Diversified Gas & Oil PLC (LON:DGOC) chief executive Rusty Hutson has described 2019 as a significant year with multiple key milestones having been reached.
The company’s financial results statement for the twelve months ended 31 December, confirmed that DGOC exited the year with production of around 94,800 barrels oil equivalent per day from its long-lived wells.
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It underlying profits (adjusted EBITDA) of US$273mln funded some US$135mln of distributions to shareholders – comprising US$82mln of dividends, 13.2 cents for the whole year and US$53mln of share buybacks.
DGOC noted that its dividends are protected by a hedging programme which see 90% of 2020 production at a floor gas price of US$2.70 per mmbtu and 66% of next year currently covered with a floor of US$2.66 per mmbtu.
Net debt totalled US$637mln at the end of December and the company had some US$230mln of liquidity.
Hutson said: “This year we achieved peak production of over 96 MBoepd, cementing ourselves as one of the largest independent producers on the London Stock Exchange.
“This level of production and our focus on operational efficiencies have allowed us to generate strong levels of free cash flow ensuring that, when combined with our strong hedge book and innovative financing instruments, we create significant shareholder value whilst continuing to maintain a healthy balance sheet.
“Our strategy remains focused on generating growth through acquisition, integration and efficient operations, whilst continuing to strengthen our foundations of business systems and corporate governance.”
The company is working to transition from AIM onto London’s main market.
Looking ahead, Hutson added: “We recognise that the environment in which we operate includes elements beyond our control, including weakness in natural gas prices due to excessive supply growth, a mild 2020 winter season and other macro-economic headwinds.
“However, as a company and to ensure we continue to deliver consistent and dependable shareholder value, DGO must and will remain focused on those aspects of our business that we can control - opportunistic hedging leveraging our long-life and low decline asset base, improved operational practises to reduce our unit cost expenses, and wise capital allocation to ensure that every dollar spent earns an appropriate return.
“We remain firm in our belief that our unique business model, built on low-cost, efficient operations, will allow us to sustain the current low U.S natural gas price environment.”