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DJ Diversified Gas & Oil Corp. Intention to Float on AIM

8 November 2016 
                           Diversified Gas & Oil plc 
                     ("DGO", the "Company" or the "Group") 
                           INTENTION TO FLOAT ON AIM 
Diversified Gas & Oil PLC, a US based gas and oil producer, is pleased to 
announce its intention to seek admission of its issued, and to be issued 
ordinary shares, to trading on the AIM Market of the London Stock Exchange 
("Admission").  The Company is seeking to raise approximately $60 million (GBP 
48.0 million) by way of a placing of new ordinary shares and expects that 
Admission will occur in December 2016. 
DGO operates a number of conventional gas and oil producing wells across Ohio, 
Pennsylvania and West Virginia within the Appalachian Basin, one of the largest 
on-shore oil and gas fields in the United States.  The Group's daily production 
is in excess of 4,400boe from an estimated 24.1 million boe of proven developed 
producing reserves.  The Company has a further 3.8 million boe of proven 
undeveloped reserves.  DGO's operational structure enables it to generate 
significant operating free cash flow, even in the current low energy price 
environment, with an average operating cost equivalent to $9.53/boe. 
The Company has grown rapidly over the last two years, capitalising upon 
opportunities to acquire conventional, low risk, gas and oil producing assets 
from the larger US operating companies who typically are increasingly focused 
upon the larger scale opportunities across the United States from 
unconventional shale production.  As a specialist operator of these 
conventional gas and oil assets, DGO is able to identify significant 
operational cost savings and to improve production efficiency in areas 
overlooked by the larger operators. Since 2014, through a series of 
acquisitions, the Company has successfully developed its portfolio of assets 
 which are now generating consistent positive cash flows. 
Acquisitions to date have been financed largely through borrowings.  As at 30 
June 2016, DGO had total net assets of $27.7 million and total borrowings of 
$42.5 million. 
The Directors believe that the Company is well positioned to acquire further 
conventional assets and has a strong pipeline of further acquisition 
The Group's gas and oil production in the six months to 30 June 2016 was 
428,522 boe, up from 129,277 boe in the same period for 2015.  Revenues for the 
six months to 30 June 2016 were $7.6 million (2015: $2.9 million).  The Board 
anticipates that the Company will generate significant cash flows from its 
producing assets and that it will establish a progressive dividend policy, with 
a maiden dividend to all shareholders in respect of the year to 31 December 
2016 expected to be paid on or before 30 June 2017. 
Investment case 
  * DGO is a growing gas and oil production company which has grown rapidly 
    over the past two years by a series of successful acquisitions of producing 
  * DGO is focused on the Appalachian Basin, an area of prolific hydrocarbon 
    producing performance, which is geologically regarded as a low-risk oil and 
    gas play 
  * Low-cost, profitable production of over 4,400 boepd 
  * Cash flow positive and able to adopt a progressive dividend policy.The 
    Company expects to pay dividends semi-annually, the maiden dividend 
    expected to be paid in or before June 2017 
  * Experienced Board and management with a proven track record for acquiring, 
    integrating and enhancing conventional oil and gas production assets at 
    compelling valuations 
  * Focus upon onshore conventional opportunities arising from: 
      + Larger exploration and production companies concentrating on 
        unconventional / shale hydrocarbon development 
      + Lower cost and low risk profiles of conventional assets 
  * Intention to raise approximately $60 million (approximately GBP48.0 million) 
    by way of a placing to strengthen the Group's balance sheet, enablingthe 
    Company to fund further acquisitions and to meet its wider working capital 
Rusty Hutson, Founder and Chief Executive Officer, said: "DGO is at an exciting 
stage of development.  We have demonstrated our ability to acquire sound gas 
and oil producing assets and to further increase the productivity of those 
assets.   There is a strong pipeline of similar assets available to us, and 
with the support of the AIM market we intend to capitalise on these 
opportunities to create additional value and to secure long  term positive cash 
flows for the benefit of DGO's shareholders. 
We believe that the timing and appetite for our investment story is strong. We 
