Ladies and gentlemen, good morning. And welcome to 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.

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.

Thank you, Doug. I appreciate it. Real quickly, just to kind of 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 2023. 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 a 2024 strategic outlook for the remainder of the year. So, with that, I'll go to page 3 of the presentation pretty and start there. Just want to say that we’re pretty proud of our year in 2023, the strategic successes that we had. It was a great year for diversifying a very challenged commodity price environment. We'll talk a little bit about this, but our hedging program and 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 three some of the highlights that I'd bring to note. Keeping [ph] the production was strong through 2023, 821 million a day natural gas production on average. We continue to see very resilient decline rates as we held it under 10% again, which is the key to our success long-term is the mature producing assets that we operate, which gives us the ability to hedge and be successful with cash flow profile. We had $543 million of EBITDA for the year, which was a record for us. Net debt at 2.3, again, within the margin of the two to two and a half that we talk about with our investors. Cash margin strong at 52%. That has been a stable since 2017.…

All right, thank you, Rusty. It's good to be back in London and it's good to be back in a financial leadership role with our company. I 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. I'm 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 re-engage 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 nine. 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 sixth year in a row with 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 in the 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 86%, 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 for Mcfe, and our operating cost improved from $2,022 to $1.69 for Mcfe. In spite of a very challenging commodity price environment, our assets…

Thank you, Brad. And I'll be speaking from slide 18. As you guys have seen this morning, we made an announcement of a strategic acquisition, which really should come as no surprise to anybody that's watched the company for any period of time, as I've been 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. The Oaktree working interest participation and our partnership with them has been a great partnership. It helped us to accomplish what we really set out to do three and a half years ago, and that was to enter a new region and scale that region up more rapidly than we would be able to do just on our own. Reason being the synergies and the ability to lower the operating cost with a higher and more concentrated geographical presence was the important part of entering that new region. So Oaktree and their partner were great partners. We were able to accomplish that. But it was a great time for us to acquire this asset back. This is a very, very accretive and synergistic opportunity for us. We're paying $386 million net purchase price, which represents about a PV17 on PDP future cash flows and strip. It represents about a 3.1 times multiple, and if you remember back in December, we talked about the asset sale we did at almost a six times multiple and being able to take some of that liquidity and reinvest it back into an asset at three times is a great trade-off for us. And so we created liquidity at six times and we're reinvesting at three times, which is great. These assets are very synergistic.…

Operator, can you open the lines up for Q&A, please?

Thank you. [Operator Instructions] Our first question is from the line of David Round with Stifel. Please go ahead.

Thank you. Morning, guys. Thanks for the call and thanks for the detail you provided so far. Can I just ask a follow up on the acquisition? Are you able to talk about payback at all? Because I know a 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, David, this is Brad. Thanks for the question. As Rusty indicated, we've shown a 3.1 multiple on a cash basis. The assets generate a sub-four payback period. So again, for all the strategic requirements or for all the strategic elements of the transaction, the financial ones are equally as compelling.

Okay, great. And the follow up just went to a separate area. I know a lot of shareholders have been asking you, particularly Rusty, to reallocate cash from the dividend for a while. I mean, whether that was to buy back 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, it was apparent that the share price wasn't going to respond appropriately to price the dividend into the shares. And so if it's not pricing it, then for us, we need to create value to get the share price where we believe it needs to be because it's not reflective of the true value of the company right now. And 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. We believe that getting this behind us in terms of the -- 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. are going to look at it, so you got 30% dividend yield. Why would we talk to you? But now, number one, we've got a recalibrated dividend that's not only affordable but also sustainable over a period of time. This gives us the entry into the U.S. markets now where we can go and market, be confident in what we're doing, but also be able to sell this Oaktree acquisition because I'm telling you, people aren't giving it 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 that we entered the agreement. I knew it was an inventory of assets for us to acquire back. So, yes, the distraction's over. We've done extremely well for our shareholders, which I'm a big one. So when you're a big shareholder like I am, none of these decisions are easy, but they're the right move. They put our company in a position to be on the offensive going forward and be able to buy back shares and really do things that we probably couldn't have done previously. So, I think it's -- when we look back a year from now, I think we'll see a lot of potential upsides that we didn't have coming into this presentation. So, I'm pleased. I think we're going to see a big opportunity set going forward. It gives us more flexibility around acquisitions and the ability to take advantage of that. But more importantly, buying back shares and doing other things other than just paying straight dividends, I think is a big, big plus for us moving forward.

And, David, I would just add with all the discussions that we had at senior management or at the board level, the results show that the company and our teams were not distracted. And I think that's an important factor that we continue to produce good results, great results in many respects throughout the company. So, we addressed it at the appropriate level. We ensured that our business model was sound and the results show that. So, we're real proud of that. All right. That's really helpful. Thanks, guys.

