Diversified Energy Co. has executed a supply agreement with a Gulf Coast LNG facility under which it will supply approximately 40 Bcf for a three-year period. (Source: Shutterstock, Diversified Energy Co.)
Diversified Energy Co. has executed a supply agreement with a Gulf Coast LNG facility under which it will supply approximately 40 Bcf for a three-year period.
Diversified said the agreement, announced Oct. 23, will use a fixed pricing construct indexed to Gulf Coast pricing. The company did not name the Gulf Coast LNG facility it inked the deal with.
Diversified also said it has taken advantage of the recent strength in natural gas prices to add to its multiple-year hedge portfolio in 2025 through 2027, with an average Nymex hedge price of approximately $3.45/MMBtu.
The company said it would provide additional disclosures and an updated hedging schedule during its third-quarter 2024 trading statement.
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.
"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,” CEO Rusty Hutson Jr. said. “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.”
Hutson said the agreement reflects the critical need and strong global demand for natural gas and the importance natural gas plays in powering global economies for decades to come.
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