Monday 4 May 2020 8:28 am

Diversified Gas and Oil sticks with dividend as firm prepares for main market move

Diversified Gas and Oil today confirmed it would stick with its dividend despite unprecedented volatility in global oil markets as it prepares for its move to the main market of the London Stock Exchange later this month.

In an update on its first quarter performance, the US-based firm said it had maintained production levels in the period and would pay a dividend of 3.5 cents.

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The firm, which operates across the Appalachian region of the US, said it had produced 94,000 barrels of oil a day, in line with previous levels.

Diversified Gas and Oil also achieved earnings of $78m (£62.7m) in the period, which was also consistent with the prior period.

The firm said that maintaining its dividend despite the trying wider oil and gas environment showed that it was committed to its shareholders.

So far this year, the company has paid $22m to shareholders and has completed $16m of share buy-backs. 

In addition, the firm said that it had liquidity of $190m available to it. 

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For several weeks global oil prices have swung back and forth as producers seek to tackle an overwhelming surplus of oil on the back of little-to-no demand.

In the US, which has around 9,000 listed oil and gas companies, some firms have been forced to shut in production as storage facilities have reached near-capacity levels. 

Regulators in Texas will tomorrow vote to enforce mandatory production curbs in a bid to prevent the total oversupply of the market.

Diversified Gas and Oil chief executive Rusty Hutson said that the way the firm had navigated the uncertainty was a vindication of its 20-year-old business model:

“Navigating unprecedented market volatility and general economic uncertainty validates the business model DGO defined nearly 20 years ago. 

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“Our unwavering commitment to maintain a healthy balance sheet while protecting capital returns to shareholders through responsible and long-term hedging remains a top priority.

“Having now formally announced our plans to transition from AIM to a premium listing on the Main Market, I remain optimistic as ever about the firm’s future as we continue to evaluate ways to create long-term, sustainable value for shareholders.”