Todays flash blog is from Jakarta airport after a whirlwind but very impressive visit to Akatara, Jadestone’s flagship gas processing plant in Jambi, Indonesia. More on the below later if necessary.

Diversified Energy Company

Diversified Energy has announced the following operational and financial results for the quarter ended September 30, 2025. Third Quarter 2025 Results Production exit rate (a) : 1,144 MMcfepd (191 Mboepd) Average production: 1,127 MMcfepd (188 Mboepd) Production volume mix (natural gas, NGLs, oil): 74% / 13% / 13% Total Revenue (including settled hedges) (d) : $500 million Operating Cash Flow: ~$166 million Adjusted EBITDA (b) : ~$286 million; Record quarterly result Adjusted Free Cash Flow (c) : ~$144 million after ~$9 million of nonrecurring costs Revenue per unit (d) : $4.82/Mcfe ($28.92/Boe) Adjusted cost per unit (e) : $2.08/Mcfe ($12.48/Boe) 2025 Guidance: Raised Adjusted EBITDA ~7% and Adjusted Free Cash Flow ~5%

Strong Financial and Operational Metrics

Operational Metrics 3Q25 3Q24 YoY % Change 9mo Ended Sep. 30, ’25 9mo Ended Sep. 30, ’24 YoY % Change Production (Mmcfe/d) 1,127 829 36% 1,048 774 35% Production volume mix Natural gas 74% 84% 76% 84% NLGs 13% 12% 13% 12% Oil 13% 3% 11% 3% Total Revenue (d) (millions) $500 $244 105% $1,304 $692 88% Adj. EBITDA (b) (millions) $286 $115 149% $704 $333 111% Adj. FCF (c) (millions) $144 $56 157% $296 $158 87% Financial Strength and Shareholder Returns 3Q25 dividend: $0.29 per share declared Shareholder returns: Over $146 million returned YTD via dividends and repurchases (f) Share repurchases: ~5.1 million shares repurchased YTD (~7% of current outstanding shares), totaling ~$61 million (f) Liquidity: ~$440 million consisting of undrawn credit facility capacity and unrestricted cash Leverage ratio: 2.4x Net Debt to Adjusted EBITDA; ~20% improvement from YE2024 Consolidated debt consists of ~70% in non-recourse, amortizing ABS notes ABS debt reduction: retired ~$203 million in principal during first three quarters of 2025 Strategic Execution and Transformational Growth Mountain State Plugging Fund & Next LVL Energy Groundbreaking partnership to establish the nation’s FIRST financial assurance fund dedicated to retirement of DEC owned wells (~21,000) in the state of West Virginia. Since establishment of DEC’s well service company, Next Level Energy in 2022, Diversified has retired ~1,200 wells Canvas Energy Acquisition Highly synergistic with significant operational overlap in DEC’s core Oklahoma operating area Tangible opportunity for portfolio optimization potential from undeveloped acreage and added highly valuable, multi-decade cash generating reserves Utilizing Carlyle strategic funding partnership and on track to close in 4Q 2025 Oil & Gas Methane Partnership (OGMP) Achievement Gold Standard Reporting and marks fourth consecutive year of recognition for protocol based on a comprehensive, measurement-based framework for methane detection and mitigation Unlocking Value Through Portfolio Optimization Portfolio Optimization Program (“POP”) Realized an additional ~$74 million from non-core asset and leasehold divestitures in 3Q, bringing year-to-date proceeds up to ~$144 million Appalachian Compressor Station $500,000 margin-enhancing acquisition, which was identified and integrated by our field team, has lead to over $3 million per year in run-rate cost savings including incremental CMM credits

Rusty Hutson, Jr., CEO of Diversified, commented:
“I am very pleased to report that our year-to-date results have exceeded our plans and our teams have continued to perform with operational focus and excellence. Our growing portfolio of high-quality assets continued to deliver exceptional results this quarter, generating a year-over-year increase of approximately 105% in revenue (d) and 157% in free cash flow (c) , demonstrating Diversified’s ability to generate substantial value in volatile markets. This performance reflects the strength of our business model, the disciplined approach to acquire assets, the commitment to our optimization strategy, the consistency of our operational execution, and our ability quickly and efficiently integrate acquisitions to capture synergies and enhance margins.

DEC continues to deliver strong quarterly numbers which produced record EBITDA and FCF with growth of c.150% and leverage ytd down by an impressive c.20%. On the back of this they have upped FY 2025 guidance, adjusted EBITDA by c.7% and adjusted FCF by c.5%.

They continue to return money to shareholders, the 3Q25 dividend is $0.29 per share (see announcement below) which means that the company has returned over $146m YTD via dividends and share buy-backs. Share repurchases are c.5.1m shares, c.7% of current outstanding shares which total c.$61m. 

The shares are performing well, they are some 40% off the lows and yet still make for a good investment at these levels. 

Dividend announcement

Diversified has announced that the Board has declared an interim dividend of 29 cents per share in respect of 3Q25 for the three month period ended September 30, 2025. Key dates related to this dividend include: Record Date: February 27, 2026 Payment Date: March 31, 2026 Default Currency: US Dollar Currency Election Option: Sterling Last Date for Currency Election: March 6, 2026 Diversified will pay the dividend in U.S. dollars while continuing to make available to shareholders a sterling election.

For those shareholders who wish to receive their dividend payment in sterling, and who have not yet completed a currency election form, the Company has made available a dividend election form on its website at https://ir.div.energy/dividend-information. Shareholders who wish to receive sterling should submit the currency election form to Computershare Investor Services no later than March 6, 2025.

