Diversified Energy Company PLC (“DEC”)
Payments to Governments Report 2024
(Amounts in thousands)
This report provides a consolidated overview of the payments made to governments by DEC for the year 2024 as required
under Disclosure and Transparency Rule 4.3A issued by the UK's Financial Conduct Authority ("DTR 4.3A") and in
accordance with The Reports on Payments to Governments Regulations 2014 (as amended in 2015) ("the UK
Regulations"). DTR 4.3A mandates that companies listed on a UK stock exchange and operating in the extractive industry
publicly disclose payments to governments in the countries where they engage in the exploration, prospection, discovery,
development, and extraction of natural gas and oil deposits, or other materials.
Basis of Preparation
In accordance with the UK Regulations, DEC prepares a disclosure of payments made to governments for each financial
year, covering relevant activities of both DEC and any of its subsidiary undertakings included in the Group Financial
Statements.
Activities within the Scope of the Disclosure
This disclosure includes payments made to governments that pertain to DEC’s activities involving the exploration,
development, and production of natural gas and oil reserves (“extractive activities”). Payments made to governments for
activities other than extractive activities are not included in this disclosure as they fall outside the scope defined by the UK
Regulations.
Government
The term “government” encompasses any national, regional, or local authority of a country as well as any department,
agency, or entity that operates as a subsidiary of a government.
Cash Basis
Payments are reported on a cash basis, meaning they are reported in the period in which they are actually paid. This is in
contrast to the accrual basis, where payments are reported in the period in which the liabilities are incurred.
Project Definition
The UK Regulations mandate that payments be reported by project, which is considered a subcategory within a country. A
“project” is defined as the operational activities governed by a single contract, license, lease, concession, or similar legal
agreement that form the basis for payment liabilities with a government. If these agreements are substantially
interconnected, they can be treated as a single project. According to the UK Regulations, “substantially interconnected”
refers to a set of operationally and geographically integrated contracts, licenses, leases, concessions, or related
agreements with substantially similar terms, signed with a government, that give rise to payment liabilities. The number
of projects will depend on the contractual arrangements within a country, rather than the scale of activities. Additionally,
a project will only be included in this disclosure if relevant payments were made during the year for that project. The UK
Regulations also recognize that some payments may not be attributable to a single project and may therefore be reported
at the country level. Corporate income taxes, which are typically not levied at a project level, serve as an example of such
payments.
Materiality Level
For each type of payment, any total payments to a government that are below £86 are excluded from this report.
Exchange Rate
Payments made in currencies other than USD are converted for this report using the relevant quarterly average foreign
exchange rate.
Payment Types
According to the UK Regulations, a “payment” is defined as an amount paid whether in money or in kind, for relevant
activities. The payment must fall into one of the following categories:
Production Entitlements
Under production-sharing agreements (“PSA”), the production is divided between the host government and the other
parties to the PSA. The host government usually receives its share or entitlement in kind rather than in cash. For the year
ended December 31, 2024, DEC had no reportable production entitlements to a government.
Taxes