Diversified Gas & Oil is about to become Aim's largest producer after picking up new assets for $180m

 
Courtney Goldsmith
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Diversified Gas & Oil produces oil from the Appalachian region of the US (Source: Getty)

Appalachian-focused Diversified Gas & Oil (DGO) will become the largest producer on London's junior market following the completion of two acquisitions worth $180m (£127m) announced this evening.

The US-based firm, which floated on the Alternative Investment Market (Aim) this time last year, bought US producer Alliance Petroleum Corporation for a total consideration of $95m as well as certain producing gas and oil assets from a "major NYSE-listed energy company" for a total of $85m.

On completion, the company expects its production to rise by 173 per cent to about 28,133 barrels of oil equivalent per day.

Chief executive Rusty Hutson said: "These transformative transactions come almost exactly one year after we joined Aim. At that time we stated that acquisitions would be a core part of our growth strategy as we capitalise on the unique opportunity presented in our region of focus."

Hutson added that DGO is one of only a handful of UK-listed independent explorers and producers that pays a regular dividend, and the transactions announced today will enhance the group's ability to return more cash to shareholders.

The firm also announced it raised net proceeds of $180m in an oversubscribed placing through the issue of 166m new shares to fund the acquisitions.

"We are delighted with the strong support shown during the placing by both new and existing shareholders, and look forward to repaying their faith in the business and management team," Hutson said.

Read more: This Appalachian-focused oil firm is listing in London tomorrow

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