Diversified will announce the sterling value of the dividend payable per share approximately two weeks prior to the payment date. This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 on Market Abuse (“UK MAR”), as it forms part of the UK domestic law by virtue of the European Union (Withdrawal) Act 2018.

Union Jack Oil & Gas

Union Jack has announced that, further to the Company’s announcement of 24 September 2025, the Company is providing an update on the Sark well, located in Central Oklahoma, USA. Union Jack holds a 53% interest in Sark.

Sark was drilled to a Total Depth of 5,391 feet and the Prue interval was highlighted on electric logs as hydrocarbon bearing following evaluation.

Temporary production facilities were installed and a 30-day test programme was undertaken. The production test of the Prue Sandstone failed to produce commercial hydrocarbons.

Post well analysis indicates the Sark well encountered a valid structural closure, however, the trap was subsequently breached.

David Bramhill, Executive Chairman of Union Jack, commented:
“Following the drilling of four successful discoveries in Oklahoma to date, this is an unexpected and disappointing result. Our US interests, with income from Moccasin, the Andrews Field and Mineral Royalties, continue to be profitable and we look forward to continuing our Oklahoma drilling programme.”

Whilst probably no surprise after the initial well news, it is nevertheless a highly disappointing result and particularly so after a string of good results and the pre-drill expectations. But UJO ain’t stopping here, it has a run of successes as above and will move on in its drilling programme in Oklahoma.

Petro Matad

Petro Matad has provided the following operational update.

Key updates

• The Gazelle-1 well, which was tested in October, has been brought onto production at an initial rate of 200 barrels of oil per day (bopd).
• Heron-2 re-test is ongoing.
• Heron-1 reached the first anniversary of production start-up with c. 60,000 barrels (bbls) having been produced to date.
• Production from Gazelle 1 is being processed for export under the existing Oil Sales Agreement with PetroChina and progress is being made on rewording the agreement to ensure 100% payment and payment of money withheld to date.

Gazelle-1 on production

Following the successful well test of Gazelle-1 in October, surface facilities have been installed and the well has been brought onstream. The first shipments of Gazelle crude have been delivered to the Block XIX TA-1 processing and export facility under the existing Oil Sales Agreement.

Based on analysis of the pressure data acquired during the well test, the initial production rate for Gazelle-1 has been set at 200 bopd. Well performance will be closely monitored to determine if this rate can be increased. Since the distance of the well from the oil water contact within the trap is not known, a conservative approach is being taken on start up to reduce the chance of early water breakthrough.

Production data from the well will help to refine the estimation of the connected reservoir volume and to guide decisions on potential appraisal well locations.

Heron-2 re-test

The temporary pumping facilities at Heron-2 initially proved much more efficient than the preceding swabbing operation with approximately one third of the remaining injected fluid quickly recovered. This comprised mainly stimulation fluid but with an increasing percentage of oil. However, an unexpected drop off in flow was observed which may indicate some form of down hole mechanical issue or potentially an obstruction of the perforations. Whilst this matter was being investigated the well had to be shut-in to realign the beam pump. This work was completed and pumping operations have now resumed. If the lower than expected fluid recovery rate continues, the well will be shut in for the winter and further remediation options will be evaluated.

Heron-1 update

24 October 2025 saw the first anniversary of production start up at the Heron-1 well. In the first 12 months 298 deliveries of crude oil to the Block XIX TA-1 facilities have been made with a total of 59,920 barrels of crude oil offloaded.

This equates to an average production from the well over the year of 164 bopd. The water cut remains stable at c. 3%. The production of Heron-1 is trending in line with that observed in the basin as a whole with current daily production of c. 145 barrels. Performance to date is comparable with some of the better producers in the basin.

The infrastructure connecting Heron-1 to the national electricity grid is in place and ready to be energised. The committee required under the regulations to inspect and certify the installation and to approve its start up requires sign off from the provincial governor and this has not yet been provided. We are following up with the governor’s office and we have sought the assistance of industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), to expedite this so that the grid connection can be commissioned and cost savings on power generation can start to be realised. Until the grid connection is energised, power will continue to be supplied by the onsite generator and operations will not be interrupted.

Oil Sales Agreement and payment update

Payments under the Oil Sales Agreement with Block XIX operator PetroChina have been made up to and including the month of August. The invoice for September production is being processed for payment and today we have submitted the invoice for October.

Meetings have been held with PetroChina on the rewording of the Oil Sales Agreement and we are pushing to finalise the matter and obtain their written confirmation of the removal of the withholding and a firm date by which the withheld amount will be paid. 

Mike Buck, CEO of Petro Matad, said:
“Our operations team has worked hard to get the Gazelle-1 well ready for production in short order. We will closely monitor well performance to maximise production balanced with prudent reservoir management. We are very pleased to be able to increase production and revenue generation so quickly after the successful Gazelle-1 well test and to add this to the consistent performance of Heron-1.

Meanwhile, Heron-2 continues to present challenges. We still hope to get an oil rate out of the well this year or, at the very least, enough information to allow us to prepare for another operationally appropriate attempt to do so after this winter’s operational shut down.

PetroChina has been slow to respond on the rewording of the oil sales agreement but progress is being made.”

I will try and get back if I can talk to Mike Buck in the next day or two but this looks like one step forward with Gazelle and two steps backwards with Heron-2. Add the that the not unusual dithering by Petro China when it comes to putting its hand in its pocket and the market has chalked the stock off by some 15% last time I looked. More later I hope.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog