Proposed Acquisition of Alliance Petroleum Corporation and
certain gas and oil assets in the Appalachian Basin
Placing of 166,400,000 new Ordinary Shares of 1 pence each at 80 pence per Ordinary Share
Diversified Gas & Oil PLC (AIM: DGOC), a US based gas and oil producer, is pleased to announce that it has signed a conditional sale and purchase agreement to acquire the entire share capital of Alliance Petroleum Corporation (“Alliance Petroleum”). The Board also announces that the Company has agreed in principle to acquire certain producing gas and oil assets from a major NYSE listed energy company (“the Appalachian Vendor”). The wells of both Alliance Petroleum and the Appalachian Vendor are close to the Company's existing operations in the Appalachian Basin in the eastern United States, principally in Pennsylvania and West Virginia, with some wells in Ohio.
The Alliance Petroleum Acquisition is to be acquired for a total cash consideration of US$95.0 million (£66.9 million) and the cash consideration for the Appalachian Gas Acquisition is US$85.0 million (£59.9 million).
On Completion of the Acquisitions, the Company anticipates that its total net working interest production will increase by 173 per cent. to approximately 28,133 boed, and its net working interest PDP reserves will grow by 217 per cent to 173.2 MMboe, resulting in an annualised EBITDA of US$70-75 million.
The Company is also pleased to announce an oversubscribed conditional placing of 166,400,000 new Ordinary Shares of 1 pence each (the “Placing Shares”) at a price of 80 pence per share (the “Placing Price”), raising net proceeds of US$180 million (the “Placing”), to fund the Acquisitions. Mirabaud Securities LLP and Stifel Nicolaus Europe Limited were Joint Bookrunners for the Placing.