Thank you. Our next question comes from the line of Matt Cooper with Peel Hunt. Please go ahead.

Thank you very much. And thanks for the presentation. So, the first question is post the closure of the Oaktree deal, are you able to give a bit more colour on how you expect to reallocate the $110 million a year between paying down debt, buybacks and M&A? So, for example, should we expect this year's buyback quantum to be similar to the one in 2023?

Yes. So, obviously, with the $110 million reallocation, I think it's going to be, we have a multitude of options there. As I said, I think we'll probably set some regimented share repurchase program in place. 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 opens back up, you'll probably just see us set up a regimented program in place. And that could, for the full year, it could be anywhere from 3% to 10% of the total shares. I mean, what many less than 3%, let's just say that. Now, it'll be set based on the parameters. And if those parameters are exceeded, then we won't buy back shares. I'm not a big proponent of buying back shares just to be buying them back. But in what the intrinsic value of our shares are undervalued, then I think it's a good use of cash. So I would say, anywhere from 3% to 10%, it will be a regimented program that won't be, tender offers and this kind of thing. And I'll tell you why. I don't have any problem with tender offers, but the problem with it is it's costly. And if I'm going to spend $1 million, $1.5 million to do it, the tender offer, I'd rather use that $1 million, $1.5 million 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, attorneys and advisors and those kinds of things to get it all set up. So I would say somewhere between 3% and 10% of the shares, along with our fixed and 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 and where we -- the program comes in at as it relates to share repurchases, we may go -- we may do more than that. We may see a period of time here where it looks like selling, through a structure like we did previously makes sense and we may even do more. If it's – if the price is – I've said all along, if I could sell the whole company at six times, I would. So it's not a situation where, that's – to us, that's just a great asset sale when you can sell something for six times. So all of those things are really playing into my mind, but that $110 million will be sold just on shareholder return.

Great. That makes sense. Thank you. And then I just wondered if you could give an update on the current state of the U.S. M&A market in terms of the number of quality of opportunities. And also, actually, does the Oaktree acquisition also come with some undeveloped reserves?

Yes. Well, let me answer that second one 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 price is rebound -- and when I say rebound, it's probably above 350. There are opportunities for us in that acreage position to leg in to some upside, okay, whether it be through JVs, drilling ventures, whatever. We have the ability -- 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 a -- it seems like most of the M&A has been these public mergers. And I think that will continue throughout the year, as I said before, but it's going to spin off quality asset divestitures. For these guys to close those transactions, the FTC Federal Trade Commission will make them offload some of their assets. And as part of that, those are not going to be bad assets. They're going to be really nice assets. And so I believe recalibration of the dividend and the capital returns was 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, 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 U.S. for the first time probably in the last four or five years 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-based but also investor shareholder base is going to help us to take advantage of that as we move forward.

That's great. Thank you, I’ll hand over.

Thank you. Our next question comes from the line of Tim Hurst-Brown with Tennyson Securities. Please go ahead.

Hello, gents. Thanks for the call. Very useful. So just had a couple of questions, some of which have already been covered. But just on trading liquidity in the States, so now I think trading in the States roughly represents 50% of total traded volume. Just wondering how and when index trackers become involved here in the States. How do you see that kind of playing out?

Yes, that's a great question. Let me say this. We are surprised how quickly the level of trading picked up in the U.S. versus the U.K. total share trading, primarily because we didn't issue any equity in the U.S. I mean, we literally just opened up a structural listing and then we've seen a significant amount of activity coming out of the U.S. buying the shares across the platform. And we think probably somewhere between 30% and 40% of our existing shares probably are U.S. domicile holders now, both from the buying that's occurred since December and then the previous ones that we had on the register already. And so 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 rebases itself and would put us in a position, come June to enter the Russell 2000. We hit the thresholds very easily. We're fully qualified for it. And all of our indications are that we would be entering that potentially in June. Now, to put that in perspective, Doug can probably give you a better indication, but that's a significant amount of tracker volume. That'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 general's 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. 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. Thanks for that. And then just to follow up on something different. So, Rusty, I think you said on the M&A slide that you wouldn't rule out some kind of merger activity in the future. Just wondering what that might look like. What sort of ideal characteristics of a merger partner?

Yes, I would say that there's nothing really that I can pinpoint at this point in time. I just know that there's a lot of discussions between a lot of different companies going on across the spectrum. And if it, for us, it would have to meet the criteria. It would have to be accretive. It would have to improve our business and improve our -- but more importantly, nothing – this is the most important thing – our free cash flow profile. We want – anything we do has to be accretive from a free cash flow profile and distributable cash flow profile. Because everything we do from here on out, we want to have the flexibility of spreading that cash across the four main pillars that we talked about in terms of shareholder returns. So, I don't have one specifically 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 a creative to our shareholders, then we'll look at it. And some other benefits from a merger transaction is scale. And with scale comes access to capital, larger pools of capital, different types of capital that, you know, to date we have not been able to access as easily maybe to some of our larger peers. So that's a big opportunity for us as well, just from gaining scale.

