RE: Not FUD...21 Jul 2021 09:51
Mando,
Here are a few responses to your concerns from yesterday morning. These come straight from DEC:
Oaktree diligence
Rightly so, the individual assumes that Oaktree would spend time getting to know Diversified before agreeing to co-invest $1 Billion. As part of our mutual diligence on each other, our teams spent time in-person with each other, and Oaktree also did diligence on our “diligence” to determine whether we view risk/reward through the same lens when evaluating acquisition opportunities. One should see their decision to proceed in a public way as evidence of their confidence not only in our business model but also in Diversified as a high-quality operator of assets… with established field and corporate teams to drive their returns just as we work for shareholder returns.
Company name change
As a company, Diversified turns 20 next month. Accordingly, we are working with our PR Firm (Buchanan) to plan a celebratory / investor education day where we’ll celebrate our past, present and future… during which we’ll spend some time talking more specifically about the decision to change our name. At it’s core – you’ll appreciate that with 99% of our production coming from natural gas, having “Oil” in our name seemed a bit misaligned, particularly in a world increasingly focused on the transition to renewable energy where natural gas is widely accepted as a bridge fuel, and the cleanest of the hydrocarbon family. Further, Diversified has always stood for tangible returns for shareholders through dividend distributions. This fact dates back not just to the IPO, but dates back to Rusty purchasing his first set of wells to provide supplemental cash flow for his family. Accordingly, as energy transitions and other forms demonstrate the ability to generate positive cash flow, it’s quite possible that Diversified’s portfolio will include more than natural gas. Having a name that focused more broadly on Energy was better aligned with our strategy and better represents what we’re building.
Company ‘head office’
The individual recognizes that the Company’s corporate headquarters sits in Birmingham, Alabama housing just 42 of our nearly 1,100 employees. The vast majority of our personnel sit within our operations footprint across Appalachia in Pennsylvania, Kentucky, Ohio, West Virginia, Virginia and Tennessee.
You’ll appreciate that just as we’ve acquired many wells through our series of acquisitions, similarly we’ve acquired many regional and field offices also. In fact, we own ~37 properties including our corporate office, and lease 8 offices in certain cities including Canton, Ohio where the majority of my accounting team sits (~35 employees) along with a portion of our land team.
Always mindful of value, when possible – we do sell unutilized or under-utilized properties to create value… and we’re evaluating ways to further concentrate our footprint to ensure we’re as efficient as possible.
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