(Alliance News) - Diversified Gas & Oil PLC said it achieved record 2020 average daily production while its cash operating expenses and total cash expenses both shrank.
In 2020, Diversified's average daily production hit a record of approximately 100,000 barrels of oil equivalent per day, up 18% year-on-year from 85,000 boepd.
Production from legacy assets shrank 1% year-on-year to around 69,000 boepd from 70,000 boepd.
Diversified explained that: "The company's success was underpinned by its consistent and diligent Smarter Asset Management programme and the successful acquisition and integration of accretive upstream and midstream acquisitions."
Furthermore, the company's annual cash operating expenses dropped 15% to USD5.58 per barrel of oil equivalent from USD6.54 per boe with 2020 total cash expenses including general and administrative expenses down 10% at USD6.93 per boe from USD7.71 per boe.
Diversified said its "operating efficiencies and consistent production" had contributed to lower expenses per unit, although savings were partially offset by higher adjusted general and administrative expense supporting its move to London's Main Market from AIM.
Diversified's liquidity stands at around USD210 million, including cash on hand and undrawn amounts on its revolving credit facility. In 2020, the company shrunk its outstanding debt via USD82 million of debt principal payments, resulting in approximately USD725 million of net debt and a net debt to adjusted earnings before interest, tax, depreciation, and amortisation ratio of 2.2 times on December 31.
The company also announced it has entered into an agreement to cancel 2.4 million warrants held by Mirabaud Securities Ltd and former Mirabaud employees for approximately GBP1.0 million. After this 1.1 million warrants will remain outstanding.
The company also appointed Tennyson Securities as joint broker. Tennyson is the new home of the primary tam joining from Mirabaud, keeping the firm's broking relations continuous.
Chief Executive Rust Hutson Junior said: "With our successes last year, we are positioned to enter 2021 with momentum including our most recent fourth-quarter complementary bolt-on acquisition of unconventional assets. With a strong balance sheet, efficient cost structure, improved commodity price outlook, strong hedge protection and a robust outlook of potential accretive growth, we are poised for another exceptional year.
"Our opportunities to acquire high-quality assets that enhance or meaningfully enlarge our portfolio continue to increase with prolonged lower commodity prices and a sector increasingly motivated to consolidate. As we've demonstrated with each previous transaction, additional scale can further improve efficiencies and support the high cash operating margins that add stability to our dividend."
Shares in Diversified were down 0.6% at 113.55 pence in London on Wednesday morning.
By Anna Farley; annafarley@alliancenews.com
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