Diversified Gas & Oil acquires 550 Ohio wells

Appalachian Basin-focussed producer Diversified Gas & Oil announced the acquisition of 550 wells in Central Ohio from NGO Development Corporation on Friday.

The AIM-traded firm said the acquisition purchase price was $3.1m, met in cash from its existing resources.

Net production of the acquired wells was approximately 1,300 million cubic feet equivalent per day, or 220 barrels of oil equivalent per day.

The board said the acquisition was immediately accretive to operating cash flows, and was consistent with its prior acquisition criteria.

Diversified said it was assuming immediate control of operations of the wells, which are located in “close proximity” to its existing operations.

“This bolt-on acquisition is in line with our growth strategy,” said Diversified CEO Rusty Hutson Jr.

“It provides yet more scale to our operations in the prolific Appalachian Basin and further enhances our production and cash flows.”

Hutson said the deal was “attractively priced” and in line with its acquisition criteria in terms of valuation metrics and geographic proximity to its existing operational footprint.

“Our ability to source and execute on deals of this kind is a key differentiator and we continue to opportunistically identify additional assets that complement and grow our existing portfolio and generate the consistent and low-risk cash flows that underpin our business model.”