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DEC, Diversified Energy Company

We are engaged in the production, transportation, and marketing of natural gas, NGLs, and oil, managing a diversified portfolio of mature, long-life assets.

We focus on optimizing and extending the productive life of existing wells, using advanced monitoring technologies and data analytics to drive operational efficiency and safety.

With over 69,000 total net productive wells, we produced an annual average of 1,086 MMcfepd during the year ended December 31, 2025 , and we are well-positioned to maximize asset value while maintaining a sound balance sheet and upholding high standards for safety and environmental responsibility.

Latest annual: FY2025 10-K

DEC · Diversified Energy Company

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.8B

+141.5% YoY

Vital signs · TTM, with 3-yr average

Revenue $1.8B 3-yr avg $1.5B

Operating margin 26.3% 3-yr avg 24.4%

ROIC 13% 3-yr avg 5%

Owner-earnings margin 19% 3-yr avg 16%

Free cash flow margin 19% 3-yr avg 16%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Operating margin has run about 29% through the cycle, a wide margin for the work it does — whether that reflects a durable edge or one that can fade is what the record weighs. The operating margin has swung widely — from −13% to 57% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Read this kind of business on the commodity price, and the cost to lift a barrel. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2023–2025

realized figures from each filing · older years to the left

2023’23	2024’24	2025’25	TTMTTMMar 2026
				Income statement
$1.9B	$757M	$1.8B	$1.8B	RevenueRevenue
7%	17%	9%	10%	SG&A / revenueSG&A/rev
$1.1B	($97M)	$535M	$473M	Operating incomeOp. inc.
56.9%	−12.8%	29.2%	26.3%	Operating marginOp. mgn
$749M	($104M)	$341M	$504M	Net incomeNet inc.
				Cash flow & returns
$291M	$221M	$465M	$548M	Operating cash flowOp. cash
$273M	$292M	$413M	$446M	DepreciationDeprec.
($737M)	$25M	($299M)	($415M)	Working capital & otherWC & other
$74M	$52M	$185M	$215M	CapexCapex
3.8%	6.9%	10.1%	12.0%	Capex / revenueCapex/rev
$217M	$169M	$280M	$334M	Owner earningsOwner earn.
11.1%	22.3%	15.3%	18.6%	Owner earnings marginOE mgn
$217M	$169M	$280M	$334M	Free cash flowFCF
11.1%	22.3%	15.3%	18.6%	Free cash flow marginFCF mgn
$0	$0	$330M	$0	AcquisitionsAcquis.
$168M	$84M	$85M	$90M	Dividends paidDiv. paid
—	-4%	14%	13%	ROICROIC
139%	-26%	35%	69%	Return on equityROE
108%	−47%	26%	56%	Retained to equityRetained/eq
				Balance sheet
$4M	$6M	$30M	$55M	Cash & investmentsCash+inv
—	$234M	$408M	$412M	ReceivablesReceiv.
—	$10M	$28M	$28M	InventoryInvent.
—	$35M	$82M	$76M	Accounts payablePayables
—	$209M	$354M	$363M	Operating working capitalOper. WC
—	$304M	$650M	$627M	Current assetsCur. assets
—	$777M	$1.1B	$1.3B	Current liabilitiesCur. liab.
—	0.4×	0.6×	0.5×	Current ratioCurr. ratio
—	$4.0B	$6.2B	$6.2B	Total assetsAssets
—	$1.7B	$3.0B	$2.9B	Total debtDebt
—	$1.7B	$2.9B	$2.8B	Net debt / (cash)Net debt
8.5×	-0.7×	2.5×	2.0×	Interest coverageInt. cov.
$538M	$400M	$984M	$733M	Shareholders’ equityEquity
0.3%	1.1%	0.6%	0.7%	Stock comp / revenueSBC/rev
				Per share
47.5M	48.0M	74.5M	75.3M	Shares out (diluted)Shares
$41.01	$15.77	$24.56	$23.84	Revenue / shareRev/sh
$15.76	$-2.17	$4.58	$6.69	EPS (diluted)EPS
$4.57	$3.51	$3.76	$4.44	Owner earnings / shareOE/sh
$4.57	$3.51	$3.76	$4.44	Free cash flow / shareFCF/sh
$3.54	$1.75	$1.14	$1.19	Dividends / shareDiv/sh
$1.56	$1.08	$2.48	$2.85	Cap. spending / shareCapex/sh
$11.32	$8.33	$13.21	$9.75	Book value / shareBVPS

The diluted share count moved ×1.55 into 2025 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The record, charted

FY2023–2025

Each measure over its full record; the current point and the worst year marked.

