The AIM-listed firm said it would pay US$50mln for the assets, which included 12 producing Utica gas wells and related facilities as well as some undeveloped lands.
Current production at the wells is around 46mln cubic feet of gas equivalent (MMcfe) per day, with their location in “close proximity” to DGO’s existing wells in Ohio, which the firm said would allow them to benefit from its asset concentration and economies of scale within the Appalachian Basin.
Rusty Hutson, Jr., the company’s chief executive, said the new wells were consistent with DGO’s acquisition strategy of “adding high-quality, long-life assets” to its portfolio.
“We are acquiring these wells at a fraction of the cost incurred to develop them and yet given their long-life nature, we will reap the margin-enhancing benefit from them for years to come”, he added.
The acquisition is due to complete in mid-September.