TIDMDGOC
RNS Number : 3696M
Diversified Gas & Oil PLC
28 July 2017
28 July 2017
DIVERSIFIED GAS & OIL PLC
("DGO" or the "Company")
AGM Statement
Board reorganisation
Diversified Gas & Oil PLC (AIM: DGOC), a US based gas and
oil producer, provides the following trading update ahead of its
Annual General Meeting to be held at 10.00 am today.
Highlights
-- Integration of recently acquired producing wells progressing smoothly and on schedule
-- Production anticipated to be 11,000 boepd net following
transference of final assets associated with Titan acquisition,
expected on or before 30 September 2017
-- Targeting operating cost of below $6 per flowing barrel of
oil equivalent (BOE) once the integration of Titan assets is fully
completed
-- Board reorganisation with Executive Chairman Robert Post
becoming Non-Executive Chairman with immediate effect
-- Senior appointments to our operating and corporate functions
to enhance operating oversight and execution
Since completing the acquisition of assets from Titan Energy
(Titan) in June, DGO has made considerable progress in integrating
the assets into the enlarged group and made the necessary
structural adjustments to the team to ensure that DGO maximises the
value of the acquisition. Bob Cayton, who joined from Titan, has
been appointed Senior Vice President of Operations with
responsibility for the management of all DGO's Appalachian field
operations. Bob and his team will oversee implementation of new
management processes and reporting frameworks to further improve
performance management, drive operating efficiencies and increase
output across our portfolio.
The Company has created the role of Senior Vice President of
Environment, Health & Safety (EH&S), a role commensurate
with operations the scale of DGO's. John (Jack) Crooks has been
appointed to the role to oversee a team of five experienced
professionals that will continue to deliver on DGO's commitment to
safety, regulatory compliance and environmental stewardship.
The management team also welcomes Eric M. Williams CPA as Chief
Financial Officer, whose appointment was announced on 7 July. Eric
will support Finance Director, Brad Gray, in his responsibilities
for accounting operations, financial reporting and investor
relations communications. Eric joins DGO from Callon Petroleum
(NYSE: CPE), where he spent the last seven years enhancing the
finance and investor relations functions of the company through a
period of intense growth. Eric qualified as an accountant from
PWC.
To ensure the smooth integration of the entire portfolio, DGO
has engaged the consulting expertise of Opportune, an energy
industry consulting firm based in Houston, who are working with the
DGO management through the duration of the process. Their
invaluable experience in integration events is adding rigour and
guidance to deliver a timely transition into the new enlarged
business.
As previously guided, certain assets associated with the Titan
Acquisition that are held within a public partnership structure,
are anticipated to be transferred to the Company after on or before
30 September. Completion of these assets remains on track and will
take DGO's gross production to circa 18,300 boepd (11,000 boepd
net).
Pleasingly, the underlying business has continued to perform in
line with expectations. DGO continues to deliver on the Company's
strategic objective to further reduce its already low production
costs through well optimisation, as well as the improvement of well
assessment and maintenance programmes. DGO achieved an operating
cost per flowing barrel of oil equivalent (BOE) of $8.26 in the
fourth quarter of FY16 and anticipates operating costs to fall
below $6 per BOE once the integration of Titan assets is fully
completed. As the industry experiences significant and continued
downward pricing pressure across the value chain, the DGO business
model and strategy for extracting additional value from its assets
provides robust protection in a challenging market.
The Company also announces today that Mr Robert Post will become
Non-Executive Chairman of DGO, relinquishing his executive director
responsibilities, with effect from 1 August 2017. Mr Post joined
DGO in 2005 and has overseen the Company's significant growth,
culminating in the successful admission to trading on AIM in
February 2017 and the transformational acquisition of assets from
Titan Energy. Following the completion of the recent acquisition
and strengthening of the executive management team, Mr Post now
intends to take a less prominent role in the Company's day to day
activities. He will remain available to assist the management team
as required and he remains the joint largest shareholder, alongside
founder and CEO Rusty Hutson Jr, with an interest of approximately
13.8% of the Company's issued share capital.
Commenting on his decision to become Non-executive Chairman, Mr.
Post said:
"I am immensely proud of what we have achieved with DGO since I
joined the company in 2005. DGO has established itself as one of
the largest conventional players in the Appalachian Basin and,
subsequent to our admission to AIM in February, we have become one
of the largest and one of the lowest cost producers on AIM. Under
the leadership of Rusty Hutson, the Company is extremely well
managed by a team with the requisite strength, depth and skills to
maintain this impressive momentum along the growth path. As such, I
have decided that it is the appropriate time to relinquish my
executive duties and I look forward to working alongside the Board
in my new capacity as Non-executive Chairman."
DGO's CEO Rusty Hutson Jr. added:
"Robert has been truly instrumental in our success and we look
forward to leveraging his ongoing leadership, business experience
and industry knowledge as he assumes the new role of Non-executive
Chairman.
We are pleased with the progress that we have made in terms of
integrating the assets that we acquired from Titan. The new assets
are highly complementary to our portfolio in terms of operational
and strategic synergies and we are already benefiting from lower
operating costs. We have identified areas for cost savings and
expect to be able to drive down our operating costs further as we
streamline our operations and increase our production."
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
Diversified Gas & Oil PLC
Rusty Hutson Jr., Chief Executive
Officer
Brad Gray, Finance Director + 1 (205) 408
www.diversifiedgasandoil.com 0909
Smith & Williamson Corporate
Finance Limited
(Nominated Adviser & Joint Broker)
Russell Cook
Katy Birkin +44 20 7131 4000
Mirabaud Securities LLP (Joint
Broker)
Peter Krens
Edward Haig-Thomas +44 20 3167 7221
Buchanan (Financial Public Relations)
Ben Romney
Chris Judd
Henry Wilson +44 20 7466 5000
About Diversified Gas & Oil
Diversified Gas & Oil PLC ("DGO") owns and operates gas and
oil producing wells in the Appalachian Basin, one of the largest
oil and gas fields in the US. The Company was founded in 2001 and
has grown rapidly in recent years, capitalising upon opportunities
to acquire conventional, low risk gas and oil producing assets.
After the completion of its most recent acquisition, DGO will have
a total, gross daily production of approximately 18,300 boepd. DGO
was admitted to trading on AIM in February 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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