AIM-Listed Diversified Expands in US

AIM-listed Diversified Gas & Oil, a mature US gas fields producer, has agreed to buy a similar firm for some $183mn, it said October 11.

Its acquisition of Core Appalachia Holding comprises $130mn paid in cash, and issuance of 35mn shares at an effective issue price of £1.15 ($1.51) per share. The assets complement upstream/midstream assets it acquired from EQT in July 2018, it added.

Core Appalachia produces about 11,200 barrels of oil equivalent per day, of which 90% is gas, from some 5,000 wells in Kentucky, West Virginia and Virginia – with upside for natural gas liquids – plus 4,100 miles of gas gathering pipes. It increases Diversified’s midstream assets to more than 10,500 miles of pipe covering a significant portion of Kentucky and West Virginia and its production by 19% to about 71,000 boe/d. Of the $130mn cash, $93mn will be drawn from Core's revolving credit facility led by KeyBank, with an incremental draw of $40mn under its existing KeyBank debt facility.