are not reliant on speculative resource exploration or development but offer 
investors exposure to a sound, profitable dividend-paying play on the US energy 
Diversified Gas & Oil plc 
Rusty Hutson, Chief Executive Officer 
Brad Gray, Finance Director 
+ 1 (205) 408 0909 
Smith & Williamson Corporate Finance Limited (Nominated Adviser & Joint Broker) 
Russell Cook 
Azhic Basirov 
Katy Birkin 
+44 20 7131 4000 
Mirabaud Securities LLP (Lead Broker) 
Peter Krens 
Edward Haig-Thomas 
+44 20 7878 3362 
Buchanan (Financial Public Relations) 
Ben Romney 
Bobby Morse 
Chris Judd 
+44 20 7466 5000 
Company Overview 
DGO owns and operates a number of conventional gas and oil producing wells in 
the Appalachian Basin in the North Eastern United States.  The Company has 
grown rapidly over the last two years, capitalising upon opportunities to 
acquire conventional, low risk oil and gas producing assets from the larger US 
operating companies who are today focused increasingly upon the opportunities 
elsewhere from unconventional shale production.  Total production in the six 
months to 30 June 2016 was 428,522 boe, up from 129,277 boe in the same period 
for 2015.  Revenues for the six months to 30 June 2016 were $7.6 million (2015: 
$2.9 million). 
The Company's operations are based entirely in the neighbouring states of Ohio, 
Pennsylvania and West Virginia, which cover part of one of the largest oil and 
gas fields in the US, known as the Appalachian Basin. 
The Group began trading in 2001.  DGO has a head office in Birmingham, Alabama 
and was incorporated England and Wales as a public limited company on 31 July 
2014 by its founders, Robert "Rusty" Hutson Jr. and Robert Post. 
Strategy for growth 
DGO's strategy for growth is two-fold: 
  * Primary focus on acquiring and consolidating long-life, low-cost 
    conventional producing oil and gas assets at compelling valuations 
  * To enhance the portfolio through active operating work programme, including 
    workovers and infill low-cost development wells. 
Acquisition and consolidation strategy 
The recent advances in shale production have caused a significant shift in 
emphasis of many investors and companies in mainland USA. The drive for shale 
investment has resulted in conventional gas and oil opportunities becoming 
available at reasonable prices. The Board believes these opportunities will 
continue as energy prices remain in the current trading range, which will help 
drive DGO's acquisition strategy. 
DGO Bondholders 
DGO has approximately $13.4 million of unsecured 8.5% bonds maturing in June 
2020 (the "Bonds").  Under the terms of the Bonds, eligible Bondholders are to 
be offered the opportunity to convert their Bonds into ordinary shares at the 
time of Admission or to receive a cash offer for repayment of the Bond (or a 
combination of both).  The Company intends to write to Bondholders to advise 
them of these proposals shortly. 
Board of Directors 
Robert Marshall Post, (60), Executive Chairman 
Mr. Post joined Diversified Gas & Oil in 2005 and is a 50% owner with Mr. 
Hutson.  Mr. Post was Controller for Whiting Corporation for 3 years.  He then 
purchased TramBeam, an overhead crane company, from Whiting Corporation and 
owned and operated the business for 20 years.  Mr. Post sold TramBeam in 2002 
to a London based corporation, FKI Industries.  He has a B.S. degree in 
Accounting (Finance minor) from Jacksonville State University - Alabama. 
Robert "Rusty" Russell Hutson, (47), Chief Executive Officer 
Before founding Diversified Gas & Oil in 2001, Mr. Hutson held finance and 
accounting roles for 13 years at Bank One (Columbus, OH) and Compass Bank 
(Birmingham, AL).  He finished his banking career as CFO of Compass Financial 
Services.  Mr. Hutson has a B.S. degree in Accounting from Fairmont State 
College - West Virginia.  He is a former CPA (Ohio). 
Bradley Grafton Gray (48), Finance Director and US Chief Operating Officer 
Prior to joining Diversified Gas & Oil in October 2016, Mr. Gray held the 
position of Senior Vice President and Chief Financial Officer for Royal Cup, 
Inc., a United States based commercial coffee roaster and wholesale distributor 
of tea and other beverage related products.  Prior to Royal Cup, Inc., from 
2006 to 2014, Mr. Gray worked in the petroleum distribution industry for The 
McPherson Companies, Inc. and held the position of Executive Vice President and 
Chief Financial Officer.  Additionally, from 1997 to 2006, Mr. Gray worked in 
various financial and operational roles with Saks Incorporated, a previously 
listed New York stock exchange retail group in the United States.  Mr. Gray has 
a B.S. degree in Accounting from the University of Alabama and he is a licensed 
CPA (Alabama). 

