject to additional taxes in its previously domiciled jurisdiction of the UK. For the years ended December 31, 2025 , 2024 , and 2023 , the Company incurred a expense of zero , $ 0.2 million , and zero in the UK, respectively. The Organization for Economic Cooperation and Development (“OECD”) has proposed model rules for a global minimum tax of 15% of reported profits (“Pillar Two”) that has been agreed upon in principle by over 140 countries. While the U.S. has not yet enacted rules implementing Pillar Two, the U.K. has. This is relevant to the Company as it is resident in the U.K. for corporation tax purposes. The Finance (No. 2) Act 2023 (the “UK Act”) was enacted on July 11, 2023, and implements the OECD’s Base Erosion & Profit Shifting (“BEPS”) Pillar Two Income Inclusion Rule and a ‘Qualifying Domestic Minimum Top-up Tax’ for accounting periods beginning on or after December 31, 2023. The UK Act also includes a transitional safe harbor election for accounting periods beginning on or before December 31, 2026. Although the Pillar Two rules can lead to additional taxes, including taxes on our profits in the U.S., the Company anticipates qualifying for a transitional safe harbor under the Pillar Two rules. We have undertaken an initial assessment, and evaluated the impact of these rules, and currently the Company believes it will not have a material impact on its financial position, results of operations, or cash flows due to the availability of a transitional safe harbor for the year ended December 31, 2025. The Company had no uncertain tax position liabilities as of December 31, 2025 , 2024 or 2023 . 74 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company As of December 31, 2025 , the Company had U.S. federal net operating loss carryforwards (“NOLs”) of approximately $ 105 million after any subject limitations. Additionally, the Company had $ 109 million U.S. state NOLs. The Company had U.S. marginal well tax credit carryforwards of approximately $ 332 million as of December 31, 2025 , compared to $ 234 million and $ 163 million as of December 31, 2024 and 2023 , respectively. As discussed earlier, marginal well tax credits are intended to benefit wells producing less than 90 Mcfe per day when market prices for natural gas are relatively low. Due to the low commodity price environment in 2024 , the Company generated federal tax credits of $ 106,319 for the year ended December 31, 2025 . These tax credits expire between 2040 and 2045 . The Company had no U.S. federal capital loss carryforwards as of December 31, 2025 , compared to $ 14 million and none as of December 31, 2024 and 2023 , respectively. For the year ended December 31, 2025 , no capital loss carryforwards expired. The Company utilized all existing capital loss carryforward in the amount of $ 14 million in 2025 . The Company completed a Section 382 study through December 31, 2025 in accordance with the Internal Revenue Code of 1986, as amended. The study concluded that the Company has not experienced an ownership change since the last ownership change on January 31, 2018. If the Company experiences an ownership change, tax credit carryforwards can be utilized but are limited each year and could expire before being fully utilized. The Company is subject to examination by the IRS for tax years 2022 through 2024. The table below presents the components of the Company’s cash paid for income taxes. For the Year Ended (in thousands) December 31, 2025 Cash paid (received) for income taxes, net of refunds Federal income taxes $ 926 State income taxes: Oklahoma 2,002 West Virginia 477 Other 74 State income taxes 2,553 Total cash paid (received) for income taxes, net of refunds $ 3,479 (a) Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 , we re $ 11 million and $ 8 million , respectively . Note 5 - Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period, excluding shares held in treasury (if any) and the Employee Benefit Trust (“EBT”). Diluted EPS reflects the potential dilution that could occur if share-based compensation awards were exercised or converted into shares, except when their effect would be anti-dilutive. Refer to Note 11 for additional information regarding the EBT. The following table presents the reconciliation of the numerators and denominators used in the calculation of basic and diluted EPS for the periods presented: For the Year Ended December 31, (in thousands, except share and per share data) 2025 2024 2023 Net income (loss) attributable to DEC $ 341,115 $ ( 104,365 ) $ 748,706 Weighted average shares outstanding - basic 72,969,687 48,031,916 47,165,380 Dilutive impact of potential shares 1,508,905 — 349,141 Weighted average shares outstanding - diluted 74,478,592 48,031,916 47,514,521 Basic earnings (loss) per share $ 4.67 $ ( 2.17 ) $ 15.87 Diluted earnings (loss) per share $ 4.58 $ ( 2.17 ) $ 15.76 Potentially dilutive shares (a) 85,106 640,568 54,133 75 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company (a) Share-based compensation awards excluded from the diluted EPS calculation because their effect would have been anti-dilutive . Note 6 - Natural Gas & Oil Properties The following table summarizes the Company's natural gas and oil properties for the periods presented: For the Year Ended December 31, (in thousands) 2025 2024 2023 Costs Beginning balance $ 3,814,936 $ 3,184,840 $ 3,062,847 Additions (a) 2,078,715 674,379 348,234 Disposals (b) ( 64,939 ) ( 44,283 ) ( 226,241 ) Ending balance $ 5,828,712 $ 3,814,936 $ 3,184,840 Depletion and impairment Beginning balance $ ( 981,715 ) $ ( 747,202 ) $ ( 530,385 ) Depletion expense ( 339,238 ) ( 234,513 ) ( 216,817 ) Ending balance $ ( 1,320,953 ) $ ( 981,715 ) $ ( 747,202 ) Net book value $ 4,507,759 $ 2,833,221 $ 2,437,638 (a) For the year ended December 31, 2025 , the Company added $ 1.9 billion from acquisitions. The remaining changes were primarily due to development and recurring capital expenditures. In 2024 , the Company added $ 608 million from acquisitions. The remaining changes were primarily due to recurring capital expenditures. In 2023 , the Company added $ 266 million from acquisitions. The remaining changes were primarily due to recurring capital expenditures. (b) For the year ended December 31, 2025 , the Company divested $ 65 million in undeveloped acreage. In 2024 , the Company divested $ 33 million in undeveloped acreage. In 2023 , the Company divested $ 203 million in natural gas and oil properties related to the sale of equity interest in DP Lion Equity Holdco LLC and other proved properties and undeveloped acreage divestitures. Refer to Note 3 for additional information regarding acquisitions and divestitures. Note 7 - Property, Plant & Equipment The following tables summarize the Company’s property, plant and equipment for the periods presented: For the Year Ended December 31, 2025 (in thousands) Buildings and Leasehold Improvements Equipment Motor Vehicles Midstream Assets Other Property and Equipment Total Costs Beginning balance $ 47,458 $ 32,803 $ 17,506 $ 471,671 $ 71,489 $ 640,927 Additions (a) 17,243 3,182 125 47,199 17,818 85,567 Disposals ( 65 ) ( 1,699 ) ( 2,390 ) ( 11,849 ) ( 8,639 ) ( 24,642 ) Ending balance $ 64,636 $ 34,286 $ 15,241 $ 507,021 $ 80,668 $ 701,852 Accumulated depreciation Beginning balance $ ( 4,232 ) $ ( 10,875 ) $ ( 11,600 ) $ ( 150,345 ) $ ( 38,112 ) $ ( 215,164 ) Period changes ( 1,308 ) ( 3,703 ) ( 7,785 ) ( 37,844 ) ( 11,192 ) ( 61,832 ) Disposals 61 1,578 7,483 10,979 1,065 21,166 Ending balance $ ( 5,479 ) $ ( 13,000 ) $ ( 11,902 ) $ ( 177,210 ) $ ( 48,239 ) $ ( 255,830 ) Net book value $ 59,157 $ 21,286 $ 3,339 $ 329,811 $ 32,429 $ 446,022 (a) Of the $ 86 million in additions for 2025 , $ 61 million was related to acquisitions. Refer to Note 3 for additional information regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and gathering systems, as well as vehicle and equipment additions. 76 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company For the Year Ended December 31, 2024 (in thousands) Buildings and Leasehold Improvements Equipment Motor Vehicles Midstream Assets Other Property and Equipment Total Costs Beginning balance $ 46,003 $ 33,314 $ 20,958 $ 449,200 $ 71,645 $ 621,120 Additions (a) 2,311 3,066 775 22,597 4,492 33,241 Disposals ( 856 ) ( 3,577 ) ( 4,227 ) ( 126 ) ( 4,648 ) ( 13,434 ) Ending balance $ 47,458 $ 32,803 $ 17,506 $ 471,671 $ 71,489 $ 640,927 Accumulated depreciation Beginning balance $ ( 3,196 ) $ ( 9,800 ) $ ( 11,517 ) $ ( 120,668 ) $ ( 33,795 ) $ ( 178,976 ) Period changes ( 1,100 ) ( 3,400 ) ( 2,902 ) ( 29,701 ) ( 8,965 ) ( 46,068 ) Disposals 64 2,325 2,819 24 4,648 9,880 Ending balance $ ( 4,232 ) $ ( 10,875 ) $ ( 11,600 ) $ ( 150,345 ) $ ( 38,112 ) $ ( 215,164 ) Net book value $ 43,226 $ 21,928 $ 5,906 $ 321,326 $ 33,377 $ 425,763 (a) Of the $ 33 million in additions for 2024 , $ 2 million was related to acquisitions. Refer to Note 3 for additional information regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and gathering systems, as well as vehicle and equipment additions. For the Year Ended December 31, 2023 (in thousands) Buildings and Leasehold Improvements Equipment Motor Vehicles Midstream Assets Other Property and Equipment Total Costs Beginning balance $ 45,876 $ 31,255 $ 25,661 $ 426,935 $ 61,905 $ 591,632 Additions (a) 688 4,156 408 22,265 12,035 39,552 Disposals ( 561 ) ( 2,097 ) ( 5,111 ) — ( 2,295 ) ( 10,064 ) Ending balance $ 46,003 $ 33,314 $ 20,958 $ 449,200 $ 71,645 $ 621,120 Accumulated depreciation Beginning balance $ ( 2,177 ) $ ( 7,980 ) $ ( 12,247 ) $ ( 92,404 ) $ ( 25,584 ) $ ( 140,392 ) Period changes ( 1,045 ) ( 3,749 ) ( 3,594 ) ( 28,264 ) ( 9,893 ) ( 46,545 ) Disposals 26 1,929 4,324 — 1,682 7,961 Ending balance $ ( 3,196 ) $ ( 9,800 ) $ ( 11,517 ) $ ( 120,668 ) $ ( 33,795 ) $ ( 178,976 ) Net book value $ 42,807 $ 23,514 $ 9,441 $ 328,532 $ 37,850 $ 442,144 (a) Of the $ 40 million in additions for 2023 , $ 0.2 million was related to acquisitions. Refer to Note 3 for additional information regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and gathering systems, as well as vehicle and equipment additions. The Company continued to utilize certain fully depreciated assets during the years ended December 31, 2025 , 2024 and 2023 with an original cost basis of $ 38 million , $ 29 million and $ 7 million , respectively. Note 8 - Derivatives The Company faces volatility in market prices and basis differentials for natural gas, NGLs and oil, affecting the predictability of its cash flows from commodity sales. Additionally, the Company’s cash flows related to interest payments on variable rate debt obligations can be impacted by fluctuations in interest rate markets, depending on its debt structure. To manage these risks, the Company enters into derivative contracts primarily with major financial institutions and energy trading counterparties. As of December 31, 2025 , these instruments included swaps, collars, basis swaps, and stand-alone put and call options. The Company does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment. Below is a description of these instruments: Swaps: When the Company sells a swap, it agrees to receive a fixed price for the contract while paying a floating market price to the counterparty; 77 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Collars: Arrangements that include a fixed floor price (purchased put option) and a fixed ceiling price (sold call option) based on an index price have no net costs overall. At the contract settlement date, (1) when the index price is higher than the ceiling price, the Company pays the counterparty the difference between the index price and ceiling price, (2) when the index price is between the floor and ceiling prices, no payments are due from either party, and (3) when the index price is below the floor price, the Company will receive the difference