Diversified Gas & Oil Closes on Appalachian Oil and Gas Assets from CNX Gas Company LLC
BIRMINGHAM, AL–(Marketwired – April 06, 2018) – Diversified Gas & Oil PLC (AIM: DGOC) (“Diversified” and the “Company”), a U.S.-based acquirer and operator of oil and gas producing assets, on March 29, 2018 closed an $85 million cash purchase of certain oil and gas leaseholds, wells, working interests, licenses, related equipment and other assets (the “Assets”) from CNX Gas Company LLC. The transaction had a January 1, 2018 effective date.
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 producing (“PDP”) reserves approximate 173 MMboe.
Importantly, Diversified’s borrowing base under its $500 million credit facility led by KeyBank National Association increased to $200 million from its prior $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 low 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 listing on the AIM Market of the London Stock Exchange. 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.”
About Diversified Gas & Oil
Diversified Gas & Oil (AIM: DGOC) acquires and operates oil and gas producing assets in the Appalachian Basin of the United States. Diversified employs a disciplined investment strategy to acquire conventional and unconventional low-risk wells, enhance operations efficiently and maximize profitability for its shareholders. Founded in 2001, Diversified operates more than 40,000 long-life producing wells with the highest standards of safety, governance and transparency. For more information, visit us online at www.dgoc.com.