That's great. Thanks.

Thank you. Our next question is from the line of Simon Scholes with First Berlin. Please go ahead.

Yes, good morning. Thanks for the very informative presentation. And thanks for taking my questions. I've just got a couple. I mean, first of all, I was very interested, Rusty to hear what you were saying about the prospects for the gas market and 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 kicks in around 28, 29. And surely a lot of that relates to the outcome of the next U.S. election. So I'll be interested in your comments on that. And secondly, I was just wondering if you could say something more about the possible structure, possible volume of the potential private placement you were talking about in the press release this morning.

So let me talk about the LNGs and the natural gas liquids and the LNG export facilities. What I would tell you about that is that currently the ones that have been approved and that are in process to your point are represented about 20%, 25% of the existing production in the U.S. today, which is very strong and which should put a floor under pretty much the prices as we move forward. The ones after that, what I would say is yesterday there's a thing going on in Sarah in Houston, Sarah Week they 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 gone and that those should be opened back up. Now that's her speaking. So I would say that she's probably as into it as anybody.

Well, it was also John Podesta who's probably baking the call.

Correct. And so I think we'll see that open back up, Simon, and then the flood gates 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 I don't necessarily believe that the election is going to have much of an impact on that one way or another. Another big positive event that occurred yesterday was that Senator from West Virginia, Joe Manchin, made a comment at Sarah that there has been significant bipartisan support and they've made headway on a permitting and regulatory bill, which is probably more important than the export moratorium because we need infrastructure in the U.S. to move gas around and get it to these export facilities. So I think that between that and the bill related to the permitting, the export facilities and the permitting, I think that, that is going to have a massive impact on the stability of natural gas prices in the U.S. 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. It's liquidity. If we did want it would be liquidity enhancing. It's been a very active market in the U.S. here in the last year. Lots of opportunity set and a lot of capital providers providing this. It's just an option on the table to us and that's it. If it was something that we decided to utilize, that we would inform the market of it and make sure that it was just an option along with asset sales and other things.

Okay, thanks very much. That's very helpful.

Thank you. Our next question comes from the line of Noel Parks with Tuohy Brothers. Please go ahead.

Hello. Good morning. I just had a couple. I didn't want to turn for a moment to the work you've done on emissions 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 that has sort of slacked off. Maybe consolidation is more of a topic. So I wonder if you could just talk about some of the efforts you've made where you view yourself as being more rigorous than many of your peers?

Yes, well, I'll just say this. To my knowledge, it 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 slowdown 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 were going to do back in 2022 that this was going to be a big part of our business going forward and honestly, reducing emissions is good business for us. 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 to that?

Yes. I mean, it's a comprehensive approach that we're taking and that comprehensive approach starts in our boardroom and it goes all the way out 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. So we're at the, we're boots on the ground, at the ground level with the mesh detection devices and we're really sticking to the philosophy we've had since we listed the company back in 2017. And it's very simple. If we find a leak, we repair it. And with the 98% leak free rate on our wells, we're proud of that. But it's showing the fact that all the efforts we're doing are producing some very good results. And we're going to continue on that path. We're still committed this year with our pipeline flyover program. The other thing I will tell you too is this part of our Focus 5 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. Two, we've got a large set of assets that we can work with. And then three, we're showing the fact that we're open to and making tangible investments into this space. So we think that there's going to be a lot of innovation occurring in admissions mitigation and we're going to be right there on the forefront to continue to improve our results.

Great. Thanks. That's really interesting. And you did mention that you foresaw just more things to do as far as cost optimization heading into next year. And 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 improvements?

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, consolidate pipelines, improve route efficiency. And technology is one area that we're looking to do that and really understanding what well route district profitability is to recall across all of our different assets. We've developed some new tools here recently where we can deploy to our field teams on their phones, on their tablets, on their PCs. And they've got immediate visibility into all the profitability and production characteristics of the businesses that they're operating. I mentioned it earlier where we've got one source of trusted information that we all, whether it's in my chair or a gun or truck, we're all looking at the same information that allows us to make some good business decisions. So we're constantly looking at field cost optimization. We're also looking at our G&A cost 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'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 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 costs.

Great. Thanks a lot.

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 of following the Oaktree deal and given current liquidity and the dividend cut and the focus on debt reduction and just the timing of a $400 million acquisition against that backdrop. Was it more this deal was too good to pass up and there was a timing element there? And the focus is now on what diversified was two or three years ago where you can maybe be a bit aggressive on the M&A front. Just trying to understand because it gets that backdrop of focusing on debt reduction but then leveraging up for a deal. We'd be good to hear a bit more color on that, please.

