Diversified Gas & Oil shares decline after acquisition
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AIM-listed Diversified Gas & Oil (LON:DGOC) has announced the acquisition of Core Appalachia for a total consideration of $183 million of which $130 million will be paid in cash with the remainder in shares. The company said that the purchase would have an immediate positive impact on earnings and cash flow.
Core Appalachia currently produces 11,200 barrels a day from 5,000 wells in Kentucky. CEO Rusty Huston said: “This acquisition increases our exposure to liquids pricing, and the expansion of our midstream assets enhances the underlying economics of our sizeable proved-developed-producing reserves by allowing us to realize the processing uplift from our natural gas liquids while simultaneously reducing our transportation costs. Additionally, the midstream assets allow us the optionality to move our production to different sales points, maximizing realized pricing“.
Diversified Gas & Oil shares were down 2.28% at 107p (as of 15:15 BST).
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