between the floor price and the index price. Some collar arrangements may also include a sold put option with a strike price below the purchased put option. Known as a three-way collar, the structure operates similarly to the standard collar. However, when the index price settles below the sold put option, the Company pays the counterparty the difference between the index price and sold put option, effectively enhancing realized pricing by the difference between the price of the sold and purchased put options; Basis swaps: Arrangements that guarantee a price differential for commodities from a specified delivery point. When the Company sells a basis swap, it receives a payment from the counterparty if the price differential exceeds the stated terms of the contract. Conversely, if the price differential is less than the stated terms, the Company pays the counterparty; Put options: The Company purchases and sells put options in exchange for a premium. When the Company purchases a put option, it receives from the counterparty the excess amount (if any) by which the market price falls below the strike price of the put option at the time of settlement. If the market price is above the put option’s strike price, no payment is required from either party. Conversely, when the Company sells a put option, it pays the counterparty the excess amount (if any) by which the market price falls below the strike price of the put option at the time of settlement. If the market price is above the put option’s strike price, no payment is required from either party; Call options: The Company purchases and sells call options in exchange for a premium. When the Company purchases a call option, it receives from the counterparty the excess amount (if any) by which the market price exceeds the strike price of the call option at the time of settlement. If the market price is below the call option’s strike price, no payment is required from either party. When the Company sells a call option, it pays the counterparty the excess amount (if any) by which the market price exceeds the strike price of the call option at the time of settlement. If the market price is below the call option’s strike price, no payment is required from either party; and The Company may elect to enter into offsetting transactions for the above instruments for the purpose of cancelling or terminating certain positions. 78 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company The following table summarizes the Company's calculated fair value of derivatives as of the reporting date: As of December 31, 2025 (in thousands, except volume data) Volume Fair Value Natural gas (Mmbtu) Swaps 1,053,935 $ ( 410,622 ) Two-way collars 141,311 22,465 Three-way collars 19,586 ( 3,383 ) Stand-alone calls (a) 78,227 ( 84,132 ) Basis swaps 577,288 ( 17,176 ) Purchased puts 7,978 2,170 Sold puts 16,537 ( 3,798 ) Total natural gas 1,894,862 $ ( 494,476 ) NGLs (MBbls) Swaps 21,829 $ 36,027 Stand-alone calls 913 ( 2,478 ) Total NGLs 22,742 $ 33,549 Oil (MBbls) Swaps 16,961 $ 101,759 Three-way collars 730 4,017 Sold calls 1,571 ( 6,613 ) Total oil 19,262 $ 99,163 Interest SOFR interest rate swap ( $ 5,520 principal hedged, 4.15 % fixed-rate) $ 90 Total interest $ 90 Total fair value of derivatives $ ( 361,674 ) (a) Includes f uture cash settlements for deferred premiums. Netting of derivative assets and liabilities is applied at each reporting date when a legal right of offset exists under a master netting arrangement. The Company elected to present these derivative assets and liabilities on a net basis when these conditions are satisfied. The following table outlines the Company’s net derivatives as of the periods presented: (in thousands) As of December 31, Derivatives Consolidated Statement of Financial Position 2025 2024 Assets: Current assets Derivatives 153,150 33,759 Noncurrent assets Other assets $ 81,702 $ 28,439 Total assets $ 234,852 $ 62,198 Liabilities Current liabilities Derivatives ( 155,959 ) ( 163,676 ) Noncurrent liabilities Derivatives $ ( 440,567 ) $ ( 608,869 ) Total liabilities $ ( 596,526 ) $ ( 772,545 ) Net assets (liabilities): Net assets (liabilities) - current Derivatives $ ( 2,809 ) $ ( 129,917 ) Net assets (liabilities) - noncurrent Other assets / Derivatives ( 358,865 ) ( 580,430 ) Total net assets (liabilities) $ ( 361,674 ) $ ( 710,347 ) 79 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company The Company presents the fair value of derivative contracts on a net basis in the Consolidated Statement of Financial Position. Below is the impact of this presentation on the Company’s recognized assets and liabilities for the specified periods: As of December 31, 2025 (in thousands) Presented without Effects of Netting Effects of Netting As Presented with Effects of Netting Current assets $ 173,771 $ ( 20,621 ) $ 153,150 Noncurrent assets 205,253 ( 123,551 ) 81,702 Total assets $ 379,024 $ ( 144,172 ) $ 234,852 Current liabilities ( 176,580 ) 20,621 ( 155,959 ) Noncurrent liabilities ( 564,118 ) 123,551 ( 440,567 ) Total liabilities $ ( 740,698 ) $ 144,172 $ ( 596,526 ) Total net assets (liabilities) $ ( 361,674 ) $ — $ ( 361,674 ) As of December 31, 2024 (in thousands) Presented without Effects of Netting Effects of Netting As Presented with Effects of Netting Current assets $ 77,801 $ ( 44,042 ) $ 33,759 Noncurrent assets 90,635 ( 62,196 ) 28,439 Total assets $ 168,436 $ ( 106,238 ) $ 62,198 Current liabilities ( 207,483 ) 43,807 ( 163,676 ) Noncurrent liabilities ( 671,300 ) 62,431 ( 608,869 ) Total liabilities $ ( 878,783 ) $ 106,238 $ ( 772,545 ) Total net assets (liabilities) $ ( 710,347 ) $ — $ ( 710,347 ) The Company recorded the following gains (losses) on derivatives in the Consolidated Statement of Operations for the specified periods: For the Year Ended December 31, (in thousands) 2025 2024 2023 Net gain (loss) on commodity derivatives settlements $ 23,709 $ 151,289 $ 178,064 Net gain (loss) on interest rate swaps 135 190 ( 2,722 ) Gain (loss) on foreign currency hedges — — ( 521 ) Total gain (loss) on settled derivatives (a) $ 23,844 $ 151,479 $ 174,821 Gain (loss) on fair value adjustments of unsettled derivatives (b) 193,843 ( 189,030 ) 905,695 Total gain (loss) on derivatives $ 217,687 $ ( 37,551 ) $ 1,080,516 (a) Represents the cash settlement of derivatives that were settled during the period. (b) Represents the change in fair value of derivatives, net of the carrying value of derivatives that were settled during the period. All derivatives are classified as Level 2 instruments under ASC 820, as their valuation relies on observable market inputs other than quoted prices. Commodity Derivative Contract Modifications and Extinguishments Occasionally, such as during the acquisition of producing assets, the completion of ABS financings, or in response to fluctuating price environments, the Company may strategically modify, offset, terminate, or expand certain existing hedge positions. These modifications can involve changes to the volume of production covered by contracts, the swap or strike price of specific derivative contracts, and other similar aspects of the derivative agreements. The Company manages distinct, long-dated derivative contract portfolios for its ABS financings and Term Loans. Additionally, the Company maintains a separate derivative contract portfolio for assets secured by the Credit Facility. These derivative contract portfolios associated with the Company’s ABS financings, Term Loans, and Credit Facility are presented in the Company’s Statement of Financial Position. 80 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company 2025 Modifications and Extinguishments In February 20 25, the Company adjusted portions of its commodity derivative portfolio across its legal entities for approximately $ 150 million in connection with the completion of the ABS X financing arrangement. The Company made further adjustments to its commodity derivative portfolio for approximately $ 21 million for the retirement of the ABS I and Term Loan I financing arrangements. The Company made no modifications in 2024. 2023 Modifications and Extinguishments In February 2023, the Company sold puts in ABS III for approximately $ 9 million and replaced them with swaps to maintain the appropriate level and composition of derivatives at both the legal entity and full-company level. In August 2023, the Company monetized $ 9 million in purchased puts associated with its ABS hedge books and transitioned the monetized positions into long-dated swap agreements. The Company also monetized an additional $ 8 million in net modifications, primarily comprised of swap terminations. As these modifications were made in the normal course of business for the year ended December 31, 2023, they are presented as an operating activity in the Consolidated Statement of Cash Flows. In November 2023, the Company adjusted portions of its commodity derivative portfolio across its legal entities to ensure that it maintained the appropriate level and composition at both the legal entity and full-Company level for the completion of the ABS VII financing arrangement. These portfolio adjustments included novations of certain contracts to the legal entities holding the ABS VII Notes. The Company paid $ 6 million for these portfolio adjustments. As these modifications were associated with a borrowing transaction, these amounts are presented as a financing activity in the Consolidated Statement of Cash Flows. Refer to Note 15 for additional information regarding ABS financing arrangements. Note 9 - Accounts Receivable Accounts receivable include amounts due from customers, entities that purchase the Company’s natural gas, NGLs and oil production, as well as amounts due from joint interest owners who hold a working interest in the properties operated by the Company. Most of these accounts receivable are current, and the Company is confident in their collectability. The table below provides a summary of the Company’s accounts receivable. The fair value approximates the carrying value as of the periods presented: As of December 31, (in thousands) 2025 2024 Commodity receivables (a) $ 315,561 $ 175,058 Other receivables (b) 128,565 75,322 Total accounts receivable $ 444,126 $ 250,380 Allowance for credit losses (c) ( 35,727 ) ( 15,959 ) Accounts receivable, net $ 408,399 $ 234,421 (a) Includes accrued revenues. (b) Predominantly comprised of joint interest owner r eceivables . (c) The allowance for credit losses mainly pertains to amounts owed by joint interest owners. During the year ended December 31, 2025 , the allowance for credit losses increased by $ 20 million , primarily due to acquired balances from the Maverick and Canvas acquisitions. 