Full Year 2023 Diversified Energy Company PLC Earnings Call
Participants
Douglas Kris; Vice President of IR; Diversified Energy Company PLC
Robert Russell Hutson; Chief Executive Officer, Co-Founder, Executive Director; Diversified Energy Company PLC
Brad Gray; President & CFO; Diversified Energy Company PLC
Presentation
Operator
Ladies and gentlemen, good morning, and welcome to the Diversified Energy 2023 final-results earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Douglas Kris, SVP, IR, and Corporate Communications. Please go ahead, sir.
Douglas Kris
Good morning, and welcome to the Diversified Energy 2023 results and acquisition conference call. Joining me today are Rusty Hutson, our Founder and Chief Executive Officer; and Brad Gray, our President and Chief Financial Officer.
During this call, we will make certain references to non-GAAP financial measures. Reconciliations to those financial measures are in both of our earnings release as well as our annual report, which was published this morning and available on our website as well with our filings with the SEC.
Now, my pleasure to hand the call over to Rusty Hutson. Rusty, please go ahead.
Robert Russell Hutson
Thank you, Doug. Appreciated it. Real quickly, just base the presentation today. I'm going to kick it off, talk a little bit about the 2023 numbers, the success that we had in '23. I will turn it over to Brad Gray, our Chief Financial Officer, to discuss financial metrics associated with the year. And then, I will come back on and update on the acquisition that we announced this morning, along with the 2024 strategic outlook for the remainder of the year.
So with that, I'll go to page 3 of the presentation and start there. I just want to say that we're pretty proud of our year and the 2023. The strategic successes that we had, that was a great year for Diversified in a very challenged commodity price environment. We'll talk a little bit about this, but our hedging program, our hedging portfolio was very successful in insulating us from a lot of that commodity price risk that we saw in 2023. But overall, very good year.
You can see here on page 3, some of the highlights that I'd bring to note cubing, the production was strong through 23 800 to 1800, 21 made to date natural gas production on average. So we continue to see a very resilient decline rates as we held at under 10%, again, for which is the key to our success long term is the mature producing assets that we that we operate, which gives us the ability to hedge and be successful with cash flow profile. But we have 143 million of of EBITDA for the year, which was a record for us on net debt at 2.3, again, within a margin of the 2 to 2.5 that we talked about from our investors' cash margin, strong at 52%, and that has been a staple since 2017. And I think which is a very key factor that investors should be please with this over the last since our IPO, we've returned $800 million of cash back to our investors, seven over 700 million of that dividends and the other portion in share repurchases in December we publicly listed on the New York Stock Exchange, which was something that we had been striving for for about 1.5 prior to that, very important factor for us as we move forward and being able to access the public markets and the institutional investors in the US on free cash flow, 200, 19 million, again on the on the RESD. perspective, continuing to see great results around our emissions and our mission identification and reduction programs. Again, our new GMP rewarded us with the gold standard for the second consecutive year on and we retired over 400 wells last year through our asset retirement program and next level of asset retirement company. So all in all, a great year, we'll talk about some of the specifics around some of that as we go through the presentation.
Moving to page 4 for having delivered on our derisked model and it really results in a de-risking for things, commodity price risk, which we do through our hedging program, our operational risk, which we do through our Smarter Asset Management and our ground game on a day-to-day basis with people that operate in the field and really striving and driving for those lower decline rates by operating the assets more effectively the financing risk and the ability to finance our company's programs, both from an RBL but also through some of the ABS and the financing structures that we've used to finance the business to create liquidity and also to pay down debt over a period of time. And then our environmental risks, which we do through our are stringent our ESG programs that we have for emissions detection and reduction and which we believe is best in class in our in our sector. All that leads to a very low risk model and with generating consistent cash flow, which you can see now since 2017, we've operated with these 50% cash margins consistently since 2017.
Flipping over to page 5, again, a very peer-leading decline rate in 2023, 10% or less, which is what we strive for on an annual basis. And this is including that the whole portfolio and you can see across all of our peers that that is a peer-leading decline rate, but more importantly, a very peer-leading capital intensity rate, the $0.25 per Mcf compared to all of our other peers. And these are US peers by the way, they just shows how little cash flow that we had to reinvest and to keep our decline rates where they are. So we have superior capital intensity, which enhances our free cash flow, which creates greater value for the shareholders and returns over a period of time.
Flipping on page 6, real quick hedging strategy. I'm in 23 with a very challenged commodity price environment will then install be carried over into 2024. But again, the hedging program that we have that we deploy across our portfolio gives us an advantage because you can see here our hedge price for natural gas at three oh nine, but 85% of our production hedged through crude through the remainder of this year. The remainder of 24 strip prices up to 45. So it's a pretty robust and you price above and beyond the current strip, and you can see our program, we're at 85% hedged at 24. We've probably around 70% or a little less maybe in 25 and forward. So that will continue because we underpin the business through through that hedging program for the long haul, you see as it relates to our peer average, were they function hedged on an average basis across the rest of our appears that they're at about 44%. And I think the key to that was we'll show as 24 continues to remain low in terms of pricing than our peers. Leverage will continue to elevate over the period of time. This gives us the ability to pay down our debt and continue to lower our leverage profile as Tom as 24 goes on on Page 7. One of the things that we did in December that you saw us announce it was an innovative asset sale where we were able to essentially bundle up an asset and essentially sell it to institutional investors for a much higher multiple than we would have been able to sell it to a third party. We sold that asset for a pop of seven times EBITDA multiple in December. It had a liquidity impact or uplift, I should say, of $90 million. And we delever the business with the structure. We remain that we retain a 20% minority interest in that asset. But at the end of the day, we were able to reduce debt to be able to sell the asset for a much higher multiple. And this is a this is a structure that we can continue to use moving forward. As long as the institutional investors are there to acquire those assets out of the structure. And so very innovative asset sale that provided liquidity, reduce debt and helped us to reduce leverage as well and enter 2024.
And with that, I'm going to turn it over to Brad to run through some additional financial metrics, and then I'll come back and talk about the acquisition and 24 five.
