Fueling Success

Rusty Hutson, the CEO of Diversified Energy Company (DEC), learned early on that success doesn’t come at the click of your fingers when you’re growing up in a place that has seen more than its fair share of hard times, like West Virginia. “I come from an area where you have to work hard to be successful,” he says.

He also became aware at a very young age that you could use that knowledge in one of two ways. “You could use it to drive your own success, or use it as an excuse not to,” he continues.

Hutson, whose father, grandfather and great-grandfather all worked in oil and gas, chose the former – becoming the first person in his family to go to university when he attended West Virginia’s Fairmont State University.

However, rather than pursuing a higher education degree in an oil and gas-related field, as his summers spent working alongside his father in the state’s oil fields suggested he would, he chose accounting.

Yet oil and gas is in Hutson’s blood. Even as he climbed the career ladder with executive roles at Bank One and Compass Bank in Birmingham, Alabama, he continued to feel its pull.

“I started to be drawn back into the industry in the late 1990s,” he says. “I told my dad that I wanted to buy some wells. He found some for me and I took out a home equity loan and purchased them.”

The acquisition of 40 more wells in West Virginia quickly followed, heralding the inception of DEC.

For four years, the business was Hutson’s side hustle. “I was trying to grow the oil and gas business, while working a full-time banking job in Birmingham,” he says.

By 2005, he decided that the time had come to go all-in. From its West Virginian roots, he took the company to Ohio and Pennsylvania. In 2017, it had its IPO on the London Stock Exchange. Last year, it listed the New York Stock Exchange as well.

“We produce about 140,000 barrels of oil equivalent per day,” Hutson says.

Ninety percent of the business is natural gas, non-gas liquid (NGL) around eight percent and oil one percent.

A differentiated strategy

That’s not to say that the lessons have stopped. In fact, the opposite: it was another learning that guided DEC toward a business model that differentiates it in the market. “We tried to be the company that you see out there in the E&P [Exploration and Production] sector today, which is to drill complete wells, put them in production, operate that production, keep drilling, keep fracking,” he says. “But we decided we wanted to focus on just one strategy.”

The bedrock of that strategy is existing wells: acquiring, producing, optimizing and retiring them. “We take existing production on existing, long-life wells and spend time and attention on enhancing the revenue and the environmental and operational performance on those wells, until retiring them in a safe and secure manner,” he explains.

Since settling on this approach, the company has expanded across multiple different basins and now has a presence in Oklahoma, Texas and Louisiana, alongside West Virginia, Kentucky, Tennessee, Ohio and Pennsylvania.

Sustainability and community roots

Oil and gas might pump through the Hutson family veins, but running alongside it is a need to give back: whether in terms of environmental stewardship or community.

“We have put a lot of time into emissions identification, emissions measurement and emissions reduction, where we have made some substantial ground over the last three years,” he explains.

In fact, a goal to reduce methane intensity by 50 percent compared to its 2020 baseline was reached in 2023, seven years ahead of its 2030 target. DEC has also been awarded an AA MSCI ESG rating and is one of four companies in the United States to have a Oil and Gas Methane Partnership 2.0 (OGMP) gold star rating.

He’s also passionate about giving back to the community: not only in West Virginia. “We give back in the communities where we have employees and where they work on a day-to-day basis,” he says.

Last year, over US$2.1 million was spent on community outreach programs across grants, programs and community support, including 50 university scholarships and paid internship opportunities.

The company is the official energy partner of West Virginia University (WVU), and Hutson was recently appointed to the WVU Board of Governors.

But it’s not just the charity that makes it so rewarding, Hutson explains. “What I really love about our community involvement is that our employees are involved and they get out and devote time and attention to it,” he says.

At its essence, DEC is about its employees, Hutson says. “We don’t have a company without them. What they do day-to-day, the work they put in, the time that they spend managing and producing wells, not only provides jobs for them, but it provides us all a company. I don’t have a job without them.”

But, he continues, there’s more at stake than just the business. “What I want them to know is that what they are doing is not just about DEC,” he says. “It’s bigger. We’re energizing our country and providing an energy source that is desperately needed, and providing our national security.”