Updates

Diversified Gas & Oil

July 2020

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Diversified Gas & Oil has announced the acquisitions of certain assets from Carbon Energy and EQT for a gross aggregate consideration expected to be US$235m. It has also raised US$85m through the issue of 64.3m new shares (10% of share capital) to help fund them. The balance will come from a new US$160-165m long-term loan. The acquisitions will bring in 7,000 new wells with combined adjusted 2019 net production of 18,000 barrels per day (99% natural gas), as well as 4,900 miles of gas gathering assets. Based on company due diligence, adjusted EBTITDA from these assets is expected to be US$61m-US$65m or 3.3x net debt / ebitda and is expected to be eps enhancing by as much as 14% according to broker Cenkos, althou ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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