Brad Gray
Thank you, Rusty. It's good to be back in London, and it's good to be back in the financial leadership role with our company thoroughly enjoyed my six plus years as Chief Operating Officer. And I'm extremely proud of the growth and the results that our operational teams delivered during this time period and also enjoying being back in the role of Chief Financial Officer, which is providing me the opportunity to build relationships with our talented finance and accounting teams, our investors and bankers. But it's also allowing me to help direct impact and strengthen our financial operations and results so thank you for the opportunity to reengage in this part of the company. My comments today will reflect on our solid financial results in several areas of our operations, and I'll start out on Page 9. As Rusty mentioned in his initial remarks, 2023 was a great year in many respects for our company. We generated a record 543 million of adjusted EBITDA, and we delivered our 6th year in a row of approximately 50 plus percent gross margins. This 543 million of EBITDA translated into 410 million of cash provided by operations, which included a large use of working capital and first six months of the year. We ended 2023 with an average daily production of 821,000 cubic feet equivalent, which was another record year for us. Our product mix continues to be heavily weighted to natural gas at a 6%, while our exposure to liquids was 11% for natural gas liquids and 3% for crude oil. Our disciplined and consistent hedge program produced a healthy net realized price of $3.48 per MCFE, and our operating cost improved from 2022 to $1.69 per MCFE in spite of a very challenging commodity price environment. Our assets continue to provide our shareholders with a notable future value as seen with our net asset value per share of slightly more than $28. Our operational teams continued to deliver outstanding results with our focus on sustainability. We retired 384 wells in our Appalachia operations, our gold standard OG. and P. measurement detection practices and our LDR work have helped us ensure a 98% leak free rate of our wells, and we continue converting our pneumatic devices on more than 50 well pads.
Moving on to Page 10. Our annual report is also being published today. In this annual report, we share significant information on our Company strategy priorities and the key metrics we track to determine our success or KPI.s are provided here on this page. These KPIs were set by our Board of Directors, and we monitor review and discuss the progress and results throughout the year. Most of these caveats have been discussed by Russ, your May, but there's one on this page that we're highlighting for the first time, which is our methane emissions intensity ratio, which ended 2023 at 0.8. The attainment of this ratio is a significant achievement for our company and all of our teams that have been involved in this. This was our 2030 goal that we set back in 2021. So our teams, our investments in our commitment to be a responsible operator have driven us to achieve this goal of seven years early.
Moving on to page 12, page 11, TV, our disciplined hedge practices, as Rusty mentioned, early on, continue to underpin our ability to produce very healthy cash margin and cash flows for 2024, which again, as we've seen and we've talked about, has been a very challenging commodity price environment. Our natural gas hedge price is 25% higher than the 2020. For Nymex strip for natural gas were 85% hedged in 24 with primarily swap contracts, NGLs and oils were hedged around 50% to 60%.
Moving on to Page 12. This provides this base provide some additional insight into our low decline production, our effective hedge program and our efficient vertically integrated cost structure, which leads to a healthy cash margin of 52% in 2023, in spite of dramatically lower commodity prices, our revenue actually ended up higher in 2023 compared to 22. This result is really a testament to our low-decline assets and our thoughtful hedging program.
From a cost perspective, our price-linked expenses declined in 2023, while our field teams continued to utilize our Smarter Asset Management program to deliver cost savings and efficient operations, all which allowed us to generate the 52% cash margin.
Moving on to page 13, this is an area we don't talk about as much as we probably should, but it really is becoming a significant advantage and competitive advantage for our company. And that technology is a critical critical part of our success. And by being a company that generally grows through acquisition, it's extremely important for us to be disciplined and efficient with integrations and also with how we manage and use data. I'm proud to say that our chief and our Chief Information Officer, David Myers, was named as one of the top CFOs in energy in 2023 for his leadership and creativity in building out our information technology capabilities, we've built a 100% cloud-based technology platform and we're also committed to running our company on consistent single software applications. This commitment as part of our one DC. culture, where we strive to eliminate technical debt from previous companies and we strive to provide our teams with one consistent view of data. And what we found is that what our teams are all looking at the same set of trusted information on our ability to make timely and value-added business decisions is significantly improved.
On page 14, we've talked about our Smarter Asset Management program for many years, and it continues to deliver great results for us, whether the Smarter Asset Management efforts are focused on optimizing production, vertically integrating operations or just eliminating unnecessary spending. The objective is the same. And that objective is to increase and improve our cash margins. With our inventory of assets, we have continual opportunities to create value. Our central region teams produced great results with numerous projects in 23 and here on page 14, we've provided a few numbers to highlight that success. Moving on to Page 15. As I mentioned earlier, we will achieve our 2030 target of 0.8 ratio for methane emissions intensity here in 2023. Again, that's seven years earlier than our established target year. Our Board and leadership team established numerous climate focused targets back in the fourth quarter of 21 and over the last two years, we've worked extremely hard to make significant progress. We're all extremely proud of our teams for significantly beating this target time period and led by our Senior VP of environmental health and safety. Paul Aspen and our work on emissions detection measurement and mitigation has been very thoughtful and effective on page 16, an additional area of our climate focus goals has been with our asset retirement programs. We made intentional investments during 2022 to expand our internal retirement assets and our capacity. We combined four different plugging companies during 2022, and we created our next level. Energy company. 2023 represented our first full year of operation for next level.
And just to remind everyone, next level is a full service retirement company, which what does that mean? That means that it includes service rigs, cement trucks, wireline trucks, transportation and construction equipment. We've also we've also built into our next global entity, dedicated resources for permitting and land work to ensure that our operations are focused on efficiency. We're very pleased with the results from our retirement teams in 2023 with 584 well pads in our wells plugged in Appalachia and a total of 404 wells plug Overall, our Next Level entity team are achieving our Next Level energy team plug over 150 wells for third parties, which generated revenues that were available to offset the cost of plugging over our own inventory.
So in closing, I'll just say that 2023 was a challenging year in many ways, but as seen in our results. It was a also a significant year of accomplishment for our teams.
