logo-loader
Diversified Gas & Oil PLC

DGOC higher as it closes US$400mln asset acquisition

The acquisition adds 107 producing wells, boosting group output by 30% to 90,000 boepd

oil well drilling
It will be “immediately accretive”

Diversified Gas & Oil PLC (LON:DGOC) shares rose on Tuesday as the firm completed its US$400mln acquisition of assets from HG Energy II Appalacia LLC, delivering some 107 producing wells to the company’s portfolio.

The transaction grows daily production by around 30% to over 90,000 barrels oil equivalent per day, and, it is described as being “immediately accretive”.

"This is yet another transformative transaction consistent with our ambitious and proven growth strategy," said Rusty Huston, DGOC chief executive.

READ: DGOC reveals another big acquisition

"The HG Energy Acquisition firmly establishes Diversified as a top-tier London-listed producer, supported by a healthy balance sheet, a strong cash flow profile and a healthy dividend yield.

“We now turn our attention to the seamless integration of these assets into our smarter well management program."

The transaction was supported by a US$234mln institutional share placing, with the remainder covered via an existing credit facility.

DGOC also today updated investors on its hedging arrangements, which aim to protect cash flows and mitigate risk.

It has utilised a foreign currency swap, for £170mln, which has resulted in a US$4mln gain.

Additionally, it uses a mixture of physical and financial contracts to hedge production – it highlighted that it successfully executed NYMEX gas hedges (representing 13,300 boepd) at a premium of 9% compared to the current monthly gas pricing, and, a further 11,700 boepd worth of production was similarly covered at a 9% premium.

In afternoon trading, DGOC shares were 2.1% higher at 121p.

 -- Adds share price --

Quick facts: Diversified Gas & Oil PLC

Price: £1.15

Market: AIM
Market Cap: £755.44 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Diversified Gas & Oil PLC named herein, including the promotion by the Company of Diversified Gas & Oil PLC in any Content on the Site, the...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Diversified Gas & Oil acquires Ohio gas asset

Diversified Gas & Oil PLC (LON:DGOC) is to acquire Ohio-based gas production/exploration assets from EdgeMarc Energy Holdings following an approval by the US bankruptcy court. CEO Rusty Hutson tells Proactive London what the acquisition means for DOG and runs through recent and expected...

2 weeks, 4 days ago

RNS

Main Market and Corporate Update

4 days, 16 hours ago

Transaction in Own Shares

5 days, 5 hours ago

Transaction in Own Shares

6 days, 6 hours ago

Transaction in Own Shares

6 days, 16 hours ago

Transaction in Own Shares

1 week, 4 days ago

Transaction in Own Shares

1 week, 5 days ago

Transaction in Own Shares

1 week, 6 days ago

2 min read