Share count

74Mpeak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$280Mowner earningsvs.$341Mnet incomelow FY2024

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2023FY2025

Owner-earnings bridge

FY2023–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $341M of profit but $280M of owner earnings: $61M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$341M

Owner earnings$280M · 15% of revenue

	FY2025	FY2024	FY2023
Reported net income	$341M	($104M)	$749M
Depreciation & amortizationnon-cash charge added back	+$413M	+$292M	+$273M
Stock-based compensationreal costnon-cash, but a real cost	+$10M	+$8M	+$6M
Working capital & othertiming of cash in and out, other non-cash items	−$299M	+$25M	−$737M
Cash from operations	$465M	$221M	$291M
Capital expenditurecash put back in to keep running and to grow	−$185M	−$52M	−$74M
Owner earnings	$280M	$169M	$217M
Owner-earnings marginowner earnings ÷ revenue	15%	22%	11%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $10M), owner earnings is nearer $270M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 2.5×

Adequate

Operating income $535M ÷ interest expense $210M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $2.9B · 5.5× operating profit

Heavy net debt

Cash $30M − debt $3.0B

What this means
Netting $30M of cash and short-term investments against $3.0B of debt leaves $2.9B owed, about 5.5× a year's operating profit. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 14%

Solid

NOPAT $535M ÷ invested capital $3.9B (debt + equity − cash)

Industry peers: median 5%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 15%

High through the cycle

3-yr median margin, range 11%–22%; latest $280M = operating cash $465M − maintenance capex $185M

Industry peers: median 15%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 15% of revenue this year, a 15% median across 3 years. Treating stock comp as the real expense it is (less $10M of SBC) leaves $270M.
Are earnings backed by cash? 1.36×

Cash-backed

Cash from ops $465M ÷ net income $341M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 30%

Reinvests most of it

Dividends + buybacks $85M ÷ Owner Earnings $280M

What this means
Of $280M Owner Earnings, $85M (30%) went back to shareholders, $85M dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.45×

Harvesting

Capex $185M ÷ depreciation $413M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 3 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.8B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.60×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $3.0B vs ($426M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $4.54/share (latest year $4.72), the averaged base the calculator's gate runs on, and book value is $13.61/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“As others use or develop new technologies (including technologies related to artificial intelligence), we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial costs.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$627M

Cash & short-term investments$55M
Receivables$412M
Inventory$28M
Other current assets$133M

Current liabilities$1.3B

Debt due within a year$235M
Accounts payable$76M
Other current liabilities$1.0B

Current ratio0.47×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.45×stricter: inventory excluded

Cash ratio0.04×strictest: cash alone against what's due

Working capital($708M)the cushion left after near-term bills

Debt due this year vs. cash$235M due · $55M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago−56.6%the freshest read on whether the business is still growing

Current ratio, recent quarters0.4× → 0.5×

Deeper floors

Tangible book value$730Mequity stripped of goodwill & intangibles

Net current asset value($4.9B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$2.9B$4M of it operating leases

Deferred revenue$264Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2023	$4.2M	$2.0M	$217M
2024	$4.6M	$5.9M	$169M
2025	$5.0M	$3.8M	$280M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership2.9%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$10M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Peers, Oil & Gas Producers

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
CRCCalifornia Resources	$2.9B	24%	19.7%	13%	12%
MURMurphy Oil	$2.7B	100%	11.6%	3%	46%
CNXCNX Resources	$2.2B	—	-3.2%	-0%	24%
DECDiversified Energy Company	$1.8B	—	29.2%	14%	15%
TALOTalos Energy Inc.	$1.8B	—	12.7%	6%	5%
HESMHess Midstream LP	$1.6B	—	60.4%	—	48%
KOSKosmos Energy Ltd. Common Shares (DE)	$1.3B	—	-5.2%	-1%	12%
AESIAtlas Energy Solutions Inc.	$1.1B	—	27.3%	9%	15%
Group median	—	—	16.2%	6%	15%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Diversified Energy Company has delivered.

Today’s price $

Base Normalize · through-cycle ($222M) Net of stock comp (−$13M) Steady-state · maintenance capex ($364M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · since FY2023+14%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $334M on 72M shares outstanding, per the 10-Q cover, as of 2026-05-06; net debt $2.8B. The if-converted diluted count is 75M, 4% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($215M) runs well above depreciation ($446M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $364M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh DEC against another business →

Cite: Owner Scorecard, "Diversified Energy Company (DEC), the owner's record," https://ownerscorecard.com/c/DEC, data as of 2026-07-09.

Manual order: ← DEA its page in the Manual DECK →

Industry order: ← CVE the Oil & Gas Producers chapter DMLP →