Diversified Energy Company, a Delaware corporation (“Diversified,” “DEC,” “we,” “us,” “our,” or collectively with its wholly owned

subsidiaries, 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, Indiana, Pennsylvania, Virginia, West Virginia, Kentucky, Tennessee and Alabama;

•Central Region, which includes Texas, Oklahoma, New Mexico, and Louisiana;

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted

accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to

such rules and regulations, certain disclosures have been condensed or omitted. These unaudited condensed consolidated financial

statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended

December 31, 2025, as included in the Company’s annual report on Form 10-K. The accompanying unaudited condensed consolidated

financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of

our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly

owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been

Certain reclassifications have been made to prior period financial statements and related disclosures to conform to current period

presentation. These reclassifications have no impact on previously reported total assets, total liabilities, net income or total operating

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

purposes of allocating resources and assessing performance. The CODM evaluates the Company’s operations in a consolidated

manner. Accordingly, the Company has one reportable segment.

The CODM uses consolidated income (loss) before income taxes for purposes of allocating resources and assessing operating

performance. The CODM is also regularly provided information on lease operating expense, transportation expense, production taxes,

and general and administrative expense, which represent significant segment expenses. Other segment items primarily consist of

depreciation, depletion and amortization, interest expense, and income tax expense (benefit). These amounts are derived from, and can

be found within, the Company’s Condensed Consolidated Statements of Comprehensive Income (Loss).

Segment profit or loss reconciles to consolidated income (loss) before income taxes with no reconciling items.

There have been no material changes in the Company’s reportable segment, the CODM, or the measures used to assess segment

performance since December 31, 2025. There were no material changes in segment assets from those reported in the Company’s

annual report on Form 10-K for the year ended December 31, 2025.

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

Restricted cash represents cash whose withdrawal or use is limited by contractual or regulatory requirements and is not available for

general corporate purposes. Restricted cash is presented as either a current or noncurrent asset based on the expected timing of the

•Amounts held as collateral for surety bonds or required by state agencies for well abandonment obligations; and

•Cash reserves required for interest payments and fees related to the Company’s asset-backed securitization arrangements,

which are administered by an independent indenture trustee.

The Company’s accounting policy and the nature of its restricted cash arrangements are consistent with those described in its annual

report on Form 10-K for the year ended December 31, 2025, and there were no material changes during the interim period.

In the current year, the Company adopted the following accounting standards:


ASU Number	Description	Effective Date
ASU 2024-04	Debt—Debt with Conversion and Other Options	January 1, 2026
ASU 2025-05	Measurement of credit losses for accounts receivable and contract assets from transactions accounted for under Topic 606	January 1, 2026

The adoption of these standards did not have a significant impact on the amounts reported in the Condensed Consolidated Financial