81 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Note 10 - Other Assets The following table includes details of other assets as of the periods presented: As of December 31, (in thousands) 2025 2024 Prepaid expenses and other current assets Prepaid expenses $ 9,365 $ 9,077 Inventory 27,801 9,591 Total prepaid expenses and other current assets $ 37,166 $ 18,668 Other noncurrent assets Intangibles $ 3,219 $ 2,902 Operating right of use assets 3,781 3,213 Financing right of use assets 63,990 32,843 Derivatives 81,702 28,439 Other noncurrent assets (a) 31,526 20,110 Total other noncurrent assets $ 184,218 $ 87,507 (a) Includes the Company’s investment in DP Lion Equity Holdco LLC of $ 10 million and $ 6 million as of December 31, 2025 and 2024 , respectively . Refer to Notes 3 and 15 for additional information regarding the DP Lion Equity Holdco LLC equity sale. Note 11 - Stockholders' Equity The Company is authorized to issue up to 350,000,000 shares of common stock, par value $ 0.01 per share. As of December 31, 2025 and 2024 , the Company had 76,979,625 and 50,649,844 s hares of common stock issued and outstanding. The Company is authorized to issue 30,000,000 shares of preferred stock, par value $ 0.01 per share. No preferred shares have been issued or are outstanding. In November 2025, the Company completed the U.S. Domestication, whereby existing shares of Diversified Energy Company PLC were exchanged on a one -for-one basis for newly issued shares of corresponding common stock of Diversified Energy Company, and all issued and outstanding equity awards of Diversified Energy Company PLC were assumed by Diversified Energy Company and were converted into rights to acquire Diversified Energy Company shares of common stock on the same terms. As a result of the U.S. Domestication, the par value of the Company’s common stock was changed from £ 0.20 to $ 0.01 . The impact of this change is reflected within U.S. Domestication in the Statements of Changes in Equity. Issuance of Common Stock In November 2025 , the Company issued 3,718,209 new shares of common stock direct to Canvas shareholders to fund a portion of the Canvas transaction. The total value of the stock consideration was $ 54 million based on the Company’s stock price on the NYSE on the closing date of the Canvas transaction. In March 2025 , the Company announced the completion of its previously announced acquisition of Maverick. The transaction was funded in part through the issuance of 21,194,213 new shares of common stock direct to the unitholders of Maverick. The total value of the stock consideration was $ 253 million , excluding transaction costs of $ 0.4 million , based on the Company’s NYSE stock price on the closing date of the Maverick transaction. In February 2025 , the Company issued 8,500,000 new shares of common stock at $ 14.50 per share to raise gross proceeds of $ 123 million , excluding transaction costs of $ 6 million . The Company used the net proceeds to repay a portion of the debt incurred in connection with the Maverick acquisition. In October 2024 , the Company issued 2,342,445 new shares of common stock direct to the Seller to fund a portion of the East Texas II transaction. The total value of the stock consideration was $ 27 million based on the Company’s NYSE stock price on the closing date of the East Texas II transaction. In August 2024 , the Company issued 2,249,650 new shares of common stock direct to Crescent Pass to fund a portion of the Crescent Pass transaction. The total value of the stock consideration was $ 28 million based on the Company’s NYSE stock price on the closing date of the Crescent Pass transaction. In February 2023 , the Company issued 6,422,200 new shares of common stock at $ 25.34 per share to raise gross proceeds of $ 163 million . Associated costs of the offering were $ 6 million . The Company used the proceeds to fund the Tanos II transaction. For further details related to acquisitions, refer to Note 3 . 82 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Treasury Stock The Company’s holdings in its own equity instruments are classified as treasury stock. The consideration paid, along with any directly attributable incremental costs, is deducted from the Company’s stockholders’ equity until the shares are either cancelled or reissued. No gain or loss is recognized in the Consolidated Statements of Comprehensive Income (Loss) upon the purchase, sale, issuance, or cancellation of treasury stock. Employee Benefit Trust (“EBT”) In March 2022 , the Company established the EBT to benefit its employees. The Company provides funding to the EBT to facilitate the acquisition of shares. These shares are held in the EBT to fulfill awards and grants under the Company’s 2017 and 2025 Equity Incentive Plans and the Employee Share Purchase Plan (the “ESPP”). Shares held in the EBT are treated in the same manner as treasury stock and are thus included in the Consolidated Financial Statements as treasury stock . During the years ended December 31, 2025 and 2024 , 1,657,000 and 418,151 shares were acquired by the EBT for approximately $ 23 million and $ 5 million , respectively . As of December 31, 2025 , the EBT held a total of 2,048,703 shares . For further details related to share-based compensation, refer to Note 12 . Stock Repurchase Program During the year ended December 31, 2025 , the Company repurchased 5,680,036 shares of common stock at an average price of $ 13.65 per share, amounting to a total of $ 78 million and representing 7 % of common stock issued and outstanding as of December 31, 2025 . During the year ended December 31, 2024 , the Company repurchased 1,219,879 shares of common stock at an average pri ce of $ 13.03 per share, amounting to a total of $ 16 million and representing 2 % of common stock issued and outstanding as of December 31, 2024 . During the year ended December 31, 2023 , the Company repurchased 646,762 shares of common stock at an average price of $ 17.08 per share, amounting to a total of $ 11 million and representing 1 % of common stock issued and outstanding as of December 31, 2023 . The Company has recorded the repurchase of these shares of common stock as a reduction in common stock and additional paid in capital . All repurchased shares of common stock were cancelled upon repurchase. As of December 31, 2025 and 2024 , the par value of the cancelled shares was retired from common stock in the Consolidated Balance Sheets . Dividends Dividends are declared at the discretion of the Board of Directors and are subject to applicable law and contractual restrictions. Dividends are paid to holders of record as of the record date. Dividends are waived on shares held in the EBT. In November 2024 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend was paid on March 31, 2025 to stockholders of record as of the close of business on February 28, 2025 . In April 2025 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend was paid on June 30, 2025 to stockholders of record as of the close of business on May 30, 2025 . In May 2025 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend was paid on September 30, 2025 to stockholders of record as of the close of business on August 29, 2025 . In August 2025 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend was paid on December 31, 2025 to stockholders of record as of the close of business on December 1, 2025 . In November 2025 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend is payable on March 31, 2026 , to stockholders on record as of the close of business on February 27, 2026 . The Company’s ability to pay dividends is subject to certain restrictions under its Credit Facility and other debt agreements, which may limit dividend payments based on leverage ratios and other financial covenants. Refer to Note 15 for additional information. Note 12 - Compensation Plans Equity Incentive Plans The 2017 Equity Incentive Plan (the “2017 Plan”), as amended through April 9, 2025, authorized and reserved for issuance up to 10 % of the Company’s shares of common stock outstanding, which may be issued upon exercise of vested options or the vesting of RSUs, PSUs and dividend equivalent units (“DEUs”) that were granted under the Plan. As of November 21, 2025 , 3,947,882 shares were subject to awards outstanding under the 2017 Plan. On November 21, 2025 , the Company adopted the 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan authorized and reserved for issuance a total of 6,892,551 shares of common stock, consisting of 2,944,669 shares of common stock plus the 3,947,882 shares of common stock subject to awards outstanding under the 2017 Plan as of November 21, 2025 that are not issued because such award is forfeit, canceled, terminates, expires or otherwise lapses, or is settled in cash or withheld by the Company in satisfaction of 83 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company the exercise price or tax withholding obligations . As of December 31, 2025 , there were 2,889,420 shares of common stock available for grant under the 2025 Plan . Upon adoption of the 2025 Plan, no new awards may be granted under the 2017 Plan, and any shares that were previously authorized and reserved for issuance under the 2017 Plan, but not subject to outstanding awards as of November 21, 2025 , are no longer available for grant. Only shares underlying outstanding awards under the 2017 Plan as of that date may be issued if and when those awards vest or are exercised. All future equity awards will be made exclusively under the 2025 Plan. Options Awards As of December 31, 2025 , 2024 and 2023 , the number of options outstanding had no aggregate intrinsic value. During the year ended December 31, 2023 , the weighted average exercise price at exercise was $ 29.86 . No options were exercised in the years ended December 31, 2025 and 2024 . As of December 31, 2025 , 2024 and 2023 , 139,794 , 153,631 and 162,108 Options were exercisable, respectively. As of December 31, 2025 , 2024 and 2023 , the weighted average remaining contractual life in years was 2.4 , 3.4 , and 4.6 , respectively. As of December 31, 2025 , the Company had no unrecognized share-based compensation expense related to stock options. RSU Awards The following table summarizes restricted stock unit (“RSU”) equity award activity for the respective period presented: Number of Shares Weighted Average Grant Date Fair Value per Share Balance as of December 31, 2024 976,222 $ 15.14 Granted 1,143,571 11.21 Vested ( 108,223 ) 28.68 Forfeited ( 40,663 ) 12.76 Balance as of December 31, 2025 1,970,907 $ 12.17 During the years ended December 31, 2025 , 2024 and 2023 , the aggregate intrinsic value at date of vesting was $ 1.3 million , $ 0.8 million , and $ 3.9 million , respectively . As of December 31, 2025 , the Company had $ 13 million of unrecognized share-based compensation expense related to RSUs that will be recognized over a weighted average period o f 1.7 years . RSUs can vest either on a cliff basis or ratably, depending on the service conditions. The fair value of the Company’s RSUs is calculated using the closing price of our common stock on the NYSE at the grant date. This value is then expensed uniformly over the vesting period. PSU Awards The following table summarizes performance-based restricted stock unit (“PSU”) equity award activity for the respective period presented: Number of Shares Weighted Average Grant Date Fair Value per Share Balance as of December 31, 2024 965,303 $ 15.41 Granted 536,884 8.45 Vested ( 174,897 ) 22.43 Forfeited ( 20,600 ) 10.96 Balance as of December 31, 2025 1,306,690 $ 11.68 During the years ended December 31, 2025 , 2024 and 2023 , the aggregate intrinsic value at date of vesting was $ 1.4 million , $ 0.4 million , and $ 4.9 million , respectively . As of December 31, 2025 , the Company had $ 5 million of unrecognized share-based compensation expense related to PSUs that will be recognized over a weighted average period of 1.4 years . PSUs are subject to cliff vesting based on specific performance criteria evaluated over a three -year period. These criteria include average adjusted return on equity over three years , measured against pre-established benchmarks. Additionally, the Company’s three - year TSR is compared to determined benchmarks and the TSR of a selected group of peer companies. Other performance metrics include the three -year average growth in free cash flow and the reduction in methane intensity over the same period. Depending on the achievement of these performance targets, the number of units that will vest can vary from 0 % to 100 % of the initial award. 84 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company The fair value of the Company’s PSUs is determined using a Monte Carlo simulation model as of the grant date. This calculated fair value is then expensed uniformly over the vesting period. F or PSUs granted during the respective periods presented, the inputs to the Monte Carlo model included the following: For the Year Ended December 31, 2025 2024 2023 Risk-free rate of interest 3.8 % 4.0 % 3.3 % Volatility (a) 42 % 38 % 31 % Correlation with comparator group range 0.14 - 0.33 0.02 - 0.32 0.01 - 0.30 (a) Volatility utilizes the historical volatility for the Company’s share price. Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “ESPP”), implemented in February 2023, authorized and reserved for issuance 300,000 shares of common stock. During the year ended December 31, 2025 , 40,932 shares were purchased by and issued to ESPP participants. During the year ended December 31, 2024 , 41,330 shares were purchased by and issued to ESPP participants. As of December 31, 2025 , 202,606 shares remain available to be purchased. As of December 31, 2025 , the Company had no unrecognized share -based compensation expense related to the ESPP. Share-Based Compensation Expense The following table presents the share-based compensation expense for the respective periods presented: For the Year Ended December 31, (in thousands) 2025 2024 2023 Options $ — $ 49 $ 292 RSUs 6,665 4,359 2,833 PSUs 3,676 3,827 3,335 ESPP 57 51 34 Total share-based compensation expense $ 10,398 $ 8,286 $ 6,494 Defined Contribution Plans The Company has two defined contribution plans (“401(k) Plans”) that are subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Both 401(k) Plans allows eligible employees to contribute up to 100 % of their base salaries, up to the contribution limits established under the Internal Revenue Code (“IRC”). Employee Savings Plan The Company makes a safe-harbor matching contribution equal to 100 % of salary deferrals that do not exceed 7 % of compensation. The Company’s matching contributions to this 401(k) Plan for the years ended December 31, 2025 , 2024 , and 2023 were $ 9.5 million , $ 7.9 million , and $ 7.2 million , respectively. Employee Retirement Plan The Company makes a non-elective safe-harbor contribution equal to 5 % of compensation. In addition, the Company matches 50 % of employee contributions up to the first 4 % of compensation. The Company’s safe-harbor non-elective contributions to this 401(k) Plan for the years ended December 31, 2025 , 2024 , and 2023 were $ 0.8 million , $ 0.8 million , and $ 0.7 million , respectively. The Company’s matching contributions to this 401(k) Plan for the years ended December 31, 2025 , 2024 , and 2023 were each $ 0.3 million . Note 13 - Asset Retirement Obligations The Company records a liability for the present value of the estimated future decommissioning costs associated with its natural gas and oil properties. Additionally, the Company records a liability for the future decommissioning costs of its production facilities and pipelines when required by contract, statute, or constructive obligation. For the years ended December 31, 2025 , 2024 and 2023 , no state contractual agreements or statutes related to production facilities and pipelines are expected to impose material obligations on the Company. In estimating the present value of future decommissioning costs for its natural gas and oil properties, the Company considers several factors, including the number and state jurisdictions of wells, current decommissioning costs by state and well type, and the 85 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Company’s retirement plan, which is based on state requirements and the Company’s capacity to retire wells over their productive lives. The Company’s assumptions are grounded in the current economic environment and are believed to provide a reasonable basis for estimating the future liability. However, actual decommissioning costs will ultimately depend on future market prices at the time the decommissioning services are performed. Additionally, the timing of decommissioning will vary based on when the fields cease to produce economically, which is influenced by future natural gas and oil prices and the retirement schedule. These factors are inherently uncertain. The Company incorporates annual inflationary cost increases into its current cost expectations and then discounts the resulting cash flows using a credit-adjusted risk-free discount rate . The components of the change in our asset retirement obligations are detailed below for the periods presented: For the Year Ended December 31, (in thousands) 2025 2024 2023 Balance at beginning of period $ 625,621 $ 468,843 $ 446,262 Additions (a) 195,923 105,614 3,192 Accretion expense 48,607 28,464 23,903 Asset retirement costs ( 23,015 ) ( 7,626 ) ( 5,330 ) Disposals (b) — — ( 10,275 ) Revisions (c) 41,562 30,326 11,091 Balance at end of period $ 888,698 $ 625,621 $ 468,843 Less: Current asset retirement obligations (d) 24,857 6,436 5,402 Noncurrent asset retirement obligations $ 863,841 $ 619,185 $ 463,441 (a) During the year ended December 31, 2025 , $ 180 million and $ 11 million o f additions relate to the Maverick and Canvas acquisitions, respectively. During the year ended December 31, 2024 , $ 64 million and $ 34 million of additions relate to the Oaktree and Crescent Pass acquisitions, respectively. For further details regarding acquisitions, refer to Note 3 . (b) Disposals are related to the divestiture of natural gas and oil properties. For additional information, refer to Note 6 . (c) Revisions primarily represent changes in the present value of liabilities resulting from changes in estimated costs and economic lives of producing properties. (d) The increase in current asset retirement obligations is primarily due to an increase in the number of wells expected to be plugged in the near term. Note 14 - Leases The Company leases office space, vehicles, and equipment under non-cancelable operating and finance leases. Lease terms generally range fro m one to six years and may include renewal or termination options. The Company does not have any material subleases, purchase options, or residual value guarantees. The Company recognizes right-of-use (“ROU”) assets and lease liabilities on the Consolidated Balance Sheets for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized. Short-term lease costs represent the expense recognized for leases where the company has elected the short-term lease exemption under ASC 842. This exemption allows the Company to expense, rather than capitalize, leases with a term of 12 months or less. The Company’s short-term leases are primarily associated with compressor rentals and have been included in the Company’s operating expenses, with a significant portion allocated to LOE. The components of lease costs and other information related to leases were as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Operating lease costs $ 3,946 $ 1,990 $ 1,814 Finance lease costs Amortization of the ROU assets 16,883 11,088 9,293 Interest expense on the lease liabilities 3,887 2,547 1,568 Short-term lease costs 46,346 31,129 30,024 Total lease costs $ 71,062 $ 46,754 $ 42,699 86 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Maturities of the Company’s lease liabilities were as follows as of December 31, 2025 : (in thousands) 2026 2027 2028 2029 2030 Thereafter Total Future Lease Payments Less: Imputed Interest Total Lease Liabilities Operating Leases $ 2,191 $ 680 $ 337 $ 344 $ 351 $ 298 $ 4,201 $ 459 $ 3,742 Finance Leases 26,560 22,135 17,354 11,922 4,497 272 82,740 10,778 71,962 Operating Leases Finance Leases Weighted average lease term (years) 3.0 3.7 Weighted average discount rate 6.6 % 7.2 % The Company determines the lease term as the non-cancelable period plus any renewal options reasonably certain to be exercised. The discount rate used to measure lease liabilities is the rate implicit in the lease, if readily determinable. Otherwise, the Company uses its incremental borrowing rate at the lease commencement date. For additional information regarding cash paid for lease liabilities and non-cash right-of-use asset additions, refer to the Supplemental Cash Flow Information in Note 20 . Note 15 - Borrowings The Company’s borrowings consist of the following amounts (in thousands) as of the reporting periods presented: As of December 31, Instrument Interest Rate 2025 2024 Credit Facility 7.04 % and 8.63 % respectively) (a) $ 485,400 $ 284,400 Term Loan I, due May 2030 6.50 % — 88,948 Term Loan II, due August 2027 8.83 % (a) — 83,851 ABS I Note, due January 2037 5.00 % — 80,157 ABS II Notes, due July 2037 5.25 % — 102,431 ABS IV Notes, due February 2037 4.95 % 64,560 79,653 ABS VI Notes, due November 2039 7.50 % (b) 191,651 242,010 ABS VIII Notes, due May 2044 7.28 % 546,340 585,747 ABS IX Notes, due September 2044 6.89 % 67,177 75,316 ABS X Notes, due February 2045 7.07 % 488,369 — ABS XI Notes, due November 2045 6.61 % 400,000 — ABS Maverick Notes, due December 2038 9.10 % 412,244 — Nordic Bonds, due April 2029 9.75 % 300,000 — Other miscellaneous borrowings (c) 29,504 113,060 Total borrowings $ 2,985,245 $ 1,735,573 Less: Current portion of long-term debt ( 236,553 ) ( 209,463 ) Less: Deferred financing costs ( 31,616 ) ( 22,426 ) Plus: Market premiums 8,133 — Less: Original issue discounts ( 9,748 ) ( 8,216 ) Total noncurrent borrowings, net $ 2,715,461 $ 1,495,468 (a) Represents the variable interest rate as of period end. (b) Includes $ 133 million for the assumption of Oaktree’s proportionate share of the ABS VI debt as part of the Oaktree transaction as of December 31, 2024 . Refer to Note 3 for additional information regarding the Oaktree transaction. (c) Includes $ 76 million in notes payable issued as part of the consideration in the Oaktree transaction as of December 31, 2024. Includes $ 23 million and $ 30 million in notes payable issued by a third party financial institution in November 2024 , collateralized by two natural gas processing plants and various natural gas compressors and related support equipment in the Central Region, as of December 31, 2025 and 2024 , respectively . Refer to Note 3 for additional information regarding the Oaktree acquisition. 87 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Credit Facility The Company maintains a Credit Facility with a lending syndicate, the borrowing base for which is redetermined semi-annually or as needed. The Company’s wholly owned subsidiary, DP RBL Co LLC, serves as the borrower under the Credit Facility. The borrowing base is primarily determined by the value of the natural gas and oil properties that serve as collateral for the lending arrangement, and it may fluctuate due to changes in collateral, which can result from acquisitions or the establishment of ABS, term loans, or other lending structures. In March 2025 , in connection with the close of the Maverick acquisition, the Company amended and restated the credit agreement governing its Credit Facility. The amendment and restatement 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 in the Maverick acquisition. The Company 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. Refer to Note 3 for additional information regarding acquisitions . During the semi-annual redetermination in October 2025 , the borrowing base was reduced to $ 825 million . The Credit Facility has an interest rate of SOFR plus an additional spread ranging from 2.75 % to 3.75 % based on utilization . Interest payments on the Credit Facility are paid on a quarterly basis. Available borrowings under the Credit Facility were $ 305 million as of December 31, 2025 , which considers the impact of $ 35 million in letters of credit issued to certain vendors. Term Loan I In May 2020 , the Company acquired DP Bluegrass LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to facilitate a securitized financing agreement for $ 160 million , structured as a secured term loan (the “Term Loan I”). The Company issued Term Loan I at a 1 % discount, resulting in net proceeds of $ 158 million , which were used to fund the 2020 Carbon and EQT acquisitions. Term Loan I is secured by certain producing assets acquired in connection