DGOC.L Regulatory News (DGOC)

7 November 2019

DIVERSIFIED GAS & OIL PLC("DGO" or the "Company")

DGO Divests Uncompleted Wells, Undeveloped Acreage from EdgeMarc Acquisition

Diversified Gas & Oil PLC (AIM: DGOC), the U.S. based owner and operator of natural gas, natural gas liquids, and oil wells and midstream assets, is pleased to announce the sale of its non-producing assets recently acquired in Monroe County, Ohio for total cash consideration of $10 million (the "Assets"). The Assets include three Drilled-and-Uncompleted ("DUC") wells classified as proved undeveloped wells and certain undeveloped acreage containing additional Utica drilling locations.

DGO acquired the Assets from EdgeMarc Energy Holdings, LLC ("EdgeMarc"), as described in its announcement on 19 September 2019. Successfully monetising these Assets reduces DGO's net investment in the 12 producing Utica wells acquired in the same transaction to approximately $38 million, net of purchase price adjustments, more than 20% less than the original $50 million (gross) purchase price. Accordingly, the Company's investment in the acquired producing wells falls from approximately 3.0x projected cash flows to less than 2.5x and improves an approximate PV14 value paid to an estimated PV24 value as of the acquisition date.

After carefully evaluating various means by which to extract value from the non-producing Assets, the Company determined that their monetisation further demonstrates its commitment to efficiently operate producing assets, reduce debt and enhance liquidity as it evaluates other assets that fit its strategy.

Rusty Hutson, Jr., CEO of the Company commented:

"Consistent with our track record of allocating value only to producing assets, and in line with our previously stated intentions to achieve maximum benefit from the non-producing Assets, I am pleased to enhance the value of our recent acquisition of the 12 producing Utica wells from EdgeMarc by successfully monetising these Assets. The sale demonstrates our ability to remain focused on our strategy of efficiently managing our producing assets while moving quickly to extract value from assets better suited in another's portfolio. These proceeds allow us to incrementally reduce borrowings on our credit facility thereby providing liquidity for the various opportunities we routinely evaluate as we seek to continue our strategy of acquiring and optimising producing wells."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.