Rusty, back to you,
Robert Russell Hutson
and thank you, Brad. And I'll be speaking from Slide 18. As you guys have seen this morning, we made a announcement of a strategic acquisition, which really should come as no surprise to anybody that's watched the Company for any period of time is up and previewing the ability to acquire the Oaktree working interest back at some point, I've always called it kind of on the shelf assets waiting for an acquisition. At some point, we were able to accomplish that on what is the Oaktree working interest participation in our partnership with them has been a great partnership. It helped us to accomplish what we really set out to do 3.5 years ago, and that was to enter a new region and scale that region up more more rapidly than we would be able to do just on our own reason being the synergies and the ability to lower the operating costs. It was a higher and more concentrated geographical presence was important part of entering a new region. So Oaktree and their and their partner. And we're great partners we were able to accomplish that home, but it was a great time for us to acquire this asset. And this is a very, very accretive and synergistic opportunity for us. And we're paying $386 million net purchase price, which represents about a PV. 17 on PDPP. for future cash flows and strip. It represents about a 3.1 times multiple. If you remember back in December, we talked about the the asset sale. We did it at almost a six times multiple and being able to take some of that liquidity and really reinvest it back into an asset at three times. That is a great trade-off for us. And so we created a liquidity at six times and we're reinvesting at three times, which is great. These assets are very synergistic. And what I mean by that is we operate them already. We have all the backroom operations and G&A for these assets already embedded in our numbers, and we've operated now for 24 months. So we have a very good handle on the operating procedures and the metrics and the and the stability of the assets. And they're already on our IT systems. They already really factored into our existing debt profile. We shared an ABSO. three back in 2022 on the volume assets on all of these assets are already in our emissions reporting. So they won't result in any additional emissions or emissions intensity or anything like that because they were already in our numbers. And so that's all very positive attributes of the acquisition of the acquisition, we're adding about 122 million a day of natural gas production. That's very, very relevant from the standpoint that that is essentially covering decline rates into 25. So we won't have any reinvestment rate that would be necessary just to hold production flat in the 2025.
Are these are heavy or heavy margin?
65% EBITDA margins on these assets don't contribute 100, 26 million of EBITDA in 20 and 2024. And the return on these assets was $462 million. Again, we've bought these at a PD. 17. This is a very, very strategic asset for us. It was the best asset we get behind this market. The one thing that we wanted to do was if we're going to acquire this asset, we definitely don't want to wait until 25 and 26, which we believe will have a an increase in natural gas prices as the export facilities start to come online, we didn't want to wait and have to acquire that asset in a higher price environment. It's a very strategic asset for us at this time in our company.
Moving to Page 19. Again, adding scale, you can see where these assets are located. Obviously, we already operate and own 51% of the same assets, but we are increasing our exposure, very importantly to the Gulf Coast gas pricing, even though we don't, in essence sell to these export facilities we are a benefit we do benefit from the pricing that comes along with the index basis basis differentials on the Gulf Coast. So now we operate all these assets 100% of the production belongs to us. And we and it gives us more scale in our marketing activities for this gas. So all in all, very, very strategic acquisition of 82% natural gas, all the assets in East Texas in Louisiana, our natural gas assets with some natural gas liquids or if they go on with them, the Capstone asset in Oklahoma now belongs back to us at 100%, which gives us some flexibility on the ABS that we did with Oaktree back in 2022 to extract additional equity value and liquidity out of it at a point in time in the future. So all in all, a very strategic acquisition.
If you move to page 20, and you can see how this benefits us. No 2% reduction in our unit costs from 15 million in cost efficiencies that we see across the portfolio with the G&A addition required. And we increased our 23 reported margins to 54% from 52. We see a significant amount of Smarter Asset Management opportunities that we can now take advantage of because we own 1% of the asset, and we can reinvest in a way that's meaningful for the future. And then the system integration is next to zero risk. We essentially will do nothing more than flip the working interest in our accounting system from Oaktree to diversified. That's essentially the only one IT systems integrations that need to take place here. So it's a very simple operating procedure to get these assets removed from Oaktree and put back on to diversify its working interest on Page 21. This is a very important factor on we as part of this transaction. We're innovating there, 20 Oaktree's 2024 hedges that they have on their portfolio for their assets that they owned, Tom, for their working interest at $3.89, which represents almost 100% of the gas production in East Texas and Louisiana. That's a significant uplift for us in our Company represents approximately 60 to 70 million of value in 2024. It will increase our average floor price. As you know, 25% from the three oh nine. Tom provided the 10% uplift to a pro forma average price for 2024. And more importantly, there's no hedges only 25 and 26, which gives us some optionality. I truly believe that 25 and 26 that the price of natural gas will rebound pretty strongly as the uncertainty around the on the natural gas export facilities it take place and the prices will respond to that. And so that does that gives us some optionality. We will hedge some of that 25 and 26 exposure, but we will definitely leave some upside to leg into the prices, we believe come rebound next year.
And then just the risk on our acquisition multiple by having these hedges, the hedge book that we're bringing in from a from an embedded perspective from their from their working interest percentage. So all this money in the money hedge is highly accretive and two are asset acquisitions. And as we move to page 22, I spoke about this a minute ago that the increased exposure to premium Gulf Coast pricing. I do believe that the price of natural gas in the US is going to be highly fragmented between basins in this basin, the Gulf Coast is going to have to invest or have the ability to have the best pricing because of its exposure to these natural gas export facilities, you can see the math there, the ones that already do exist and then the ones that are coming online in the next year year and a half. And by the end of 26, we could see 20% to 25% of our current U.S. production being exported, which is significant and I believe will underpin the gas price for a long term long time into the future. We have all the takeaway we need. We're currently working on different markets of some different operational projects within the region to get more gas behind on our own facility operating facility down there that will give us higher natural gas liquids exposure and increase the exposure or the amount of natural gas liquids. We're producing off of these assets. But all in all, you can see that this is going to have a big impact, gives us a lot more exposure to the energy or the natural gas liquids. It's export facilities and gives us a chance to link into some much higher prices over the long haul.
And then on page 23, I want to remove and bring some light to this. We've seen a significant amount of merger called merger mania in the US over the last six to 12 months. I don't think just by accident, we're seeing a lot of a lot of interest levels in the institutional investors calling for fewer companies, bigger, bigger companies with bigger balance sheets, more stronger balance sheets and more drilling inventory and such and really, I believe, is going to expand in and today, each company having a more being more exposed to different basins than just the one that they're currently in. This is taking place as we speak. You can see some of these public-to-public transactions that have occurred, not all have closed yet, but they've all been announced we've seen some seen some private to public transactions occur over the last and several months. These are 200, 15 billion in corporate transactions over the last 12 months, 16 billion of those have been natural gas weighted deals. I do believe that the natural gas companies will continue to do to emerge over the next several months. And we know there's a backlog of mergers out there that will become defined over the next several months, and we will look to that as a thing.
