Diversified Gas & Oil PLC (ticker: DGOC) closed an $85 million cash purchase of certain oil and gas leaseholds, wells, working interests, licenses, related equipment and other assets from CNX Gas Company LLC on March 29, 2018. The effective date of the transaction was January 1, 2018.
With the acquisition of the assets from CNX Gas Company, and additional assets purchased from Alliance Petroleum earlier this month, DGOC estimates its total net working interest production now exceeds 28,000 BOEPD. DGOC’s net working interest of proved developed producing (PDP) reserves is approximately 173 MMBOE.
DGOC’s borrowing base under its $500 million credit facility led by KeyBank National Association increased to $200 million from its prior $140 million level, providing DGOC the liquidity to pursue additional acquisition opportunities without the need for additional equity capital and without exceeding its commitment to maintain a low leverage profile. The credit facility significantly reduced the company’s interest rate from nearly 10% on amounts outstanding under its previous facility agreement to approximately 4.5% on current borrowings under this credit facility.
“Over the past 30 days, we have nearly tripled our net daily production, more than tripled our PDP reserves and halved our cost of borrowing.” Said Diversified CEO Rusty Hutson.
