Diversified Gas & Oil PLC (LON:DGOC) chief executive Rusty Hutson said he was exceptionally pleased with the resilience of the company’s business model, as it released full-year results for 2020.
Earnings (adjusted EBITDA) rose by 10% to US$301mln (£217mln) for the year, bolstered by hedge cash settlements of US$145mln which significantly offset lower gas prices during the year.
It reported a US$23mln net loss, versus US$99mln in net income in the prior year.
Revenue, including the hedge income, totalled US$553mln marking an 8% increase on 2019’s tally.
DGOC achieved a new company record for production, with the 2020 exit rate measuring around 100,000 barrels oil equivalent per day which is some 18% above the volume at the end of 2019.
READ: DGOC says 2020 production rose by 18%
Total operating expenses were reduced by 15%, on a per thousand cubic feet basis.
The company said it remains “proactive and opportunistic” as it aims to protect cash flows and dividend stability through hedging – like in 2020, some 90% of 2021’s natural gas volumes are protected by hedges, with an average floor price of US$2.94 per thousand cubic feet, and 65% of the anticipated H1 2022 volumes are hedged at US$2.84.
During the year, DGOC continued its acquisitive strategy picking up US$245mln worth of assets to expand scale and reduce unit costs.
DGOC also highlighted that it exceeding its 80 well retirement commitment, shutting off a total of 92 wells. Meanwhile, it also extended its retirement agreement by 10 years.
The company ended the year with US$725mln of net debt, and more than US$210mln of liquidity.
"I am exceptionally pleased with our results in 2020 as they reflect the resilience of our business model and its proven ability to consistently deliver shareholder value and returns, even in the most challenging of markets,” Hutson said in a statement.
“Our commitment to value-accretive growth, operational excellence, cost discipline, and risk mitigation drove the group's solid performance through turbulent times.
“Our long-standing strategy of focusing on low-risk assets and reliable cash flows position DGO for further growth, and enables us to maintain our firm commitment to shareholder returns, evidenced by the increase in our per-share dividend, which we raised twice, or 14%, during the year.”
DGOC shares were admitted to London’s main market in May and was subsequently added to the FTSE 350.