A couple of positives, which I'll talk about one of the things that's really interesting is if you look on here that if you look at our sector, the sector, the UK year to date of approximately down 19%, the US is up 3%. There's a dislocation between the two markets in terms of value being attributed to public E & Ps. It is a very important factor that as we get more and more exposure to US institutional investors that we will see that hopefully trickle back towards where the US peers have been from a year to date perspective, this historic consolidation. We haven't seen this kind of consolidation in our industry since 1990s, but I'm really liked about it is that the big companies combined the amount of divestitures that is going to be required by the SEC to close these deals is going to be significant. And I've said it to the degree that there will be large companies generated and built off the divestment of assets of these big corporate mergers, which leaves us in a very good position as we move forward to be more fine for these assets. And we'll talk about this in a minute and talk about 2020 for a lot of it will be generated through institutional investors requiring it. But I truly believe that the market is calling for this because the fewer companies, capital availability will be harder and harder to come by as time goes by and being larger, bigger balance sheets with access to capital markets is extremely important. So we'll continue to see this. And I wouldn't I wouldn't rule out a diverse, diversified being involved in something like this in the future as we go forward.
Looking for merger partners that can grow and scale this up over a period of time.
And with that, let's let's turn to 24 and talk about 24 and some of the highlights that we put in our RNS this morning, and I'll start here on Page 25. Yes, we see this until 2024 being renewed a renewed emphasis on our business model and our strategic plans that we laid out over the last seven years, we want to get back to free cash flow generation through unlocking hidden asset value in the portfolio in the assets that we've acquired and enhancing production and enhancing our revenue using our hedging hedge book and our hedge strategies and growing through us accretive growth and driving scale to the operation, which again has impacts on our margins, although lowering our cost across the portfolio, maintaining financial operational flexibility, we've been very successful in finding ways to access capital outside the normal needs, which is typically in this industry is RPLs and high yield. We've been able to find other ways to do that, whether it be through value-creating asset sales or through the ABS transactions. And then in the amortizing debt, some of these are have been been ways that we've been able to be successful in finding capital to grow and to run our business. Also, we have a we're going into 24 with a heavy heavy cost optimization plan and being able to continue to drive down cost in a very low price environment on the vertical vertically integrated business. And I think what Brad said earlier about technology is a big part of that. We need technology to be driven further into the to the operational base and finding ways to use it to our advantage to lower costs. We'll continue to do that and then have our sustainability and the innovation that we've deployed there. We are best in class. We'll continue to invest and find ways to not only to identify but also to reduce and mitigate our emissions over the long haul and call our Focus five. This is where we're setting our business up for the future. And from this point forward, these things will be the focus of our of our business and they will be part of our everyday plans, discussions and operations.
And flipping to page 26, talking about our capital allocation framework. Obviously, we talked about it on a slide at the beginning, the last seven years, we've paid up close to $800 million back to our shareholders is significant. We've done a fabulous job of creating a very resilient, resilient business that we've been able to increase cash margins, drive cost synergies, increased cash flows, and we've and we've rewarded our shareholders with that. And one of the things that we decided as we look at our Focus five, and we've as we sit here today, we want to be able to be and the dividend has been the way that we return capital to our shareholders over that period of time.
The reallocation of the recalibration of our dividend that we announced this morning was for a purpose other than just the at reducing the dollar payout of the dividend. It was really to be more holistic in the way that we look at our business and the way that we reward our shareholders. And we know as we move forward with new US institutional investors and but also even with our UK investors who we've been extremely grateful for and continue to hold in high esteem, we want to be able to be a more holistic approach to this assure shareholder allocation framework. We want to be able to reduce debt. I think it's extremely important. We've seen very low price environment, we need to be focus on the balance sheet and continuing to reduce the overall levels of debt on the balance sheet. And as we do that increase in NAV value, which is equity appreciation for our shareholders. And so we'll continue or really allocate some of that cash for that. We want to pay a meaningful but sustainable dividend. We announced this morning that the dividend where it's been said that it is sustainable for at least the next three years. If we do nothing else in the business, it doesn't mean we can't grow that over a period of time. We've grown the business pretty substantially, but where we are today will be sustainable for at least the next three years.
Somebody asked me well, what about years, four and five, we really focused on the next three years and how we focus our business. That's how we forecast our business and what can happen in three years. But that is a sustainable dividend that is achievable for at least the next three years with the business where it's at, we want to be able to reallocate cash and be more strategic in the way that we repurchase shares, you probably will see us put some type of share repurchase plan in place. That will be just kind of what we've done on the show will give our share repurchase program over to our to our brokers, allow them within certain guidelines to buy shares on a daily basis and keep us out of restricted period that here's the guidelines, here's the framework survivals and falls within that, and you'll see us to redeploy cash into that over the next several months.
And then fourth one thing that kind of has gotten lost over the last three, four years, I believe, is just the all the way that we create value for our shareholders. We've got a growth business, we've got to be able to redeploy cash going to be able to cover our decline rates. We're going to be able to grow our production and our revenues to be able to be successful long term. And so we're going to be able to do that now and have excess cash to assist in that in that methodology. In fact, the deal that we announced today, the Oaktree deal, a lot of that purchase price will be be able to be funded through what we're saving on the dividend over the next 18 months. So just gives you an idea of how we're going to redeploy cash. And you can see number one, we're still going to be in a very, very strong. I'm quartile as it relates to our position, our peers, but also in our US peers will be at the top of our US peer group in terms of dividend yield at current price.
And so turning to Page 27, I'll just I'll end with this, and then we'll open it up for some questions. Our 2024 action plan, we will reduce debt. And now that the acquisition will entail utilizing some of the purchase price will be through a leverage. Obviously, we'll take back the ABS structure and from Oaktree, which will add about 120 million, along with the deferred payment of 90, we'll put us that would be, but not a lot of that 90 will be paid off using the free cash flow that we're generating from the recalibration of the dividend. So we will reduce our overall borrowings by $200 million this year and continue to decrease overall leverage our fixed dividend of which we've said this morning is sustainable over the next two or three years. We want our investors to know that we also want them to know that the dividend yield is in the top quartile in the UK, but it will be above in the U.S. Our existing U.S. peers on the strategic share repurchases. It gives us the ability, we will conduct strategic and regimented buybacks and instead of buying on days or kind of tender offers. And we're just going to set a strategy and it's going to be deployed on a daily basis from here to going on in the future on engine orders continue to buy back shares until May. Until then, the value of the shares doesn't make sense to buy anymore. So that will be started as soon as we're able to start buying back shares again.