with these acquisitions. Term Loan I accrued interest at an annual rate of 6.50 % and had a maturity date of May 2030 . Both interest and principal payments on Term Loan I were made on a monthly basis. In February 2025 , Term Loan I was repaid and retired from the Company’s outstanding debt. Term Loan II In August 2024 , the Company formed DP Yellow Jacket Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary to enter into a securitized financing agreement for a $ 60 million term loan and a $ 5 million revolving loan for a total borrowing base of $ 65 million (the “Term Loan II”). The proceeds from Term Loan II were used, in part, to fund the Crescent Pass acquisition. For additional information regarding acquisitions, refer to Note 3 . In October 2024 , the Company amended the Term Loan II and expanded the term loan to $ 83 million and the revolving loan to $ 12 million for a total borrowing base of $ 95 million . This amendment was accounted for as an extinguishment, which resulted in a loss of $ 2 million , recorded in loss on early retirement of debt in the Consolidated Statements of Comprehensive Income (Loss) . The expanded borrowing capacity was used to fund a portion of the East Texas II acquisition, and the acquired assets additionally collateralized the expanded Term Loan II. The Term Loan II was secured by the Crescent Pass and East Texas II assets and carried an interest at SOFR plus an additional spread ranging from 3.75 % to 4.75 % and was payable quarterly. The term loan was subject to fixed amortization with monthly principal payments of $ 0.5 million beginning in February 2025 and escalating to $ 1 million beginning in July 2025 with the remaining unpaid principal balance due upon maturity in August 2027 . The Term Loan II was to be prepaid if the Company received cash in connection with an issuance of equity interest or ABS monetization. In March 2025, the Term Loan II was repaid and retired from the Company’s outstanding debt. ABS I Notes In November 2019 , the Company formed Diversified ABS LLC (“ABS I”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue BBB- rated asset-backed securities with a total principal amount of $ 200 million at par (the “ABS I Notes”). The ABS I Notes were secured by specific upstream producing assets in the Appalachian Region owned by the Company. At the time of the agreement, 85 % of the natural gas production from these assets was hedged through long-term derivative contracts. The ABS I Notes carried an annual interest rate of 5 % and had a legal final maturity date of January 2037 , with an amortizing maturity date of December 2029 . Both interest and principal payments on the ABS I Notes were made on a monthly basis. In February 2025 , the ABS I Notes were repaid and retired from the Company’s outstanding debt. 88 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company ABS II Notes In April 2020 , the Company formed Diversified ABS Phase II LLC (“ABS II”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue BBB- rated asset-backed securities with a total principal amount of $ 200 million (the “ABS II Notes”). The ABS II Notes were issued at a 2.775 % discount. The Company used the net proceeds of $ 184 million , net of discount, capital reserve requirement, and debt issuance costs, to reduce the outstanding balance on its Credit Facility. The ABS II Notes were secured by specific upstream producing assets in the Appalachian Region owned by the Company. At the time of the agreement, 85 % of the natural gas production from these assets was hedged through long-term derivative contracts. The ABS II Notes carried an annual interest rate of 5.25 % and had a legal final maturity date of July 2037 , with an amortizing maturity date of September 2028 . Both interest and principal payments on the ABS II Notes were made on a monthly basis. In February 2025 , the ABS II Notes were repaid and retired from the Company’s outstanding debt. ABS III Notes In February 2022 , the Company formed Diversified ABS III LLC (“ABS III”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $ 365 million at par (the “ABS III Notes”). The ABS III Notes were secured by certain upstream producing and midstream assets in the Appalachian Region owned by the Company. The ABS III Notes carried an interest rate of 4.875 % and had a legal final maturity date of April 2039 , with an amortizing maturity date of November 2030 . Both interest and principal payments on the ABS III Notes were made on a monthly basis. In May 2025, the ABS III Notes were repaid and retired from the Company’s outstanding debt. ABS IV Notes In February 2022 , the Company formed Diversified ABS IV LLC (“ABS IV”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $ 160 million at par (the “ABS IV Notes”). The ABS IV Notes are secured by a portion of the upstream producing assets acquired through the Blackbeard acquisition. The ABS IV Notes carry an annual interest rate of 4.95 % and have a legal final maturity date of February 2037 , with an amortizing maturity date of September 2030 . Both i nterest and principal payments on the ABS IV Notes are made on a monthly basis. ABS V Notes In May 2022 , the Company formed Diversified ABS V LLC (“ABS V”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $ 445 million at par value (the “ABS V Notes”). The ABS V Notes were secured by a majority of the Company’s remaining upstream assets in the Appalachian Region that were not included in previous ABS transactions. The ABS V Notes carried an annual interest rate of 5.78 % and had a legal final maturity date of May 2039 , with an amortizing maturity date of December 2030 . Both interest and principal payments on the ABS V Notes were made on a monthly basis. In May 2025, the ABS V Notes were repaid and retired from the Company’s outstanding debt. ABS VI Notes In October 2022 , the Company formed Diversified ABS VI LLC (“ABS VI”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue, jointly with Oaktree, BBB+ rated asset-backed securities with a total principal amount of $ 460 million . The Company’s share amounted to $ 236 million before fees, reflecting its 51.25 % ownership interest in the collateral assets (the “ABS VI Notes”). The ABS VI Notes were issued at a 2.63 % discount and are primarily secured by the upstream assets jointly acquired with Oaktree in the Tapstone acquisition. The Company recorded its proportionate share of the ABS VI Notes in its Consolidated Balance Sheets . In June, 2024 , as part of the Oaktree acquisition, the Company assumed Oaktree’s proportionate debt of $ 133 million associated with the ABS VI Notes. For additional details regarding the Oaktree transaction, refer to Note 3 . The ABS VI Notes carry an annual interest rate of 7.50 % and have a legal final maturity date of November 2039 , with an amortizing maturity date of October 2031 . Both interest and principal payments on the ABS VI Notes are made on a monthly basis. ABS VII Notes In November 2023, the Company formed DP Lion Equity Holdco LLC (“ABS VII”), a limited-purpose, bankruptcy-remote, wholly- owned subsidiary, to issue Class A and Class B asset-backed securities (the “Class A Notes,” Class B Notes,” and collectively the “ABS VII Notes”). These notes are secured by certain upstream producing assets in the Appalachia Region. The Class A Notes, rated BBB+ , were issued with a total principal amount of $ 142 million , while the Class B Notes, rated BB- , were issued with a total principal amount of $ 20 million . The Class A Notes carry an annual interest rate of 8.243 % and have a legal final maturity date of November 2043 , with an amortizing maturity date of February 2034 . The Class B Notes carry an annual interest rate of 12.725 % and have a legal final maturity date of November 2043 , with an amortizing maturity date of August 2032 . Both interest and principal payments on the Class A and Class B Notes are made on a monthly basis. 89 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company In December 2023 , the Company divested 80 % of the equity ownership in ABS VII to outside investors, generating cash proceeds of $ 30 million . Upon evaluating the remaining 20 % interest in ABS VII , the Company determined that the governance structure does not allow it to exercise control, joint control, or significant influence over the entity. Consequently, ABS VII is not consolidated within the Company’s financial statements. The Company’s remaining investment in ABS VII, initially valued at $ 8 million was accounted for at fair value in accordance with ASC 321, Investments – Equity Securities , with changes in fair value recognized in net income . ABS VIII Notes In May 2024 , the Company formed Diversified ABS VIII LLC (“ABS VIII”), a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to issue Class A-1 and Class A-2 asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” and collectively the “ABS VIII Notes”). The Class A-1 Notes, rated A , were issued with a total principal amount of $ 400 million , while the Class A-2 Notes, rated BBB+ , were issued with a total principal amount of $ 210 million . The proceeds from these issuances were used to repay the outstanding principal of the ABS III & ABS V notes, effectively retiring those notes from the Company’s outstanding debt. Consequently, ABS III and ABS V were dissolved. The ABS VIII Notes are secured by the collateral that previously secured the ABS III and ABS V notes, which includes certain upstream producing and midstream assets in the Appalachian Region owned by the Company, and the remaining upstream assets in the Appalachian Region that were not securitized by previous ABS transactions. The Class A-1 Notes carry an annual interest rate of 7.076 % , while the Class A-2 Notes carry an annual interest rate of 7.670 % . These notes have a legal final maturity date of May 2044 , with an amortizing maturity date of March 2033 . Both i nterest and principal payments on the ABS VIII Notes are made on a monthly basis. ABS IX Notes In June 2024 , the Company formed DP Mustang Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS IX,” formerly “ABS Facility Warehouse”), to secure a bridge loan facility (the “ABS Facility Warehouse Notes”). The initial draw on the ABS Facility Warehouse Notes amounted to $ 71 million , which included $ 66 million in net proceeds, $ 3 million in restricted cash interest reserve, and $ 2 million in debt issuance costs. The ABS Facility Warehouse Notes were secured by certain producing assets that previously collateralized the Credit Facility. It carried an interest rate of SOFR plus an additional 3.75 % and had a legal final maturity date of May 2029 . Both i nterest and principal payments on the ABS Facility Warehouse Notes were made on a monthly basis. In September 2024 , the Company issued Class A and Class B asset-backed securities (the “Class A Notes,” “Class B Notes,” and collectively the “ABS IX Notes”) with a total principal amount of $ 77 million . The Class A Notes were issued with a total principal amount of $ 71 million , while the Class B Notes were issued with a total principal amount of $ 6 million . The proceeds from these issuances were used to repay the outstanding principal of the ABS Facility Warehouse Notes, effectively retiring it from the Company’s outstanding debt and resulting in a loss on the early retirement of debt amounting to $ 2 million . The Class A Notes carry an annual interest rate of 6.555 % and have an amortizing maturity date of December 2034 . The Class B Notes carry an annual interest rate of 11.235 % and have an amortizing maturity date of September 2030 . Both interest and principal payments on the ABS IX Notes are made on a monthly basis. ABS X Notes In February 2025, the Company formed Diversified ABS Phase X LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS X”), to issue Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” “Class