Yes. Well, we don't do deals just to be doing them. 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, on the calls and really trying to garner leverage and relationship. So this deal has been out there for a while. And I've been talking about it 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 pertinent because obviously going into 2024, I didn't want gas prices to rock it up late in the year and the next year. And then we just asked, it becomes that much more expensive. And so this was the prime time to do that. But the recalibration to dividend and the abolition has nothing to do with each other. They just happen 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 taking our strategy across more shareholder return pillars versus just focusing on one thing all the time, which was dividend. We now have an opportunity to go into 2024-25. We know now that we have our production declines covered. 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 intrinsic value of 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.

Alex, I'll also add that with our relationship and all the back office administration support that we were providing to Oaktree, we had good visibility into their hedge book and into how they've protected the cash flows. And they've got, as we've shown, they've got a very attractive hedge price that we're going to be able to benefit from in 2024. But also, they do not have hedges in place for 2025 and 2026. And so that's a great opportunity for us as the contango and the curve is providing some much stronger prices than what we're seeing here in the back half of 2024. 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 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 on Brad and Rusty's commentary is really the fact that as we've demonstrated and as everyone has seen from the results that we posted today, we continue to provide reliable production and consistent in cash flows. And so when you look at the acquisition that we added to our portfolio today, it was really 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 generate.

Very clear. Thank you, guys. Just a quick last one. Just on you mentioned non-core assets there was potentially, could you highlight a bit more color on what they could be or is it still kind of in the early days there?

No, I don't know if I would say non-core. I would just say that we would potentially look at an asset sale if it fits the criteria that we saw with the one we did in December, where 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 and structure where liquidity has significantly enhanced and where 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 meant.

Okay, so if you could sell it at 6x but reinvest it to 3x again, then that's an opportunity for you.

Absolutely. And look, it wasn't, the asset sale 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 at a much, smaller multiple than what we're selling these other assets at.

Got it. Thank you very much.

Thank you. Our next question comes from the line of Mark Wilson with Jefferies. Please go ahead.

Hi, thanks. Good morning, gents. Looking at your results this morning, you give a very clear three-year set of annual numbers in the press release, and it's quite clear to see EBITDA, very constant, and getting up towards 553 cashflow around the $220 million and leverage within that target range of 2.5. And so an investor looking at that could be forgiven for saying, well, what's changed and led to the reset of the capital allocation. If I go back to COVID times, you've seen volatile gas prices before during COVID, you didn't blink with the dividend and that continued. So you could reflect on that and say, and ask, what has changed? Is it the commodity price? Is it the cost of debt? Is it you speak to 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, I don't think what's changed is what we plan on doing for the future. Look, we're sitting here today training at a 30% dividend yield. I can't get institutions to discuss future investments with us because they don't even want to take the calls when they'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 don't even 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'd have to grow it over a period of time or sell it. That's your two options. And so, we pay, you can still sell it, but now we're going to be selling it out in a place of strength going forward, having the ability to have options and be able to buy back shares, Mark, when it makes sense. When you're at a 30% dividend yield buying back shares looks pretty dang attractive. And so it wasn't anything to do with, can you sustain it or whatever. We could have sustained it. We could have done another year or two probably, but we would have had to sell assets and create liquidity in other ways to do that. But that to me was just not the right way to operate the business. Let's make the decision that makes the most sense, strengthens the balance sheet, strengthens our cash flows to have options and ways 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. A 30% dividend yield wasn't giving us an audience with U.S. institutional investors.

Okay, that's clear. Thank you very much. And could you give us a note there on where, if there indeed is anything to say with the congressional letter situation?

Yes, so the congressional letter, we responded to it back in January. I don't believe it was, first, second week of January. We were very descriptive in what we do. We've had a couple of calls with them. We're actually, I think, correct me if I'm wrong, we're going to even provide them a lot of the data with things that we've done. And so that's become, less and less of an issue. And I don't foresee us really having any other type of inquiries. And let me make this very clear because people use the wrong wording. There was people use the word investigation, inquiry. It was none of 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. So we knew we had a positive message and that we were doing the right things. So we're going to respond. And we're not trying to hide anything. We do all the right things and we had no problem in letting them know the things that we did.

We're really still going to have 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 positive engagement.

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 Rushdie Hutson, CEO for his closing comments.

Yes, thank you all for coming today. I would just like to add on the way out that we are very proud of the year that we had in 2023. I think it was strong of an operational performance and really want 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-priced environment. We tell them, don't worry about prices 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. They did a fantastic job. 2024 is going to be really, really good year for Diversified. This asset acquisition adds a lot of scale, adds a lot of revenue, adds 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 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 U.S. I think that the Russell 2000 Indexation that's out there in June will be a big catalyst for the company in 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.