And then lastly, this on three acquisitions was a a big opportunity but it's also a big strategic move for us in 2024. We will continue to see that benefit our numbers and our cash flows throughout the year and into 25, but we'll continue to be very on, I would say picky, but where we're going to be watching for acquisitions and trying to be strategic in the way we look at them on a going forward basis of increasing the scale and access to premium-priced markets. So that's our 24 action plan. We will pay down debt. We will pay our fixed dividend for the next three years at this level, regardless of we don't even acquire another asset and we'll be strategic and regimented in when we buy that shares and will continue to be active on the acquisition front as if they make sense.
So with that, I will stop and I will turn it over for of questions.
Question and Answer Session
Operator
Yes, operator, if you could open the lines up for Q&A, please.
Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you'd like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, you may press star and two if you'd like to remove your question from the queue participants using speaker equipment. It may be necessary to pick up your handset before pressing the star case.
Ladies and gentlemen, we will wait for a moment. While we poll for questions.
Our first question is from the line of David Round with Stifel. Please go ahead.
Thank you. Good morning, guys.
Thanks.
Thanks for the call and thanks for the detail.
You provided so far.
Can I just ask a follow up on the acquisition? And are you able to talk about payback at all focus?
No multiple will give us a good steer, but I'd be interested in the point at which you'll be generating incremental cash from this deal, please?
Yes, Dave, this is Brian. Thanks for the question. As Rusty indicated, we've shown at 3.1 multiple on a on a cash basis, the of the assets generate a sub four payback period. So again, for all the strategic requirement and probably strict strategic elements of the transaction, the financial ones or equally as compelling.
Okay. Great.
And the follow-up just separate sort of per area. I mean, I know a lot of shareholders have been asking you took the recipe to reallocate cash from the dividend for a while. I mean whether that was to buybacks to debt reduction or even to M&A. I mean, I think you alluded to the freedom that this is going to give you on the capital allocation slide. I'm just interested how much was the previous situation just distracting you from concentrating on value creation?
Well, a dividend recalibration is never a situation that you want to really think about. But at the same time, as we started looking out over the course of the next 12 months and forward on it was apparent that the share price wasn't going to respond appropriately to price the dividend in the shares. And so if it's not pricing it's been for us. We need to create that. We need to create value to get the share price where we believe it needs to be. And that is not reflective of the true value of the Company right now. I mean, so we want to be able to on the back end of this, we're going to go into the U.S. markets. The institutional investors in U.S. and we're going to hit them hard over the next several months. And we believe that getting this us in terms of the it was it was essentially impossible to get a meeting set up until we got this dividend yield in place where it made sense. I mean, people in the U.S. We'll look at, say, a 30% dividend yield or we talk to you for now number one, we've got a recalibrated recalibrated dividend that's not only affordable, but also sustainable over a period of time just gives us entry into the U.S. markets. Now where we can go in market, I'm confident in what we're doing, but also be able to sell this Oaktree acquisition because I'm telling you people are giving enough attention, but it's a substantial accretive value to our company. And it was extremely important to me. It's been extremely important to me since the day we bought that we entered the agreement, I knew it was an inventory of assets for us to acquire back so long. So again, the distractions over, you know, we've we've done extremely well for our shareholders and which I'm a big one. So when you're a big shareholder, like I am now, these decisions are never easy, but there there's a right move. They take put our company in a position to be on the offensive going forward and being able to buy back shares and really do things that we probably could have done previously. So I think it's this is when we look back a year from now, I think we'll see a lot of potential on upsized upsize that we didn't have coming into this his presentation so I'm pleased. I think we're going to see a big opportunity set going forward, gives us have more flexibility around acquisitions and the ability to take advantage of that. But more importantly, to buy back shares and doing other things other than just paying straight dividends, I think is a big big plus for us moving forward.
As Dave and I would just add with all the discussions that we had a senior senior management or at the Board level, the results show that the company and our teams were not distracted. I mean, I think that's an important factor that we continue to produce good results, great results in many in many respects throughout the Company. So we addressed it at the at the appropriate level we ensured that our business model is sound and the results show that.
So we're real proud of that part.
That's really helpful. Thanks.
Sure.
Thank you.
Our next question comes from the line of Matt Cooper with Phil. Please go ahead.
Thank you very much, and thanks for the presentation. So first question is on post the closure of the Oaktree deal are you able to give a bit more color on how you expect to reallocate the EUR110 million a year between paying down debt buybacks and M&A. So for example, should we expect this year is buyback Quantum and to be similar to the one in 2023?
Yes.
So obviously with $110 million of reallocation yes, I think it's going to be we have multiple we have a multitude of options there. And as I said, I think we'll probably set some regimen and share repurchase program in place. And we have, I think, about a 10-day period of time here under SEC rules where we're kind of locked out. But as soon as that back up and you'll probably see us set a regimented program in place. And that could mean for the full year could be anywhere from 3% to 10% of the total shares. I mean, eliminating less than 3%, let's just say with that, I'm now going to be set based on the parameters. And if those parameters are exceeded, then we will buy back shares. I'm not a big proponent of buying back shares just to be buying that back, but what the intrinsic value of our of our shares, our are undervalued. And I think it's a good use of cash. So I would say them anywhere from 3% to 10%, it would be a regimented program that will be on tender offers. And this kind of thing that I'll tell you why I'm having problem with tender offers. But the problem with it is it's constantly and I'm going to spend 1 million. They have to do a tender for privately that they may have to buy back our shares. And so the programs these tender offer programs are just extremely expensive because of the work that you have to do charities and advisers and those kind of things to get it all set up. So I would say somewhere between 3% and 10% of the shares on a bulk of our fix in sustainable dividend, and then we'll continue to pay down debt. We've set a goal of $200 million quantum of the debt for the year, depending on where the share price is where we are. The program comes in Adams. As it relates to share repurchases, we may go, we may do more than that. We may we may see a period of time here where it looks like selling direct structure like we did previously makes sense, and we may even do more if the prices I've said all along. If I could sell. The whole company is six times I would. So it's not a situation where, you know, that's a bit to us as of just a great asset sale where you could sell something for six times. So all of those things are really playing into my mind, but that $100 million will be focused on shareholder return.
Got you.
That makes sense.
Thank you. And then I just wondered if you could give an update on the current state of the US M&A market in terms of, you know, the number and quality of opportunities? And also actually does the Oaktree acquisition also come with some undeveloped reserves?
