StockMarketWire.com - Diversified Gas & Oil said Thursday it had acquired Core Appalachia from TCFII Core for a total of about $183m in a cash and shares a deal.

Under the terms of the deal, Diversified Gas & Oil paid $130m in cash to TCFII Core and issued 35m shares of 1p at an issue price of £1.15 a share.

The acquisition would support the company's upstream and midstream assets acquired from EQT in July, and allow the company to unlock 'significant incremental value through consolidation to a single operator,' said Diversified Gas & Oil.

Following the acquisition, the company expected total net working interest production would increase by 19% to approximately 71,000 barrels of oil a day, and net working interest PDP reserves would increase by 25% to 493mmboe.

'Our strategic acquisition of Core will allow us to unlock significant value from our enlarged base of assets in Kentucky and West Virginia that would otherwise not be achievable on a stand-alone basis. Core's assets are highly contiguous to the assets we acquired from EQT earlier this year and materially expand our midstream footprint in Southern Appalachia, said Diversified Gas & Oil's CEO Rusty Hutson said.

'We expect to deliver both immediate and near-term synergies by combining these assets, resulting in higher revenues and lower operating expenses which will support our exceptional EBITDA margins across the portfolio and drive dividend payouts higher.'

'Additionally, the midstream assets allow us the optionality to move our production to different sales points, maximizing realized pricing. We have strategically diversified our business beyond upstream, and now own a significant network of gathering assets in Kentucky and West Virginia providing added control over the flow of our production and an additional revenue stream as we transport gas for other operators.'


At 10:11am: [LON:DGOC] Diversified Gas Oil Plc share price was +3.25p at 112.75p



Story provided by StockMarketWire.com