B Notes,” and collectively the “ABS X Notes”) with a total principal amount of $ 530 million . The Class A-1 Notes, rated A-, were issued with a total principal amount of $ 200 million . The Class A-2 Notes, rated BBB, were issued with a total principal amount of $ 240 million . The Class B Notes, rated BB-, were issued with a total principal amount of $ 90 million . The proceeds from these issuances were used to repay the outstanding principal of the ABS I Notes, ABS II Notes, and Term Loan I, effectively retiring those notes from the Company’s outstanding debt. The ABS X Notes are secured by certain upstream producing assets in the Appalachian Region owned by the Company, including those that previously collateralized the ABS I Notes, ABS II Notes, and Term Loan I. Excess proceeds from the issuance of the Notes were used to fund the Summit acquisition and for general corporate purposes. Refer to Note 4 for additional information regarding acquisitions. The Class A-1 Notes carry an annual interest rate of 5.945 % . The Class A-2 Notes carry an annual interest rate of 6.751 % . The Class B Notes carry an annual interest rate of 10.398 % . These notes have a legal final maturity date of February 2045. Both interest and principal payments on the ABS X Notes are made on a monthly basis. ABS Maverick Notes In February 2025, the Company formed Maverick ABS Holdings LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS Maverick”), to hold the Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” “Class B Notes,” and collectively the “ABS Maverick Notes”) assumed as part of the Maverick acquisition. These Notes had a total principal amount of $ 640 million upon issuance. The Class A-1 Notes, rated A-, were issued with a total principal amount of $ 285 million . The Class A-2 Notes, rated BBB+, were issued with a total principal amount of $ 260 million . The Class B Notes, 90 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company rated BB-, were issued with a total principal amount of $ 95 million . Upon acquisition, the ABS Maverick Notes carried a 1.6 % market premium and are secured by certain upstream producing assets in the Western Anadarko Basin acquired in the Maverick acquisition. Refer to Note 4 for additional information regarding acquisitions. The Class A-1 Notes carry an annual interest rate of 8.121 % . The Class A-2 Notes carry an annual interest rate of 8.946 % . The Class B Notes carry an annual interest rate of 12.436 % . These notes have a legal final maturity date of December 2038. Both interest and principal payments on the ABS Maverick Notes are made on a monthly basis. ABS XI Notes In November 2025, the Company formed DP Keeneland Mile LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS XI”), to issue Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” “Class B Notes,” and collectively the “ABS XI Notes”) with a total principal amount of $ 400 million . The Class A-1 Notes were issued with a total principal amount of $ 247 million . The Class A-2 Notes were issued with a total principal amount of $ 91 million . The Class B Notes were issued with a total principal amount of $ 62 million . The proceeds from this issuance were used to fund, in part, the Canvas acquisition and are secured by certain upstream producing assets acquired. The Class A-1 Notes carry an annual interest rate of 5.757 % . The Class A-2 Notes carry an annual interest rate of 6.547 % . The Class B Notes carry an annual interest rate of 10.129 % . These notes have a legal final maturity date of November 2045. Both interest and principal payments on the ABS XI Notes are made on a monthly basis. Nordic Bonds In April 2025, the Company issued the Nordic Bonds, consisting of $ 300 million of new senior secured notes in the Nordic bond market at a 2 % discount, resulting in net proceeds of $ 294 million . The proceeds were used to repay existing indebtedness and for general corporate purposes. The Nordic Bonds mature in April 2029 and bear interest at a fixed rate of 9.75 % per annum, payable semi-annually in arrears. The Bonds are guaranteed by the Company and secured by (i) all of the Company’s U.S. bank accounts, (ii) the equity interests in Diversified Gas and Oil Company (“DGOC”) as well as DGOC’s equity interests in its direct operating subsidiaries and (iii) interests in certain intercompany loans. The Nordic Bonds contain the following financial covenants (i) the leverage ratio shall not exceed 3.5 x, (ii) the asset coverage ratio shall not be less than 1.20 to 1.00, (iii) book equity shall not be less than $ 500 million , and (iv) liquidity shall not be less than 25 % of the outstanding bonds. The Nordic Bonds were listed for trading on the Oslo Stock Exchange in October 2025. Oaktree Seller’s Notes In June 2024 , the Company partially funded the purchase price of the Oaktree acquisition with deferred consideration in the form of an unsecured seller’s note from Oaktree (the “Oaktree Seller’s Note”). The Company issued $ 83 million in notes at an annual interest rate of 8 % , with a legal final maturity date of December 2025 . Deferred interest and principal payments were scheduled in three installments: December 2024, June 2025, and December 2025. In October 2024 , the Company modified the terms of the Oaktree Seller’s Note, increasing the rate to 9 % , extending the maturity date to September 2026 , and changing the payment schedule to monthly interest and principal payments. In April 2025, the Company used proceeds from the Nordic Bonds to repay the outstanding principal of the Oaktree Seller’s Note, thereby retiring the notes from the Company’s outstanding debt. For additional information regarding the Oaktree transaction, refer to Note 3 . Early Retirement of Debt In February 2025, the Company used proceeds from the ABS X Notes to repay the outstanding principal of the ABS I & II notes and Term Loan I, thereby retiring the ABS I & II notes and Term Loan I from the Company’s outstanding debt and resulting in a loss on the early retirement of debt of $ 27 million . Concurrently, Diversified ABS Holdings LLC, Diversified ABS Phase II Holdings LLC, and DP Bluegrass Holdings LLC were dissolved. The ABS X Notes are secured by the collateral previously securing the ABS I & II notes, along with a portion of the collateral previously securing Term Loan I. In March 2025, the Company used proceeds from the upsized borrowing base on the amended and restated credit agreement governing the Credit Facility to repay the outstanding principal on Term Loan II, thereby retiring Term Loan II from the Company’s outstanding debt and resulting in a loss on the early retirement of debt of $ 0.2 million . In May 2024 , the Company utilized proceeds from the ABS VIII Notes to repay the outstanding principal of the ABS III & ABS V notes, thereby retiring these notes from the Company’s outstanding debt. The transaction resulted in a loss on the early retirement of debt amounting to $ 11 million . Concurrently, ABS III and ABS V were dissolved. The ABS VIII Notes are secured by the collateral that previously secured the ABS III & ABS V notes. 91 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Debt Covenants Credit Facility The Credit Facility contains certain customary representations and warranties and affirmative and negative covenants, including covenants relating to: maintenance of books and records; financial reporting and notification; compliance with laws; maintenance of properties and insurance; and limitations on incurrence of indebtedness, liens, fundamental changes, international operations, asset sales, making certain debt payments and amendments, restrictive agreements, investments, restricted payments and hedging. The restricted payment provision governs the Company’s ability to make discretionary payments such as dividends, share repurchases, or other discretionary payments. DP RBL Co LLC must comply with the following restricted payments test in order to make discretionary payments (i) leverage is less than 1.5 x and borrowing base availability is > 20 % , or (ii) leverage is between 1.5 x and 2.0 x, free cash flow must be positive, and borrowing base availability must be > 20 % ; and (iii) when leverage exceeds 2.0 x , restricted payments are prohibited. Additional covenants require DP RBL Co LLC to maintain a ratio of total debt to EBITDAX of not more than 3.25 to 1.00 and a ratio of current assets (with certain adjustments) to current liabilities of not less than 1.00 to 1.00 as of the last day of each fiscal quarter. As of December 31, 2025 , the Company was in compliance with all covenants for its Credit Facility. ABS IV, VI, VIII, IX, X, XI, and Maverick Notes (Collectively, the “ABS Notes”) and the Nordic Bonds The ABS Notes and Nordic Bonds are governed by a series of covenants and restrictions typical for such transactions, including (i) the requirement for the issuer to maintain specified reserve accounts to ensure the payment of interest on the ABS Notes and Nordic Bond, (ii) provisions for optional and mandatory prepayments, specified make-whole payments under certain conditions, (iii) indemnification payments in the event that the assets pledged as collateral for the ABS Notes and Nordic Bond are found to be defective or ineffective, (iv) covenants related to recordkeeping, access to information and similar matters, and (v) compliance with all applicable laws and regulations, including the Employee Retirement Income Security Act (“ERISA”), environmental laws, and the USA Patriot Act (ABS IV only). The ABS Notes and Nordic Bonds are also subject to customary accelerated amortization events as outlined in the indenture. These events include failure to maintain specified debt service coverage ratios, failure to meet certain production metrics, certain change of control and management termination events, and the failure to repay or refinance the ABS Notes and Nordic Bond on the applicable scheduled maturity date. Additionally, the ABS Notes and Nordic Bonds are subject to customary events of default, which include non-payment of required interest, principal, or other amounts due, failure to comply with covenants within specified time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. As of December 31, 2025 the Company was in compliance with all covenants related to the ABS Notes and Nordic Bonds. Future Maturities The table below represents the Company’s future maturities of its total borrowings as of December 31, 2025 , excluding deferred financing costs, premiums, and discounts: (in thousands) 2026 2027 2028 2029 2030 Thereafter Total debt Debt maturity $ 236,553 $ 217,426 $ 197,691 $ 969,696 $ 253,467 $ 1,110,412 $ 2,985,245 Interest Expense The table details the Company’s interest expense for each of the periods presented: For the Year Ended December 31, (In thousands) 2025 2024 2023 Interest incurred Borrowings $ 216,132 $ 138,829 $ 133,142 Other 1,432 554 606 Total interest incurred 217,564 139,383 133,748 LESS: Capitalized interest 7,597 2,582 2,889 Interest expense $ 209,967 $ 136,801 $ 130,859 92 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Fair Value The table below represents the fair value of the Company’s debt structures as of the periods presented: As of December 31, (in thousands) 2025 2024 Credit Facility (a) $ 485,400 $ 284,400 Term Loans (b) — 170,128 ABS notes (b) 2,215,749 1,156,858 Nordic Bond (b) 306,088 — Other miscellaneous borrowings (a) 24,478 107,588 Total fair value of outstanding debt $ 3,031,715 $ 1,718,974 (a) Carrying value approximates fair value. (b) Fair values are measured using a market approach, based upon market rates, which are Level 2 inputs. Note 16 - Accounts Payable & Accrued Liabilities All accounts payable and accrued liabilities are classified as current liabilities and are expected to be settled within one year from the