United States securities and exchange commission logo
May 26, 2023
Benjamin Sullivan
Executive Vice President, General Counsel and Corporate Secretary
Diversified Energy Co PLC
1600 Corporate Drive
Birmingham, Alabama 35242
Re: Diversified Energy
Company plc
Amendment No. 4 to
Draft Registration Statement on Form F-1
Submitted May 1,
2023
CIK No. 0001922446
Dear Benjamin Sullivan:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 4 to Draft Registration Statement on Form F-1
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
Asset Retirement Obligations, page 79
1. We note your discussion
and quantification on page 80 regarding i) the PV-10 from your
reserves models, after
consideration of your asset retirement costs, calculated with
forward pricing, and
ii) your statement that these models have resulted in a PV-10
that illustrates
"residual cash flows well beyond our retirement obligations. Please
address the following:
Please tell us
your consideration of the need to provide disclosures pursuant to Item
Benjamin Sullivan
FirstName
DiversifiedLastNameBenjamin Sullivan
Energy Co PLC
Comapany
May NameDiversified Energy Co PLC
26, 2023
May 26,
Page 2 2023 Page 2
FirstName LastName
10(e) of Regulation S-K given that this PV-10 appears to be
calculated in a manner
different from the non-IFRS measure of PV-10 located on page 6,
as one example.
Revise your disclosure so as not to imply that these
alternative PV-10 measures
represent the residual cash flow available to the Company for
discretionary
expenditures. In this regard, we note that mandatory debt service
requirements or
other non-discretionary expenditures are not also highlighted in
this discussion.
Business
Summary of Reserves, page 89
2. Please obtain and file the third party reserve report prepared by
Netherland, Sewell
& Associates, Inc. as of December 31, 2022 as an exhibit to your
filing. Refer to the
disclosure requirements in Item 1202(a)(8) of Regulation S-K.
Proved Reserves, page 90
3. Please revise your discussion of the changes that occurred in total
proved reserves, shown
under the sections:Revisions to Previous Estimates, Purchase of
Reserves in Place, and
Sales of Reserves in Place, to clearly identify the year in which the
changes occurred.
Refer to the disclosure requirements in FASB ASC 932-235-50-5.
Productive Wells, page 91
4. Please expand your disclosure to include a separate section header
presenting the
exploratory and development drilling activities that occurred during
each of the last two
fiscal years. Your disclosure should separately identify the number of
net productive and
dry exploratory and development wells drilled in which you owned an
interest, including
wells drilled by operators other than you, during each annual period.
If you did not
participate in any such wells, please clarify your disclosure. Refer
to the disclosure
requirements in Item 1205 of Regulation S-K.
5. As part of the expanded disclosure of your drilling activities,
include a separate
description of your present activities, including the number of gross
and net wells in the
process of being drilled, completed or waiting on completion and any
other related
activities of material importance at the end of your most recent
fiscal year and any
subsequent updates to these activities as of the date of your current
filing. If there were no
such activities in progress, please clarify your disclosure. Refer to
Item 1206 of
Regulation S-K.
Proved Undeveloped Reserves, page 91
6. Please expand your disclosure to include the capital expenditures
associated with
converting proved undeveloped reserves to proved developed during the
year ended
December 31, 2022. Refer to the disclosure requirements in Item
1203(c) of Regulation S-
K.
Benjamin Sullivan
FirstName
DiversifiedLastNameBenjamin Sullivan
Energy Co PLC
Comapany
May NameDiversified Energy Co PLC
26, 2023
May 26,
Page 3 2023 Page 3
FirstName LastName
Compensation of Executive Directors
Executive Director Employment Agreements, page 114
7. For Robert Russell ( Rusty ) Hutson, Jr. and Bradley G. Gray you
disclose written service
agreements, with such agreements entitling Messrs Huton and Gray to
receive an
opportunity to earn an annual discretionary performance-based bonus of
up to 175% and
150% of base salary, respectively, subject to the achievement of
performance goals
determined in accordance with your annual bonus plan. Please disclose
the performance
goals in your annual bonus plan for each executive. See Item 6.B of
Form 20-F.
Report of Independent Registered Public Accounting Firm, page F-2
8. We note that the second sentence in the first paragraph retained
language referring to the
financial statements as of December 31, 2021 and 2020. Please revise
as necessary for the
updated financial statements included in this registration statement.
Notes to the Consolidated Financial Statements
Note 29-Supplemental Natural Gas and Oil Information (Unaudited)
Estimated Reserves, page F-62
9. We note the column summarizing the changes in total net proved
reserves as Boe amounts
includes an entry for the 2022 Purchase of Reserves In Place of
554,174 MBoe. This
figure appears to be a typographical error and is inconsistent with
the comparable
disclosure provided elsewhere on page 90. Please review and correct
the value.
10. Your explanation of the changes that occurred due Revisions of
Previous Estimates,
provided here and elsewhere on page 90, indicates the 90,251 MBoe
revision in 2021 and
the 63,302 MBoe revision in 2022 primarily resulted from higher
commodity prices. Your
explanation of the 2022 change identifies additional changes for other
unrelated factors
but does not include the net quantities associated with such changes.
Please expand your discussion to include an explanation relating to
each of the individual
factors that contributed to the overall change in the line item for
each period presented. If
two or more unrelated factors are combined to arrive at the overall
change, your revised
disclosure should separately identify and quantify each factor,
including offsetting factors,
so that the change in net reserve quantities between periods is fully
explained.
Please similarly revise your disclosure of changes in the net
quantities of total
proved reserves on page 90. Refer to the disclosure requirements in
FASB ASC 932-235-
50-5.
Cost Incurred in Natural Gas and Oil Property Acquisition, Exploration and
Development
Activities, page F-64
11. Please expand your disclosure to separately present the costs incurred
for exploration and
development for 2022 and 2021. Refer to the disclosure requirements in
FASB ASC 932-
Benjamin Sullivan
Diversified Energy Co PLC
May 26, 2023
Page 4
235-50-18.
You may contact Jennifer O'Brien, Staff Accountant, at 202-551-3721 or
Shannon
Buskirk, Staff Accountant, at 202-551-3717 if you have questions regarding
comments on the
financial statements and related matters. You may contact Sandra Wall,
Petroleum Engineer, at
202-551-4727 or John Hodgin, Petroleum Engineer, at 202-551-3699 with questions
about engineering comments. Please contact Irene Barberena-Meissner, Staff
Attorney, at 202-
5516548 or Kevin Dougherty, Staff Attorney, at 202-551-3271 with any other
questions.
Sincerely,
FirstName LastNameBenjamin Sullivan
Division of
Corporation Finance
Comapany NameDiversified Energy Co PLC
Office of Energy &
Transportation
May 26, 2023 Page 4
cc: Ryan J. Lynch, Esq.
FirstName LastName