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Diversified Gas & Oil unveils another major acquisition in the United States

A US$575mln deal, supported by a new US$1bn lending facility, is due to add 11,350 additional wells and will more than double production volumes
oil and gas operations
The new package represents some 32,100 boepd

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.

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