Yes. Well, I mean, Maintenance segment first. Yes, we have undeveloped reserves already. Obviously, we own 51% of it prior to this acquisition. So we will see opportunities to do one of two things if prices rebound and when I say rebound is probably about three 50 on. There are opportunities for us in that in that acreage position to leg into some upside.
Okay. Whether it be through JVs, drilling ventures, whatever we have, the ability to And anything we add along that Gulf Coast is a benefit, okay? It's going to be a benefit as we move forward.
As it relates to the U.S. M&A market, we've seen it since it seems like most of the M&A has been these public mergers, um, and I think that will continue throughout the year, as I said before, but it's going to spin off quality asset divestitures from for these guys to close those transactions, the FTC. Federal Trade Commission will make them offload some of their assets that as part of that had those are not going to be bad assets or it will be really nice assets in some, I believe, recalibration of the deduction of the dividend and the capital returns was it important from the standpoint of being able to align ourselves with the ability to take advantage of that on a going-forward basis and again, know the mergers, the public market mergers is not lost on us and our ability to grow the Company in size and scale quickly to take advantage of a much more robust capital market situation. We're seeing high yield being raised in the US for the first time, probably in the last four or five years that at a high level, we're seeing equity being raised and we're seeing equity being able to be utilized for acquisitions. And I believe that having a larger and much more diverse, not only asset base but also investor shareholder base, it's going to help us to take advantage of that as we move forward.
That's great. Thank you, and I'll hand over.
Thank you.
Our next question comes from the line of Tim Brown with Denison Securities.
Please go ahead.
But again, some thanks for the call and very useful. So I just had a couple of questions on some of which have already been covered, but some And just on on trading liquidity in the state. So now I think and trading in the States roughly represent 50% of total traded volume. I'm just wondering on how and when and kind of in that struck us as they become involved here in the States. How do you see that kind of playing?
Yes, that's a great question. Let me let me say that we are surprised how quickly the level of trading picked up in the U.S. versus the U.K. total total shareholder share trading primarily because we didn't issue any equity in the US. I mean, we literally just opened up a structural listing. And then we've seen a significant amount of activity coming out of the US buying the shares across the platform. And we are we think probably somewhere between 30% and 40% of our existing shares probably are U.S. domicile holders, both from the buying that's occurred since December. And then the previous ones that we had on the register already. And some that's been a significant surprise for us. We didn't expect it to be this much volume this quick now what I would say is that every June, I believe it is the Russell 2000 Index a rebase itself and would put us in a position come June and to enter the Russell 2000. We hit the thresholds very easily. We're fully qualified Board. And all of our indications are that we will be entering that potentially in June.
Now to put that in perspective, and Doug can probably give you a better indication, but that's a significant amount of tracker volume. There's a big index in the U.S. with a lot of companies, obviously 2000 companies in it, but a lot of trackers involved in that. Doug, I don't know if you wanted to add anything to that.
Yes, just two quick points on that. I think one of the aspects that makes it really exciting for us is that one of the contingents that we really think will be a large ultimate investor from the U.S. perspective, is the small to mid-cap generalist and venture investors. So they are going to now have a company that's introduced to their benchmark that gives them energy exposure without a large degree of commodity price risk, and we've already seen a lot of engagement from that investor class.
The other aspect would be that there are going to be the knock-on effects of ETFs that trade relative to the Russell 2000 and a number of quantitative trading strategies that trade to the Russell 2000 or so in terms of the magnitude, it will have a meaningful effect and significantly more index trading than what currently goes on in the London market alone right now.
That's great. And thanks for that. And just to follow up on something different. And separately, I think you said on the M&A slide that you wouldn't rule out some comments, merger activity in the future. Just wondering what and what that might look like what sort of what are the kind of ideal characteristics of the merger part?
Yes. I would say that there's nothing really you know that I can pinpoint at this point in time and just know there's a lot of discussions between a lot of different companies going on across this spectrum. And if it for us, it would have to meet criteria had to be accretive, it would have to improve our business and improve up. But more importantly, nothing. This is the most important thing. Our free cash flow profile. We want to anything we do have to be accretive from a free cash flow profile and distributable cash flow profile because everything we do from here on out, we wanted to have the flexibility of spreading that cash across the four main pillars that we talked about in terms of shareholder returns. So on, I don't have one specific pinpointed, but I can tell you that there's a lot of discussions going on in the market.
And if it fits us and it improves our business and is accretive to our shareholders, then we'll look at it and some other benefits from a Foods merger transaction is scale and with scale comes access to capital, larger pools of capital, different types of capital that to date, we have not been able to access as easily maybe in some of our larger peers. So that's a big opportunity for us as well. We're gained scale.
That's great. Thanks, gents.
Thank you. Our next question is from the line of Simon Coles with First Berlin. Please go ahead.
Yes, good morning and thanks for the very informative presentation and thanks for taking my questions. Just got a couple from me. First of all of them, very interested, Rusty, what you are saying about the prospects for the gas margin, particularly we'll have particularly as it relates to LNG exports over the next five or six years or so. I mean, my understanding is that there isn't really much uncertainty over the next three years because you're talking about projects have already been financed. It seems to me that most of the uncertainty sort of kicks in around 28, 29. And Charlie, a lot of that relates to come the outcome the outcome of the next US election? Probably interesting color on your comment on that. And secondly, I just wondered if you could say something something more about the possible structure possible volume of the potential private placement you were talking about in the press release this morning.
Yes, let me talk about the which is Steve L & G's.
Yes, natural gas liquids in the LNG export facilities. But I would tell you about that is that currently the ones that have been approved and that are in process to your point are represent about 2025% of the existing production in the US today, we have very strong into and which should put a floor under pretty much the prices as we move forward. On the ones after that. What I would say is yesterday, there's of things going on as Sarah in Houston, Sara, we could call it the energy secretary under Biden made a comment yesterday that this slowdown in permitting for new export facilities, she made the comment that by this time next year you should see that go up and that those should be opened back up now. That's her speaking. So I would say this you probably, you know, Intuit is anybody runs also, John Fidessa, yes, Houston facility probably back in the call.
Correct. And so I think we'll see that open back up. Simon in then the floodgates will open because there's going to be a significant amount of those additional export facilities permitted and moving forward, which again increases the amount of export capacity further. And I think that although I don't necessarily believe that the election is going to have much of an impact on that one way or another up another big positive event that occurred yesterday was that Senator?
