DGOC.L Regulatory News (DGOC)

London, UK, 15 June 2020

Edison issues outlook on Diversified Gas & Oil (DGOC)

On 18 May 2020, Diversified Gas & Oil (DGO) started trading on the Main Market of the London Stock Exchange (LSE), just over three years after its IPO on AIM. The company continues to offset Legacy assets' natural declines and keep operating costs low resulting in strong cash flow generation. Even though COVID-19 has affected global energy demand and the current commodity price environment, DGO has hedged c 80% of its natural gas production for FY20 and FY21 protecting its cash flows and shareholder returns. DGO recently announced two more opportunistic acquisitions in line with the company strategy. We update our valuation to reflect the impact of our new short- and long-term pricing assumptions and scenarios. Our mid-case valuation stands at 125.4p/share.

Our updated mid-case valuation currently stands at 125.4p/share. Changes to our valuation include updated short-term commodity prices based on the EIA's 9 June 2020 forecasts. We have also revised our long-term (2022 onwards) commodity price assumptions and we now present three different scenarios. In this note we also provide a peer analysis and compare DGO's multiples to other US onshore producers. We forecast an FY20 dividend yield of 10.4% at the current share price.

Click here to view the full report.

Subscribe to Edison's content to receive reports by email.

All reports published by Edison are free-to-access and available on the website.

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact Edison:

Carlos Gomes, +44 (0)20 3077 5700

oilandgas@edisongroup.com

Learn more at www.edisongroup.com and connect with Edison on:

LinkedIn https://www.linkedin.com/company/edison-group-

Twitter  www.twitter.com/Edison_Inv_Res

YouTube www.youtube.com/edisonitv