AGM Statement Board reorganisation
28 July 2017
DIVERSIFIED GAS & OIL PLC
("DGO" or the "Company")
AGM Statement
Board reorganisation
Diversified Gas & Oil PLC (AIM: DGOC), a US based gas and oil producer, provides the following trading update ahead of its Annual General Meeting to be held at 10.00 am today.
Highlights
· Integration of recently acquired producing wells progressing smoothly and on schedule
· Production anticipated to be 11,000 boepd net following transference of final assets associated with Titan acquisition, expected on or before 30 September 2017
· Targeting operating cost of below $6 per flowing barrel of oil equivalent (BOE) once the integration of Titan assets is fully completed
· Board reorganisation with Executive Chairman Robert Post becoming Non-Executive Chairman with immediate effect
· Senior appointments to our operating and corporate functions to enhance operating oversight and execution
Since completing the acquisition of assets from Titan Energy (Titan) in June, DGO has made considerable progress in integrating the assets into the enlarged group and made the necessary structural adjustments to the team to ensure that DGO maximises the value of the acquisition. Bob Cayton, who joined from Titan, has been appointed Senior Vice President of Operations with responsibility for the management of all DGO's Appalachian field operations. Bob and his team will oversee implementation of new management processes and reporting frameworks to further improve performance management, drive operating efficiencies and increase output across our portfolio.
The Company has created the role of Senior Vice President of Environment, Health & Safety (EH&S), a role commensurate with operations the scale of DGO's. John (Jack) Crooks has been appointed to the role to oversee a team of five experienced professionals that will continue to deliver on DGO's commitment to safety, regulatory compliance and environmental stewardship.
The management team also welcomes Eric M. Williams CPA as Chief Financial Officer, whose appointment was announced on 7 July. Eric will support Finance Director, Brad Gray, in his responsibilities for accounting operations, financial reporting and investor relations communications. Eric joins DGO from Callon Petroleum (NYSE: CPE), where he spent the last seven years enhancing the finance and investor relations functions of the company through a period of intense growth. Eric qualified as an accountant from PWC.
To ensure the smooth integration of the entire portfolio, DGO has engaged the consulting expertise of Opportune, an energy industry consulting firm based in Houston, who are working with the DGO management through the duration of the process. Their invaluable experience in integration events is adding rigour and guidance to deliver a timely transition into the new enlarged business.
As previously guided, certain assets associated with the Titan Acquisition that are held within a public partnership structure, are anticipated to be transferred to the Company after on or before 30 September. Completion of these assets remains on track and will take DGO's gross production to circa 18,300 boepd (11,000 boepd net).
Pleasingly, the underlying business has continued to perform in line with expectations. DGO continues to deliver on the Company's strategic objective to further reduce its already low production costs through well optimisation, as well as the improvement of well assessment and maintenance programmes. DGO achieved an operating cost per flowing barrel of oil equivalent (BOE) of $8.26 in the fourth quarter of FY16 and anticipates operating costs to fall below $6 per BOE once the integration of Titan assets is fully completed. As the industry experiences significant and continued downward pricing pressure across the value chain, the DGO business model and strategy for extracting additional value from its assets provides robust protection in a challenging market.
The Company also announces today that Mr Robert Post will become Non-Executive Chairman of DGO, relinquishing his executive director responsibilities, with effect from 1 August 2017. Mr Post joined DGO in 2005 and has overseen the Company's significant growth, culminating in the successful admission to trading on AIM in February 2017 and the transformational acquisition of assets from Titan Energy. Following the completion of the recent acquisition and strengthening of the executive management team, Mr Post now intends to take a less prominent role in the Company's day to day activities. He will remain available to assist the management team as required and he remains the joint largest shareholder, alongside founder and CEO Rusty Hutson Jr, with an interest of approximately 13.8% of the Company's issued share capital.
Commenting on his decision to become Non-executive Chairman, Mr. Post said:
"I am immensely proud of what we have achieved with DGO since I joined the company in 2005. DGO has established itself as one of the largest conventional players in the Appalachian Basin and, subsequent to our admission to AIM in February, we have become one of the largest and one of the lowest cost producers on AIM. Under the leadership of Rusty Hutson, the Company is extremely well managed by a team with the requisite strength, depth and skills to maintain this impressive momentum along the growth path. As such, I have decided that it is the appropriate time to relinquish my executive duties and I look forward to working alongside the Board in my new capacity as Non-executive Chairman."
DGO's CEO Rusty Hutson Jr. added:
"Robert has been truly instrumental in our success and we look forward to leveraging his ongoing leadership, business experience and industry knowledge as he assumes the new role of Non-executive Chairman.
We are pleased with the progress that we have made in terms of integrating the assets that we acquired from Titan. The new assets are highly complementary to our portfolio in terms of operational and strategic synergies and we are already benefiting from lower operating costs. We have identified areas for cost savings and expect to be able to drive down our operating costs further as we streamline our operations and increase our production."
This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.
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Diversified Gas & Oil PLC Rusty Hutson Jr., Chief Executive Officer Brad Gray, Finance Director
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+ 1 (205) 408 0909
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Smith & Williamson Corporate Finance Limited (Nominated Adviser & Joint Broker) Russell Cook Katy Birkin
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+44 20 7131 4000
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Mirabaud Securities LLP (Joint Broker) Peter Krens Edward Haig-Thomas
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+44 20 3167 7221
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Buchanan (Financial Public Relations) Ben Romney Chris Judd Henry Wilson
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+44 20 7466 5000
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About Diversified Gas & Oil
Diversified Gas & Oil PLC ("DGO") owns and operates gas and oil producing wells in the Appalachian Basin, one of the largest oil and gas fields in the US. The Company was founded in 2001 and has grown rapidly in recent years, capitalising upon opportunities to acquire conventional, low risk gas and oil producing assets. After the completion of its most recent acquisition, DGO will have a total, gross daily production of approximately 18,300 boepd. DGO was admitted to trading on AIM in February 2017.
This information is provided by RNS
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