Acquisitive US oil firm Diversified Gas & Oil PLC (LON:DGOC) has agreed a deal to pick up more assets, paying US$575mln for additional assets in the Appalachian Basin.
The next package of assets comprise some 11,350 wells yielding 32,100 barrels oil equivalent per day.
WATCH: Diversified Gas & Oil enjoying 'robust production and increasing cashflow'
It will increase the group’s total outcome by 114%, compared to the daily rate measured at the end of March. Moreover, it is forecast to increase earnings (EBITDA) by 289%.
In terms of physical assets, the net acreage under lease expands to 4mln acres to 6.5mln acres, and, the reserves jump 142% to 393mln barrels oil equivalent, from 163mln barrels. Additionally, it adds more infrastructure such as pipelines and compression stations.
The deal will be funded by a new debt facility, of up to US$1bn, which begins with a borrowing base of US$600mln – some US$376mln will be drawn from the facility for the transaction.
It will constitute a reverse takeover under AIM market rules, and as such, the London quoted shares are now suspended.
Earlier this year, the company completed two major acquisitions in the Appalachian Basin.