balance sheet date. These obligations are unsecured, non-interest bearing, and are typically settled in the normal course of business. The carrying amounts approximate fair value due to the short-term nature of these liabilities. There are no material amounts past due or in dispute as of the balance sheet date. The table below details the Company’s accounts payable and accrued liabilities as of the periods presented: As of December 31, (in thousands) 2025 2024 Accounts payable $ 81,814 $ 35,013 Accrued operating expense 67,475 37,573 Accrued compensation expense 31,425 21,730 Accrued capital expenditures 41,670 12,017 Other accrued liabilities 53,172 24,046 Total accounts payable & accrued liabilities $ 275,556 $ 130,379 Note 17 - Other Liabilities The table below details the Company’s other liabilities as of the periods presented: As of December 31, (in thousands) 2025 2024 Other current liabilities Taxes payable $ 53,722 $ 33,498 Operating lease liabilities 2,131 1,567 Financing lease liabilities 22,036 12,209 Current portion of ARO 24,857 6,436 Other current liabilities 64,755 47,575 Total other current liabilities $ 167,501 $ 101,285 Other noncurrent liabilities Operating lease liabilities $ 1,611 $ 1,802 Financing lease liabilities 49,926 29,022 Deferred tax liability 11,900 8,011 Other noncurrent liabilities 14,969 5,384 Total other noncurrent liabilities $ 78,406 $ 44,219 93 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Note 18 - Fair Value The fair value of an asset or liability is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. To determine fair value, the Company applies a hierarchy that consists of three input levels. The first and second levels are regarded as observable, while the third is categorized as unobservable. These input levels may be utilized in the measurement of fair value as outlined below: Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2: Inputs (other than quoted prices included in Level 1) can include the following: (1) Observable prices in active markets for similar assets or liabilities; (2) Prices for identical assets or liabilities in markets that are not active; (3) Directly observable market inputs for substantially the full term of the asset or liability; and (4) Market inputs that are not directly observable but are derived from or corroborated by observable market data. Level 3: Unobservable inputs which reflect the Company’s best estimates of what market participants would use in pricing the asset or liability at the measurement date. There were no transfers between fair value levels for the year ended December 31, 2025 . Recurring Fair Value Measurements Derivatives The Company measures the fair value of its derivatives in accordance with ASC 820, Fair Value Measurement, utilizing valuation models that incorporate observable market inputs whenever available. These inputs typically include contractual terms, current market prices, forward price curves for natural gas, liquids, and oil, relevant interest rate yield curves (such as U.S. Treasury and SOFR), and volatility factors. Derivatives are classified within the fair value hierarchy based on the observability of the inputs used in the valuation. The Company’s fixed price swaps are classified as Level 2 and are valued using third-party discounted cash flow models, which rely on NYMEX futures for natural gas and oil derivatives and OPIS forward curves for NGL derivatives. Interest rate derivatives, also classified as Level 2, are valued using discounted cash flow models that incorporate contracted notional amounts, market-quoted SOFR yield curves, and credit-adjusted risk-free rates. Options, including call options, put options, and collars, are classified as Level 2 and valued using the Black-Scholes option pricing model. This model incorporates contract terms such as maturity, market parameters including NYMEX and OPIS futures, interest rates, volatility, and counterparty credit risk. Volatility and other significant inputs are obtained from independent third-party pricing sources and are subject to monthly verification. Basis swaps are classified as Level 2 and are valued using third-party models based on forward commodity price curves. Changes in key inputs, such as volatility, may result in changes to the fair value measurement of the Company’s derivatives. Assets and liabilities measured at fair value on a recurring basis as of the following periods: As of December 31, 2025 (in thousands) Level 1 Level 2 Level 3 Assets Derivatives — 234,852 — Liabilities Derivatives — ( 596,526 ) — Total net assets (liabilities) $ — $ ( 361,674 ) $ — 94 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company As of December 31, 2024 (in thousands) Level 1 Level 2 Level 3 Assets Derivatives — 62,198 — Liabilities Derivatives — ( 772,545 ) — Total net assets (liabilities) $ — $ ( 710,347 ) $ — Nonrecurring Fair Value Measurements Impairment of Proved Natural Gas & Oil Properties When impairment occurs, the Company estimates the fair value of the impaired proved natural gas and oil properties through a discounted cash flow method, which incorporates Level 3 inputs that are not directly observable. Business combinations The Company assesses the value of acquired proved properties using an income-based approach as of the acquisition date. This method is classified as a Level 3 fair value estimate due to its reliance on key assumptions, such as anticipated production volumes, future commodity pricing, operating costs, weighted average cost of capital (the discount rate) and risk adjustments tailored to the reserve classification. Financial Instruments Not Measured at Fair Value The carrying values of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate fair value due to the highly liquid or short-term nature. The Company’s Credit Facility (see Note 15 ) has a recorded value that approximates fair market value, as it bears interest at a floating rate that approximates a current market rate. Note 19 - Commitments & Contingencies 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. To ensure we meet these commitments, we regularly monitor our proved developed reserves. The following table summarizes our total undiscounted commitments, compiled using best estimates based on our sales strategy, as of December 31, 2025 . 2026 2027 2028 2029 2030 Thereafter Total Natural gas (MMcf) 169,054 49,203 25,942 15,727 15,727 275,622 551,275 Litigation and Regulatory Proceedings The Company is involved in various pending legal issues that have arisen in the ordinary course of business. The Company accrues for litigation, claims, and proceedings when a liability is both probable and the amount can be reasonably estimated. As of December 31, 2025 and 2024 , the Company did not have any material amounts accrued related to litigation or regulatory matters. For any matters not accrued for, it is not possible to estimate the amount of any additional loss or range of loss that is reasonably possible. However, based on the nature of the claims, management believes that current litigation, claims, and proceedings are not, individually or in aggregate, after considering insurance coverage and indemnification, likely to have a material adverse impact on the Company’s financial position, results of operations, or cash flows. The Company has no other contingent liabilities that would have a material impact on the Company’s financial position, results of operations, or cash flows. Environmental Matters The Company’s operations are subject to environmental laws and regulations in all the jurisdictions where it operates, and it was in compliance as of December 31, 2025 and 2024 . However, the Company is unable to predict the impact of additional environmental laws and regulations that may be adopted in the future, including whether they would adversely affect its operations. The Company can offer no assurance regarding the significance or cost of compliance associated with any new environmental legislation or regulation once implemented. 95 Table of Contents Notes to the Consolidated Statements Financial Statements Diversified Energy Company Note 20 - Supplemental Cash Flow Information The following table summarizes supplemental cash flow information as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Supplemental cash flow information: Cash paid for interest $ 201,310 $ 123,141 $ 116,784 Cash paid for income taxes 3,479 11,421 8,260 Cash paid for amounts included in the measurement of operating lease liabilities 3,723 1,990 2,044 Cash paid for amounts included in the measurement of finance lease liabilities 15,816 12,473 10,263 Supplemental disclosure of non-cash transactions: Issuance of common stock for acquisitions $ 307,221 $ 55,866 $ — Additions to asset retirement obligations 195,923 105,614 3,192 Right-of-use assets obtained in exchange for operating lease liabilities 25,711 — — Right-of-use assets obtained in exchange for finance lease liabilities 3,605 — — Cash paid for amounts included in the measurement of operating lease liabilities represents total lease payments made during the period. For finance leases, cash paid for amounts included in the measurement of lease liabilities represents the principal portion of lease payments. Interest paid on finance leases is included in cash paid for interest. For additional information regarding income taxes, stockholders’ equity, ARO, leases, and interest, see Notes 4 , 11 , 13 , 14 , and 15 , respectively. Note 21 - Supplemental Quarterly Financial Information (Unaudited) In connection with the Company’s transition from International Financial Reporting Standards (“IFRS”) to U.S. GAAP, the quarterly financial information for the fiscal year ended December 31, 2025 has been prepared and presented for the first time on a U.S. GAAP basis. As all quarterly amounts reflect the application of U.S. GAAP to periods previously reported only on an IFRS basis, the summarized quarterly financial information below represents the Company’s initial presentation of U.S. GAAP quarterly results. For the Three Months Ended (in thousands, except per share data) March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Total revenue $ 62,515 $ 600,338 $ 499,769 $ 666,520 Income (loss) from operations ( 188,112 ) 291,381 180,883 250,865 Net income (loss) attributable to DEC ( 323,197 ) 297,737 171,115 195,460 EPS Basic $ ( 5.52 ) $ 3.77 $ 2.22 $ 2.54 Diluted ( 5.52 ) 3.67 2.14 2.48 Note 22 - Subsequent Events The Company has evaluated subsequent events o ccurring after December 31, 2025 , through February 26, 2026 , the date the financial statements were issued. The following material transactions occurred subsequent to year-end: Dividends Subsequent to December 31, 2025 , in February 2026 , the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $ 0.29 per share. The dividend is payable on June 30, 2026 , to stockholders on record as of the close of business on May 29, 2026 . Borrowings Subsequent to December 31, 2025 , in February 2026 , the Company issued an additional $ 200 million in Nordic Bonds, increasing the aggregate principal amount of the outstanding Nordic Bonds to $ 500 million . Acquisitions & Divestitures Subsequent to December 31, 2025 , in February 2026 , the Company announced that it entered into an agreement to acquire certain producing properties from Sheridan Production Company for an estimated gross purchase price of $ 245 million before customary purchase price adjustments. The transaction is expected to close in the second quarter of 2026. 