Diversified Gas & Oil PLC Completion of Acquisition (0406H)

TIDMDGOC

RNS Number : 0406H

Diversified Gas & Oil PLC

08 March 2018

8 March 2018

Diversified Gas & Oil PLC

("DGO" or the "Company")

Alliance Petroleum Corporation acquisition completion

Diversified Gas & Oil PLC (AIM: DGOC), a leading independent US based gas and oil producer focused on the Appalachian Basin, is pleased to confirm that the Company has completed the acquisition of Alliance Petroleum Corporation ("Alliance Petroleum"). DGO announced on 31 January 2018 that it had signed a conditional sale and purchase agreement to acquire the entire share capital of Alliance Petroleum from Lake Fork Resources Acquisition Corporation ("LFRA"). The conditions of the sale and purchase agreement have been met in full, with the acquisition being effective from 1 March 2018.

The total consideration for the Alliance Petroleum acquisition is US$95.0 million (GBP66.9 million) comprising the purchase price of US$70 million (GBP49.3 million), plus repayment of certain debts of Alliance Petroleum in the amount of US$25.0 million (approximately GBP17.6 million). The consideration has been met from the Company's own resources, following completion of the $189 million share placing on 20 February 2018.

As previously announced, the assets of Alliance Petroleum comprise gas wells close to the Company's existing operations in the Appalachian Basin principally in Pennsylvania and West Virginia, with some wells in Ohio. Alliance Petroleum has proven reserves of approximately 49.3 MMboe with an estimated NPV(10) of US$168 million (GBP118.3 million), as estimated by Wright & Co., the Company's independent reserves auditor. Current net daily production is approximately 53 Mcfed (8.8 kboed). Based on trading in the 11 months to 30 November 2017 Alliance Petroleum generated unaudited annualised pre-tax profits of US$13.5 million (GBP9.5 million).

Following completion of the acquisition the Company estimates that net daily production will increase from approximately 62 Mcfed to 115 Mcfed (19.1 kboed).

CEO Rusty Hutson commented:

"We are pleased to have completed this acquisition in line with our previously stated timeframe. The acquisition of Alliance Petroleum adds high quality assets that complement our existing portfolio, as well as an experienced operating team who will work diligently with our existing team to ensure a seamless transition of ownership. Collectively, we now turn our attention to the integration and optimisation of these assets, leveraging our expanded footprint to drive operational efficiencies and lower operating costs. We also remain on track with regards to our other transformative acquisition of assets from CNX Gas Company LLC, which will further cement our position as the largest producer on AIM when that transaction completes in the next few weeks."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information contact:

 
 Diversified Gas & Oil PLC 
  Rusty Hutson Jr., Chief Executive 
  Officer 
  Brad Gray, Chief Operating Officer 
  and Finance Director 
  Eric Williams, Chief Financial Officer     + 1 (205) 
  www.diversifiedgasandoil.com                408 0909 
 
 Smith & Williamson Corporate Finance 
  Limited 
  Nominated Adviser & Joint Broker 
  Russell Cook                               [phone] 
  Katy Birkin                                 4000 
 
 Mirabaud Securities Limited 
  Joint Broker 
  Peter Krens                                [phone] 
  Edward Haig-Thomas                          7222 
 
 Stifel Nicolaus Europe Limited 
  Joint Broker 
  Callum Stewart 
  Nicholas Rhodes                            [phone] 
  Ashton Clanfield                            7600 
 
 Buchanan 
  Financial Public Relations 
  Ben Romney 
  Chris Judd 
  Henry Wilson                               [phone] 
  [e-mail]                         5000 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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March 08, 2018 02:00 ET (07:00 GMT)