# Diversified Gas & Oil $575 million acquisition terms now agreed

- Link: https://www.directorstalkinterviews.com/diversified-gas-oil-575-million-acquisition-terms-now-agreed/412753469
- Published: 2018-06-27T08:12:49+01:00
- Author: Giles Arbor

**Diversified Gas & Oil PLC** (LON:DGOC), a US based gas and oil producer, announced
on 14 June 2018 that it had signed a non-binding letter of intent to acquire a network
of further gas and oil producing assets in the Appalachian Basin for a total cash
consideration of approximately $575 million. The Company has today confirmed that
it has now finalised the terms of the agreement to acquire the Target Assets, and
anticipates that this agreement will be signed shortly. Details of the Acquisition
will be set out in an admission document and circular to Shareholders which is expected
to be published by not later than 7.00am on 29 June 2018.

**Highlights**

* Diversified Gas & Oil PLC will become one of the top producers on the London Stock
Exchange on completion of what will be the Company’s largest acquisition to date,
with net production rising to approximately 58,381 boepd

* The $575 million acquisition will be the largest acquisition by an Oil & Gas company
in the history of the AIM Market

* The Acquisition will more than double production and increases PDP Reserves to
393 mmboe

* The pro forma uplift in 2017 EBITDA is estimated to be approximately 225% (2)

* The Acquisition will be immediately accretive to per share cashflow and earnings.

The Acquisition is to be financed through an extension of the Company’s existing
syndicated bank facility and through a share placing to raise up to $250 million
at a Placing Price of 97p per share.

As previously announced and upon completion, DGO’s total net acreage under lease
will increase from 4.0 million acres to 6.5 million acres. Proven developed producing
reserves (PDP) will increase by 142% to 393 mmboe with a PV-10 value of $1,388 million
from the current 163 mmboe with a PV-10 value of $589 million.

The Acquisition will include a significant extension to the Company’s existing pipelines
and network of compression stations. The Target Assets also include a wholly-owned
midstream gathering and compression system with approximately 6,400 miles of pipeline
and 59 compressor stations.

Further details of the Loan Facility and the Placing will be announced shortly and
will be set out in full in the Admission Document.

**Notes:**

(1) Net daily production as at 31 March 2018 is a pro forma figure over the first
quarter of 2018 to include the Alliance Petroleum Corporation and CNX asset acquisitions
that closed on 7 March 2018 and 29 March 2018, respectively, presented as if closed
on 1 January 2018.

(2) Based on pro forma estimate of 2017 EBITDA, including full year contributions
from the Alliance Petroleum Corporation and CNX asset acquisitions.

(3) Figures in this announcement are based on a USD:GBP exchange rate of £1 = 1.3216,
as at 27 June 2018

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