96 Table of Contents Supplemental Natural Gas & Oil Information Diversified Energy Company Supplemental Natural Gas & Oil Information (Unaudited) Estimated Reserves The process of estimating quantities of “proved” and “proved developed” reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering, and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors, including additional development activity, evolving production history, and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserves estimates may occur from time to time. Although every reasonable effort is made to ensure that reserves estimates reported represent the most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures. For each of the years ended December 31, 2025 , 2024 and 2023 , the estimated proved reserves were independently evaluated by our independent reserves auditors , NSAI, in accordance with petroleum engineering and evaluation standards published by the Society of Petroleum Evaluation Engineers and definitions and guidelines established by the SEC. Accordingly, the following reserves estimates are based on existing economic and operating conditions. Reserves estimates are inherently imprecise, and the Company’s reserves estimates are generally based on extrapolation of historical production trends. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. Based on reserve reporting rules, the price is calculated using the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within the period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. Therefore, the Company’s estimates are expected to change, and such changes could be material and occur in the near term as future information becomes available. The following table summarizes the changes in the Company’s net proved reserves for the periods presented, all of which were located in the U.S.: Natural Gas NGLs Oil Total (MMcf) (MBbls) (MBbls) (MMcfe) (a) As of December 31, 2022 4,349,611 101,931 14,830 5,050,177 Revisions of previous estimates (b) (658,917) 153 (230) (659,379) Extensions, discoveries and other additions 712 — 50 1,012 Production (256,378) (5,832) (1,377) (299,632) Purchase of reserves in place (c) 105,713 2,592 923 126,803 Sales of reserves in place (d) (340,697) (3,143) (1,580) (369,035) As of December 31, 2023 3,200,044 95,701 12,616 3,849,946 Revisions of previous estimates (b) (212,056) 11,305 6,215 (106,936) Extensions, discoveries and other additions 897 32 33 1,287 Production (244,298) (5,980) (1,568) (289,586) Purchase of reserves in place (c) 151,210 2,413 1,228 173,056 Sales of reserves in place (d) (178) — — (178) As of December 31, 2024 2,895,619 103,471 18,524 3,627,589 Revisions of previous estimates (b) 777,934 1,521 1,076 793,516 Extensions, discoveries and other additions 16,341 — — 16,341 Production (295,723) (8,821) (7,935) (396,259) Purchase of reserves in place (c) 1,031,562 68,804 99,485 2,041,296 Sales of reserves in place (d) — — — — As of December 31, 2025 4,425,733 164,975 111,150 6,082,483 (a) The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the ratio of one Bbl of oil or NGLs to six Mcf of natural gas. (b) During 2025 , commodity market pricing increased driving a net upward revision of 793,516 MMcfe. During 2024 , commodity market pricing decreased driving a net downward revision of 106,936 MMcfe. During 2023 , commodity market pricing decreased significantly driving a net downward revision of 659,379 MMcfe. (c) During 2025 , purchases of reserves in place were primarily related to the Canvas, Maverick, and Summit acquisitions. During 2024 , purchases of reserves in place were primarily related to the Oaktree, Crescent Pass, and East Texas II acquisitions. During 97 Table of Contents Supplemental Natural Gas & Oil Information Diversified Energy Company 2023 ,purchases of reserves in place were primarily related to the Tanos II acquisition. For additional information about acquisitions, refer to Note 3 . (d) During 2025 , 2024 and 2023 , sales of reserves in place were primarily related to divestitures of non-core assets. For additional information about divestitures , r efer to Note 3 . Natural Gas NGLs Oil Total (MMcf) (MBbls) (MBbls) (MMcfe) (a) Total proved reserves as of: December 31, 2022 4,349,611 101,931 14,830 5,050,177 December 31, 2023 3,200,044 95,701 12,616 3,849,946 December 31, 2024 2,895,619 103,471 18,524 3,627,589 December 31, 2025 4,425,733 164,975 111,150 6,082,483 Total proved developed reserves as of: December 31, 2022 4,340,779 101,931 14,830 5,041,345 December 31, 2023 3,184,499 94,391 12,380 3,825,125 December 31, 2024 2,895,619 103,471 18,524 3,627,589 December 31, 2025 4,224,112 159,025 87,041 5,700,508 Total proved undeveloped reserves as of: December 31, 2022 8,832 — — 8,832 December 31, 2023 15,545 1,310 236 24,821 December 31, 2024 — — — — December 31, 2025 201,621 5,950 24,109 381,975 (a) The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the ratio of one Bbl of oil or NGLs to six Mcf of natural gas. Capitalized Costs Relating to Natural Gas and Oil Producing Activities Capitalized costs relating to natural gas and oil producing activities and related accumulated depreciation, depletion and amortization were as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Proved properties $ 5,808,908 $ 3,807,670 $ 3,176,808 Unproved properties 19,804 7,266 8,032 Total capitalized costs 5,828,712 3,814,936 3,184,840 Less: Accumulated depletion (1,320,953) (981,715) (747,202) Net capitalized costs $ 4,507,759 $ 2,833,221 $ 2,437,638 Costs Incurred in Natural Gas and Oil Property Acquisition, Exploration and Development Activities Costs incurred in natural gas and oil property acquisition, exploration and development activities were as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Proved properties $ 1,824,666 $ 455,514 $ 76,226 Unproved properties 77,478 13,886 2,356 Total property acquisition costs 1,902,144 469,400 78,582 Total exploration and development costs 92,163 4,587 10,923 Capitalized interest — — — Total costs $ 1,994,307 $ 473,987 $ 89,505 98 Table of Contents Supplemental Natural Gas & Oil Information Diversified Energy Company Results of Operations for Producing Activities Revenues and expenses related to the production and sale of natural gas, NGLs, and oil were as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Commodity revenue $ 1,538,821 $ 732,259 $ 802,399 Operating expense (644,786) (339,086) (349,478) Depreciation, depletion, amortization & accretion (457,545) (284,048) (248,098) Results of operations 436,490 109,125 204,823 Income tax benefit (expense) 95,155 23,353 (49,567) Results of operations, net of income tax benefit (expense) $ 531,645 $ 132,478 $ 155,256 Standardized Measure of Discounted Future Net Cash Flows The following information has been developed based on natural gas and crude oil reserves and production volumes estimated by the Company’s engineering staff. While it can be used for some comparisons, it should not be the sole method for evaluating the Company or its performance. Additionally, the following information may not represent realistic assessments of future cash flows, nor should the Standardized Measure of Discounted Future Net Cash Flows (the “Standardized Measure”) be viewed as representative of the current value of the Company. The Company believes that the following factors should be considered when reviewing the information: • Future costs and selling prices will differ from those required to be used in these calculations; • Due to future market conditions and governmental regulations, actual rates of production in future years may vary significantly from the rate of production assumed in the calculations; • The selection of a 10% discount rate is arbitrary and may not be a reasonable measure of the relative risk associated with realizing future net natural gas and oil revenues; and • Future net cash flows may be subject to different rates of income taxation. Under the Standardized Measure, future cash inflows were estimated by using the 12-month average index price for the respective commodity, calculated as the unweighted arithmetic average of the first day of the month price for each month during the year. Prices used for the Standardized Measure (adjusted for basis and quality differentials) were as follows: For the Year Ended December 31, 2025 2024 2023 Natural gas (Mcf) $ 3.09 $ 1.83 $ 2.49 NGLs (Bbls) 17.54 20.02 21.59 Oil (Bbls) 64.26 74.76 71.89 Future cash inflows were reduced by estimated future development and production costs based on year-end costs to arrive at net cash flow before tax. Future income tax expense was computed by applying year-end statutory tax rates to future pretax net cash flows, less the tax basis of the properties involved and the utilization of available tax carryforwards related to natural gas and oil operations. The applicable accounting standards require the use of a 10% discount rate. Management does not solely rely on the following information when making investment and operating decisions. These decisions are based on a number of factors, including estimates of proved reserves and varying price and cost assumptions that are considered more representative of a range of anticipated economic conditions. The Standardized Measure is as follows: 99 Table of Contents Supplemental Natural Gas & Oil Information Diversified Energy Company For the Year Ended December 31, (in thousands) 2025 2024 2023 Future cash inflows $ 23,713,859 $ 8,600,093 $ 10,900,742 Future production costs (10,492,260) (4,497,171) (5,345,117) Future development costs (a) (5,379,265) (2,655,256) (1,937,293) Future income tax expense (1,619,405) (303,892) (653,216) Undiscounted future net cash flows (b) 6,222,929 1,143,774 2,965,116 10% annual discount for estimated timing of cash flows (b) (2,040,445) 253,147 (1,219,580) Standardized Measure $ 4,182,484 $ 1,396,921 $ 1,745,536 (a) Includes $3,646 million , $2,465 million and $1,716 million in asset retirement costs for the years ended December 31, 2025 , 2024 and 2023 , respectively. (b) For the year ended December 31, 2024, the PV-10 value is higher than the total undiscounted future net cash flows and the 10% annual discount is positive due to the Company’s estimated future abandonment costs associated with proved reserves. As the anticipated timing of the majority of these abandonment costs is many years in the future, these costs have a much larger impact on the undiscounted future net cash flows as compared to their impact when discounting is applied. Due to this fact, as well as relatively lower 2024 SEC pricing, the undiscounted future net cash flows were lower than the discounted pre-tax PV-10 value for the year ended December 31, 2024. Future cash inflows were reduced by estimated future production and development costs based on year-end costs to determine pre-tax cash inflows. Future income taxes were computed by applying the year-end statutory tax rate to the excess of pre-tax cash inflows over the Company’s tax basis in the associated proved natural gas and oil properties, after accounting for permanent differences and tax credits. Changes in the Standardized Measure were as follows: For the Year Ended December 31, (in thousands) 2025 2024 2023 Standardized Measure, beginning of year $ 1,396,921 $ 1,745,536 $ 6,743,100 Sales and transfers of natural gas and oil produced, net of production costs (879,252) (374,104) (431,629) Net changes in prices and production costs 1,439,378 (804,229) (5,850,625) Extensions, discoveries, and other additions, net of future production and development costs (283,207) (77,393) (13,682) Acquisition of reserves in place 2,869,296 407,175 122,613 Divestiture of reserves in place — (27) (377,097) Revisions of previous quantity estimates 605,424 (344) (1,224,544) Net change in income taxes (802,115) 199,303 1,688,208 Previously estimated development costs incurred during the year — 12,676 — Changes in production rates (timing) and other (323,138) 56,610 206,646 Accretion of discount 159,177 231,718 882,546 Standardized Measure, end of year $ 4,182,484 $ 1,396,921 $ 1,745,536 100 Table of Contents Form 10-K Diversified Energy Company Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Not applicable.