Diversified Gas & Oil - Transaction first thoughts and metrics
Diversified Gas & Oil (DGO) has announced the acquisition of 107 gross producing wells in Appalachia with combined 2018 net production of 21kboed (100% gas) and proven developed producing (PDP) reserves of 92mmboe for a total purchase price of $400m. This consideration is to be funded through $234m of new equity and drawdown under DGO’s existing RBL facility. Management expects the transaction to be accretive to FCF/share (+19%), with the potential to increase dividend payments to an annualised $0.16/share. Management estimates that leverage would remain below a target range of 2–2.5x at 1.8x net debt to pro forma FY18 adjusted EBITDA. New shares are to be admitted for trading on 18 April 2019. Our forecasts and valuation are under review (see our last published note).Diversified Gas & Oil is an Appalachian Basin focused natural gas and crude oil operations company.
Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.
.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.