- Diversified Announces Natural Gas Supply Contract with Major Gulf Coast LNG Facility
- Represents an Additional Option to Reduce Commodity Price Risk and Enhance Margins
- Continuing to Add to 2025-2027 Natural Gas Hedges Advantageously
Diversified Energy Company has announced the execution of a supply agreement with a major Gulf Coast LNG facility to provide natural gas to export. Under the terms of the agreement, Diversified will provide approximately 40 Bcf of natural gas under a fixed pricing construct indexed to Gulf Coast pricing for a period of three years, beginning in November 2024.
Fueled by a vision to supply clean American energy to the world, this significant contract collaboration encompasses the commitment to ensure energy security for global trading partners who are facing supply disruptions, geopolitical tensions, rising regional demands, and changing consumption patterns.
Additionally, the Company has been able to strategically take advantage of the recent strength of the natural gas price curve to add to its multiple-year hedge portfolio in 2025 through 2027, with an average NYMEX hedge price of approximately $3.45 per MMBtu. The Company will provide additional disclosures and an updated hedging schedule with its Third Quarter 2024 Trading Statement.
Commenting on the Agreement & Hedging Program, CEO Rusty Hutson, Jr. said:
'This supply agreement to a Gulf Coast LNG export facility is a great example of the market's recognition of Diversified's reliable natural gas production and operational efficiency while providing another lever for the Company to enhance margins and deliver consistent cash flows. In line with the Company's strategy to reduce commodity price risk, we believe this agreement, along with tactically adding to our 2025-2027 hedge position during the recent natural gas price strength, will help us to provide consistent, robust cash margins. The agreement not only reflects the critical need and strong global demand for natural gas but also the importance natural gas plays in powering global economies for decades to come. We look forward to advancing our relationships with Gulf Coast LNG export facilities that shares our commitment to building a future of energy abundance, affordability, and security.'
Source: Diversified Energy
