Diversified Gas & Oil PLC (LON:DGOC) has said its average production increased by 18% to around 100,000 barrels of oil equivalent per day (boepd) in. 2020, marking a new company record.
The company noted that its ‘Smarter Asset Management’ programme continued to offset natural declines within the portfolio.
It also pointed out that operating expenses were marked at US$5.58 per barrel, whilst total cash costs equated to US$6.93 per barrel. A robust hedging portfolio, meanwhile, provides the company with cash flow and dividend stability, the group added.
Looking ahead, DGOC highlighted an improved pricing outlook which it says is a constructive backdrop.
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In a statement, Rusty Hutson, DGOC chief executive, said “the unprecedented events of 2020 have underscored the inherent resilience of our business model."
He added: "We've built our business to operate in any natural gas price environment, and the strength of that model was evident throughout the significant volatility of 2020. With our successes last year, we are positioned to enter 2021 with momentum including our most recent fourth-quarter complementary bolt-on acquisition of unconventional assets.
“With a strong balance sheet, efficient cost structure, improved commodity price outlook, strong hedge protection and a robust outlook of potential accretive growth, we are poised for another exceptional year.”
In the fourth quarter, the company added an accretive bolt-on acquisition - of five unconventional wells in Ohio, for US$8.4mln – and DGOC’s chief executive hinted that more deals are to come.
The acquisitive London-listed gas and oil company also said that the number of high-quality opportunities, which could meaningfully enhance production, continue to increase with prolonged lower commodity prices.
Participants in the sector are also increasingly motivated to consolidate, according to Hutson.
“As we've demonstrated with each previous transaction, additional scale can further improve efficiencies and support the high cash operating margins that add stability to our dividend," he added.