logo-loader
viewDiversified Gas & Oil PLC

Diversified Gas & Oil strikes gas gathering acquisition

“These small, yet strategically complementary bolt-on acquisitions will add scale to our midstream capabilities," said chief executive Rusty Hutson.

Diversified Gas & Oil PLC - Diversified Gas & Oil strikes gas gathering acquisition
60% of the gas in the systems is produced by DGOC

Acquisitive Diversified Gas & Oil PLC (LON:DGOC) has unveiled new deals to acquire additional assets for US$7.5mln.

It is acquiring two separate packages of natural gas gathering systems in Pennsylvania and West Virginia, which are expected to enhance margins.

The company, in a statement, highlighted that the assets currently move approximately 109,000 MMBtu of natural gas per day, of which 60% comes from DGOC production operations.

Moreover, it described the assets as being strategically important. The acquisitions allow the company to control the flow of production thus increasing ‘optionality to re-route gas to sales points with higher realised prices’.

The deal eliminates risk for future rate increases to move gas on the systems.

It expects the deal will increase third-party midstream revenues by over US$3mln per year. The company said that it also sees opportunities to deploy DGO's expertise to enhance the systems' efficiency with incremental, low-cost and short pay-back maintenance initiatives.

"In keeping with DGO's growth strategy, we have capitalized on the opportunity to acquire what has become non-core assets for these sellers,” said Rusty Hutson, DGOC chief executive.

“These small, yet strategically complementary bolt-on acquisitions will add scale to our midstream capabilities and provide a high level of optionality with regards to both routes to market and improved pricing. 

“These acquisitions further diversify our operations and revenue streams and strengthen our long-term ability to control costs and protect margins."

Quick facts: Diversified Gas & Oil PLC

Price: 101.5 GBX

AIM:DGOC
Market: AIM
Market Cap: £662.61 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 boosts production by 10% in third quarter

Diversified Gas & Oil PLC (LON:DGOC) CEO Rusty Hutson tells Proactive New York that the company has flagged up third-quarter production growth of 10%, at 91,100 barrels oil equivalent per day (boepd) compared to its 2Q. Hutson says growth is being driven by its current hedge program,...

on 14/11/19

RNS

Transaction in Own Shares

23 hours, 57 minutes ago

Transaction in Own Shares

1 day, 23 hours ago

Transaction in Own Shares

4 days, 23 hours ago

Transaction in own shares

5 days, 9 hours ago

Transaction in Own Shares

6 days, 10 hours ago

Transaction in Own Shares

1 week, 1 day ago

Transaction in Own Shares

1 week, 1 day ago

Transaction in Own Shares

1 week, 2 days ago

2 min read