AIM:DGOC (IC)24 Apr 2018 19:44
Investors chronicle (IC) included them in their AIM 100 Feature at #77. An interesting coverage.
"Lofty buy-and-build promises are de rigeur for IPOs on the junior market, although somewhat unusual when it comes to oil and gas stocks. Between listing in February 2017 and creeping into this year’s top 100 Diversified Gas & Oil (DGOC) has proved that the business model is feasible even for energy stocks. It involves buying portfolios of low-cost, low-risk and long-life oil and gas wells in Appalachia for no more than four times’ annual cash flows; reducing overheads and margins and guaranteeing stable cash flows through hedging; and using those cash flows to grow dividends and fund new acquisitions.
As a $180m equity raise to fund two such deals recently showed, DGO has the ear of income-hungry investors, and the track record to suggest it can repeat the trick again. Indeed, management’s ability to find more deals at the right price is likely to be the bigger driver of shareholder value in 2018, as natural gas prices – although hedged and profitable at their current levels – have proved volatile in recent months, and are forecast to remain below $3/mmbtu. At 85p, the shares carry a trailing dividend of 4.6 per cent. Buy. AN'