From West Virginia?
Joe Manchin made a comment at zero that there has been significant bipartisan support. And they've made headway on improving bidding and regulatory bill, which is probably more important than the export moratorium because we need infrastructure in the U.S. to move gas around it and get it to the six port facilities. So I think that, you know, between that in the bill are related to the permitting of the export facilities and the permitting and I think that that is a going to have a massive impact on the stability of natural gas prices in the US as it relates to the private placement, what I would say is that it's an option for us. We've been looking at it for a while is liquidity. If we didn't want it would be liquidity enhancing.
No, it's been a very active market in the US here in the last year, lots of opportunity set and a lot of capital providers providing this from just an option on the table to us and then see it if it was something that we is that and to utilize that we would have informed the market of it make sure, but it was it's just an option in along with it did sales and other things.
Okay.
Thanks very much. That's very helpful.
Your next question comes from the line of Noel Parks with Tuohy Brothers. Please go ahead.
Hello, good morning.
Good morning.
I just had a couple.
I did want to turn for a moment to on the work you've done on emissions, so detection and mitigation, and I'd say over maybe a year, 18 months ago, many companies were talking a lot about their efforts, and it feels like come that has sort of slacked off. Maybe consolidation is more of a topic. So I wonder if you could just talk about some of and the efforts you've made, where you view yourself as being more rigorous than many of your peers Yes. Well, just said, yes, there has been to my to my knowledge, there is seems to be that there has been a slowdown from a lot of the industry in terms of how they're approaching this on a going forward basis. What I would tell you is there's no slippage on our part. We believe that it's the right thing to do. We've always thought since we announced our program and what we're going to do back in 2022, that and this is going to be a big part of our business going forward, honestly, reducing emissions is good business for us. It is we're selling more gas because of it. So it's not become less of a situation for us. Brad, go ahead and you want to add something there.
But yes, I mean, it is a comprehensive approach that we're taking and that comprehensive approach starts in our Board room. And it goes all the way up through our organization and our employees have really embraced all of the efforts and programs that we've done and it's showing up in our results. And so we are we're asked to wear boots on the ground at the ground level with diminished detection devices. And we're really sticking to that. The philosophy we've had since we listed the company that back in 2017. And it's very simple if we find a leak, we repair it and with a 98% leak free rein on our well, it's we're proud of that but it's showing showing the fact that all the efforts we're doing or our producing some very good results, and we're going to continue continue on that path. We're still committed this year with our pipeline flyover program.
The other thing I would tell you, too, is as part of our focus five, where we talk about sustainability innovation, we're working with some technology partners to deliver solutions and these technology partners, they all want to work with us one because we've got some very good resources and leadership in the space of our team to we've got a awards set of assets that we can work with. And three, we're showing the fact that we're open to and making making a tangible investments into that space. So we think that there's going to be a lot of innovation occurring in emissions mitigation, and we're working good right there on the forefront, you continue to improve our results.
Great. Thanks.
That's really interesting and on, you know, you did mention that you first of all, just more things to do as far as cost optimization heading into next year.
And Dom, you mentioned that some of that was definitely going to be technology driven and any other things sort of operationally that you kind of have on your radar for making improvement?
Well, we're constantly reviewing the cost in our business, whether that's field cost through our Smarter Asset Management program, where we're looking to eliminate unnecessary compression, consolidating pipelines and improved route efficiency and technology is one area that we're looking to do that and really understanding what well the real district profitability is to recall across all of our different assets. We've developed some new tools here recently, where we can deploy too far through our field teams on their phones on their tablet on their PCs. And they've got immediate visibility into all the profitability and production characteristics of the businesses and their operating. I mentioned it earlier. We've got one source of trusted information that with all of whether it's in my chair, once again on a truck we're all looking at the same information that allows us to make some good business decisions. So so we're constantly looking at field op cost optimization, but we're also looking at our G&A costs as well. This Oaktree acquisition is going to give us some great cost efficiencies by bringing in a lot of volume, a lot of revenue, and we're adding zero expense or additional costs to our G&A structure. And then we feel we're continually looking at our G&A structure where we can drop technology in that area as well to make our processes more efficient. So it's a yes, it's a continual project that we have going on. And it's an area that I'm really focused on bringing a very disciplined and targeted approach to reviewing our.
Great. Thanks a lot.
Yes.
Thank you. Our next question is from the line of Alex Smith with Investec. Please go ahead.
Yes, morning, guys. Thanks for the call. Just a question really on the strategy following the Oaktree deal and given the current liquidity and the dividend cut and the focus on debt reduction and just the timing of a 400 million acquisition against that backdrop or was it more?
This deal was too good to pass and there was a timing element there and the focus is now on what diversified was two or three years ago where you could maybe be a bit aggressive on the M&A front? Just trying to understand that against that backdrop of focusing on debt reduction, but then leveraging up for the deal would be good to kind of hear a bit more color on that, please.
Yes.
Well, we don't do deals just to be doing and we don't look for a window to do them. This is a deal that's been kind of out there for several months. We've been working it hard over the last several months deals are never easy. They don't just materialize overnight. You have to work them. You have to massage them. You have to be, you know, on the cones and and really trying to garner some leverage in ITO relationship. So this deal has been out there for a while and I've been talking about for several months. It's not like it's something that just popped up all of a sudden, the timing of it, I think was was a permanent because obviously going into 2024 and the one, I think when gas prices to rocket up late in the year and into next year than we had this asset becomes that much more expensive. And so this will that this is the prime time to do that but the recalibration, the dividend and an acquisition has nothing to do with each other. And it just happened to happen at the same time, but they have nothing to do with each other. This was something we were going to do regardless because we're trying to set the business up for long-term success and long-term value creation. And this was the time to do it. And so we're take we're taking our strategy across more shareholder return pillars versus just focusing on one thing all the time, which was dividend. We've now have an opportunity to go into the 24, 25. We know now that we have our production declines cover and we know that we have the ability to be more focused on growth in the business going forward and we have the ability to buy back shares. If the shares are the intrinsic value, the shares is not where it needs to be. We have more options now than we had previously. And this just gives us the ability to go out and be more aggressive on all those fronts.
