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Diversified Gas & Oil says earnings and EQT integration on track

DGOC also spelt out its decommissioning policies in the states where it operates
oil wells
EQT integration is progressing well

Diversified Gas & Oil PLC’s (LON:DGOC) integration of the large batch of oil and gas assets acquired from EQT in the Appalachian Region is on track.

The acquisition, in June, cost US$575mln and more than doubled production to around 60,000 barrels a day equivalent.

At the time, DGOC estimated the purchase would have boosted 2017 earnings by 289% on a pro-forma basis.

WATCH: Diversified Gas & Oil 'very close' to Pennsylvania decommissioning agreement

Today, it said current trading was in line with management forecasts and that results for 2018 will be line with market estimates.

DGOC also spelt out its decommissioning policies in the states where it mainly operates  - Ohio, Pennsylvania, Virginia, West Virginia, Kentucky and Tennessee.

“DGO jointly develops decommissioning programs with regulators within the states in which it operates.

“For example, DGO has a formal, five-year agreement with the state of Ohio to plug up to 18 wells per year (or a total of 90 wells over the five-year period), with no less than 14 wells plugged in any one year.”

Talks are underway with the Department of Environmental Protection in Pennsylvania over a decommissioning programme.

The company said it also budgets annually for the number of wells it expects to plug, with the average per-well decommissioning cost year-to-date approximates $20,600.

DGOC expects this cost to trend lower as it continues to reduce reliance on third-party contractors and increases the utilisation of its internal resources.

“The company does not expect to increase its planned plugging activities and that it has made adequate provision in respect of its decommissioning liabilities.“

 

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