Further re CNX Gas Asset Acquisition completion
3 April 2018
Diversified Gas & Oil PLC
("DGO" or the "Company")
Completion of the acquisition of certain Appalachian oil and gas assets
from CNX Gas Company LLC (the "Asset Acquisition")
Diversified Gas & Oil PLC (AIM: DGOC), a leading independent US based gas and oil producer focused on the Appalachian Basin, is pleased to announce that the Company has completed its acquisition, previously announced on 9 February 2018, of certain oil and gas leaseholds, wells, working interests, licenses, related equipment and other assets (the "Assets") from CNX Gas Company LLC. The conditions of the sale and purchase agreement have been met in full, with the Asset Acquisition being effective from 1 January 2018.
Also as previously announced, DGO paid a cash consideration for the Assets totalling US$85.0 million from its existing facilities.
Inclusive of the acquisition of these Assets and those purchased earlier this month from Alliance Petroleum, the Company estimates its total net working interest production now exceeds 28,000 boed, and that its net working interest of proved, developed and producing ("PDP") reserves approximate 173 MMboe.
Importantly, the Company's borrowing base under its credit facility led by KeyBank National Association increases to $200 million from its current $140 million level, providing the Company significant liquidity to pursue additional acquisition opportunities without the need for additional equity capital and without exceeding its commitment to maintain a leverage profile. As previously announced, the credit facility significantly reduced the Company's interest rate from nearly 10% on amounts outstanding under its previous facility agreement to approximately 4.5% on current borrowings under this credit facility.
CEO Rusty Hutson commented:
"While 2017 was undoubtedly a remarkable year for DGO, the month of March 2018 has produced the most transformative catalysts to our business since admission to AIM. Over the past 30 days, we have nearly tripled our net daily production, more than tripled our PDP reserves and halved our cost of borrowing. As of today, we are one of the largest production companies on AIM and have a diverse and impressive acreage position underpinned by a substantial proven reserve base with minimal decline rates. We are making positive headway with the integration process of the recently completed Alliance assets and expect a similarly smooth integration of these CNX assets.
Collectively, our two latest acquisitions combined with our syndicated credit facility create long-term value for shareholders and fulfil our commitment to a progressive per-share dividend. Importantly, our progress in 2018 and significant borrowing capacity under our credit facility places us in a position of financial strength to continue our pursuit of high-quality growth opportunities while maintaining our commitment to low leverage."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information contact:
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Diversified Gas & Oil PLC Rusty Hutson Jr., Chief Executive Officer Brad Gray, Chief Operating Officer and Finance Director Eric Williams, Chief Financial Officer
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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 Limited Joint Broker Peter Krens Edward Haig-Thomas
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+44 20 3167 7222
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Stifel Nicolaus Europe Limited Joint Broker Callum Stewart Nicholas Rhodes Ashton Clanfield
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+44 20 7710 7600
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Buchanan Financial Public Relations Ben Romney Chris Judd Henry Wilson |
+44 20 7466 5000
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This information is provided by RNS
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