And also I'll also add that with our relationship and now all the back office administration support that we provide. Oaktree do provide entry. We have good visibility into their into their hedge book in into help they've protected the cash flows and they got it. As we've shown, they've got a very attractive hedge price that we're going to be able to benefit from a 24. But also there are they do not have hedges in place for 25 and 26. And so that's a great opportunity for us as the contango in the curve is providing some much stronger prices than what we're seeing here in the back half of 24 that we see that we have the opportunity to leg into higher prices. So for all the strategic elements. We talked about higher volumes, Gulf Coast access. The financial attributes were were good as well. And so those were other reasons that we felt like this was a great opportunity to do this transaction.
One other thing, Alex, I would just add to this to maybe put a bow line on branded Rusty's commentary is really the fact that as we've demonstrated that everyone has seen from the results that we posted today. We continue to provide reliable production and consistent cash flows. And so when you look at the acquisition that we added to our portfolio today, it was really was a win for diversified at the end of the day to bring in an acquisition that has the efficiencies that we're going to be able to general, but at No, very clear.
Thank you, guys.
Just a quick last one just on you mentioned noncore asset sales potentially. Could you highlight a little bit more color on what they could be or is it still kind of in the early days now that we're I don't know if I would say not some core.
I would just say that if it did, we would potentially look at an asset sale. If it fits the criteria that we saw with the one we did in December, we're selling an asset for way more than we would be able to sell it to a third party operator under an institutional type sale structure where liquidity is and significantly enhanced and where the we can reinvest it in a much lower rate of return or lower multiple asset when we're acquiring it.
So I think that's all I mean because you could sell at six X, but reinvest FOREX. Again, that's an opportunity for you.
Absolutely. And looking first at the asset sales that we did in December at six times, keep in mind, we were talking to Oaktree about this asset purchase at the same time. So it just wasn't because we sold it just to be selling it. We knew that we had an opportunity here to buy that much either smaller multiple than what we're selling these other assets.
Got it.
Thank you very much, Jim.
Yes.
Your next question comes from the line of Mark Wilson with Jefferies. Please go ahead.
Hi, thanks. Good morning, gents. I'm looking at your your the results this morning. You give it very clear three year set of annual numbers, and that's in the press release, and it's quite clear to see EBITDA very constant gain up towards five, 50 free cash flow around the to 20 million and leverage within that target range of two points 2.5. And so an investor looking at that could be forgiven for saying what's changed and led to the reset of the capital allocation. And if I go back to COVID times, you've seen volatile gas prices before during COVID. You didn't blink with the the dividend and that continued. So I'm going to reflect on that and say and ask what has changed? Is it the commodity price? Is it the cost of debt expect the 200 million of maturities to pay off and you speak to maintaining the leverage level, which you actually have maintained. So could you speak to what has changed, please?
Thank you.
Well, Mark, it will be is what's what's changed is what we plan on doing for the future. Look, we're sitting here today trading at a 30% dividend yield. I can't get institutions to discuss future investments with us because they don't want to take the calls when you're sitting here at 30%. Obviously, analysts and institutional investors weren't willing to say, look, the dividend, obviously is that we're getting doesn't need to have a higher share price and so it wasn't being factored into the share price. But more importantly for us, I think we're really care about that. At the end of the day, we want the ability to grow the business mark, long term, we're paying out a level of cash that was restricting our ability to grow the business on a long-term basis. And this is not a business where you just sit there and run it off, you have to grow it over a period of time or sell it better to options and so on, we pay you can still sell it, but now we're going to be selling it out in place of strength going forward, having the ability to have options and be able to buyback shares.
Mark, when it when it makes sense. And when you're in the types of dividend you're buying back, shares looks pretty attractive. And so it wasn't anything to do with, you know, can you sustain that or whatever we can sustain that. We could have done another year to probably, but we've had sell assets and create liquidity in other ways to do that. But that to me was just not the right way to operate the businesses. Let's make the decision that it makes the most sense strengthens the balance sheet strengthens our cash flows to have options and ways is to return capital to shareholders other than just a pure dividend. And I think as we especially as we go into the U.S. and get more and more shareholders in the U.S. that's going to become very, very important from a 32 dividend you would have given us an audience with U.S. potential investors.
Okay, that's clear.
Thank you.
Very much. And then could you give us an update on where we're at, if there indeed is anything to say with the that congressional letter situation?
Yes.
So the congressional letter we responded to it back in January. I believe it was first second week of January. We were very on descriptive in arm and what we do. We've had a couple of calls with them. And we're actually I think correct me if I'm wrong, we're going to even provide them a lot of the data of the things that we've done. And so that's become it's less and less of an issue. And I don't foresee us really having any other type of, you know, inquiries. And let me make this very clear because people use the wrong wording. There was in fact, use the word investigation and inquiry. It was noted that it was purely a letter asking for information and there was no, honestly, we didn't even have to respond. There was no requirement, but we did we knew we had a positive message that we were doing the right things. So yes, we're going to respond and we're not we're not trust. And I do think we do all the right things and we had no problem in letting them know, the things that we did generally took it as an opportunity to engage with that committee.
They've been very appreciative of our approach, and we're appreciative of the education that we provide to them. And so it's been a it's a positive engagement.
Yes.
Thank you very clear.
Thank you.
Thank you. Ladies and gentlemen, as there are no further questions, I would now hand the conference over to Rusty Hudson CEO for his closing comments.
Yes.
Thank you all for coming today.
I would just like to add and weigh out on that. We are very proud of the year that we had in 2023. I think it was strong of the operational performance and really wanted to just give accolades to our employees that are on the ground every day, operating these assets. They did a tremendous job in a very low price environment. We tell them don't worry about price as you operate the wells and get the production. We'll worry about how we manage pricing and be able to get the revenues that's necessary using our hedging strategies. But they did a fantastic job. 24 is going to be really, really good year for diversified. It does. Asset acquisition has a lot of scale. A lot of revenue has a lot of free cash flow. The recalibration gives us a lot of options that would have been more difficult without it. We will buy back shares. We will have a sustainable dividend over the next three years or at least the next three years as we stated, we will pay down debt. So we're going to do all of the things that people think that we can't do. We're doing them, we will do them. And I'm very excited about the options in the US. I think that the Russell 2000 indexation that's out there in June will be a big catalyst for the Company and the stock. So we appreciate the support of our investors and appreciate your time today on the call.
Thank you.
The conference of diversified energy has now concluded. Thank you for your participation. You may now disconnect your lines.
