Update on proposed acquisition
15 June 2017
Diversified Gas & Oil PLC
("DGO" or the "Company")
Update on proposed acquisition of certain gas and oil assets of Titan Energy, LLC
Share placing to raise $35.0m (the "Placing")
Restoration of trading on AIM
Diversified Gas & Oil PLC (AIM: DGOC), a US based gas and oil producer, is pleased to confirm that it has finalised the agreement to acquire certain gas and oil assets of Titan Energy, LLC ("Titan Assets") which was announced on 5 May 2017 (the "Acquisition"). Details of the Acquisition will be set out in a new Admission Document and Circular to Shareholders which is expected to be published by not later than 7.00am on 16 June 2017 (the "Admission Document").
As announced previously, the Titan Assets comprise certain producing gas and oil wells, close to DGO's existing operations in the Appalachian Basin in the eastern United States, principally in the states of Ohio, Pennsylvania, southern New York and northeast Tennessee.
Daily gas production from the Titan Assets is approximately 12,500 gross boepd (6,550 net boepd) and oil production is 380 gross bopd (266 net bopd). The Acquisition will more than triple DGO's gross gas production to approximately 17,367 boepd, and will increase gross oil production by 69% to approximately 930 bopd. Overall gross production will increase from approximately 5,400 boe to 18,300 boe. The Titan Assets will be immediately accretive to cash and earnings.
The cash consideration for the Acquisition is $84.2 million (approximately £66.1 million) (subject to adjustment in accordance with the terms of the agreement for the Acquisition). This will be funded by a new $110 million Senior Secured Loan Facility (the "Loan Facility") and the Placing. Mirabaud Securities LLP has placed 39.3 million new ordinary shares (the "Placing Shares") at 70p per share with certain existing and new institutional investors to raise $35.0 million (£27.5 million). The Placing will take place in two tranches. 11.4 million firm Placing Shares have been placed to raise $10.1 million. The remaining 27.9 million conditional Placing Shares are placed conditional on approval by Shareholders.
Notice of a Shareholder meeting to seek approval for the Acquisition and authority for the conditional Placing Shares will be sent to Shareholders later today. The Shareholder meeting will be held at 11.00am on 30 June 2017.
Full details of the Loan Facility and the Placing will be set out in the Admission Document.
Following publication of the Admission Document the Company anticipates that the suspension of trading in the Company's shares will be lifted and that trading in the Company's existing ordinary shares will recommence at 8.00am on 16 June 2017.
This announcement contains 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 (0)20 7131 4000
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Mirabaud Securities LLP (Lead Broker) Peter Krens Edward Haig-Thomas
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+44 (0)20 3167 7221
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Buchanan (Financial Public Relations) Ben Romney Chris Judd Henry Wilson
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+44 (0)20 7466 5000
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About Diversified Gas & Oil
Diversified Gas & Oil PLC 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. DGO was admitted to trading on AIM in February 2017, raising $50 million from institutional and other investors.
This information is provided by RNS
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