(MORE TO FOLLOW) Dow Jones Newswires

November 08, 2016 02:00 ET (07:00 GMT)

DJ Diversified Gas & Oil Corp. Intention to Float on -2-

David Edward Johnson (56), proposed Senior Independent Non-executive Director 
David Johnson has enjoyed a long and successful career in the investment 
sector. He has worked at a number of leading City investment houses, as both an 
investment analyst and more recently in equity sales and investment management. 
During his career he has worked for Sun Life Assurance, Henderson Crosthwaite 
and Investec Securities. He joined Panmure Gordon & Co in 2004 where he worked 
until 2013, including as Head of Sales from 2006 and then Head of Equities from 
2009. He joined Chelverton Asset Management in 2014 where he had specific 
responsibility for the Group's private equity investments. David is a 
non-executive director of AIM quoted, Bilby plc, a holding company providing a 
platform for strategic acquisitions in the gas heating and general building 
services industries. David Johnson's appointment as a non-executive director is 
conditional on the Company's admission to AIM. 
Martin Keith Thomas (52), Non-executive Director 
Martin Thomas is a partner in the corporate team at Watson Farley & Williams in 
London.   Martin specialises in advising on IPOs and secondary offerings of 
equity and debt on the London capital markets, corporate finance and M&A work, 
including cross-border and domestic acquisitions and disposals, joint ventures 
and private equity transactions.   Previously named one of The Lawyer's "UK Hot 
100 Lawyers" and ranked by both Chambers and Partners and Legal 500, Martin 
advises clients operating in a variety of sectors, including oil and gas, 
renewable energy, natural resources and mining, climate change, financial 
services and early stage technology.  During his legal career of 30 years, 
Martin has also held senior management positions including 7 years as the 
European Managing Partner of a global law firm headquartered in the United 
This announcement contains forward looking statements, which have been made 
after due and careful enquiry and are based on the Directors' current 
expectations and assumptions and involve known and unknown risks and 
uncertainties that could cause actual results, performance or events to differ 
materially from those expressed or implied in such statements.  Forward-looking 
statements are sometimes identified by the use of forward-looking terminology 
such as "targets", "believes", "expects", "aims", "intends", "plans", "will", 
"may", "anticipates", "would", "could" or similar expressions or the negative 
thereof.  The Board believes that the expectations reflected in these 
statements are reasonable, but they may be affected by a number of variables 
which could cause actual results or trends to differ materially. These 
forward-looking statements speak only as of the date of this announcement. Save 
as required by law, each of the Group and Smith & Williamson expressly disclaim 
any obligation or undertaking to disseminate any updates or revisions to any 
forward-looking statements contained herein to reflect any change in the 
Group's expectations with regard thereto, any new information or any change in 
events, conditions or circumstances on which any such statements are based, 
unless required to do so by law or any appropriate regulatory authority. Given 
these uncertainties, prospective investors are cautioned not to place any undue 
reliance on such forward looking statements. 
Prior to making an investment decision in respect of the Ordinary Shares, 
prospective investors should consider carefully all of the information within 
the Admission Document. The Board believes the risks set out therein to be the 
most significant for potential investors. However, the risks listed do not 
necessarily comprise all those associated with an investment in the Company. In 
particular, the Group's performance may be affected by changes in market or 
economic conditions and in legal, regulatory and/or tax requirements. 
Neither the contents of the Company's website nor the contents of any website 
accessible from hyperlinks on the Company's website (or any other website) is 
incorporated into, or forms part of, this announcement. 
This announcement does not constitute, or form part of, a prospectus relating 
to the Company, nor does it constitute or contain any invitation or offer to 
any person, or any public offer, to subscribe for, purchase or otherwise 
acquire any shares in the Company or advise persons to do so in any 
jurisdiction, nor shall it, or any part of it form the basis of or be relied on 
in connection with any contract or as an inducement to enter into any contract 
or commitment with the Company. 
The content of this announcement has not been approved by an authorised person 
within the meaning of the Financial Services and Markets Act 2000 (as amended) 
This announcement is not for publication or distribution, directly or 
indirectly, in or into the United States of America ("United States" or "US"). 
This announcement is not an offer of securities for sale into the United 
States. The securities referred to herein have not been and will not be 
registered under the U.S. Securities Act of 1933, as amended (the "Securities 
Act"), and may not be offered or sold in the United States, except pursuant to 
an applicable exemption from registration. No public offering of securities is 
being made in the United States. 
This announcement is not for release, publication or distribution, directly or 
indirectly, in or into a Restricted Jurisdiction. This announcement and the 
information contained herein are not for release, publication or distribution, 
directly or indirectly, to persons in a Restricted Jurisdiction unless 
permitted pursuant to an exemption under the relevant local law or regulation 
in any such jurisdiction. This announcement has been issued by and is the sole 
responsibility of the Company. 
Smith & Williamson Corporate Finance Limited ("Smith & Williamson") is acting 
as nominated adviser and joint broker to the Company and Mirabaud Securities 
LLP ("Mirabaud") is acting as joint broker and no one else in connection with 
the proposed placing and admission to AIM ("Admission") and neither Smith & 
Williamson nor Mirabaud will regard any other person (whether or not a 
recipient of this announcement) as its client in relation to Admission nor will 
it be responsible to anyone other than the Company for providing the 
protections afforded to its clients or for providing advice in relation to 
Admission. Apart from the responsibilities and liabilities, if any, which may 
be imposed on Smith & Williamson or Mirabaud by FSMA or the regulatory regime 
established thereunder, neither Smith & Williamson nor Mirabaud accepts any 
responsibility whatsoever, and makes no representation or warranty, express or 
implied, for the contents of this announcement including its accuracy, 
completeness or verification or for any other statement made or purported to be 
made by it, or on behalf of it, the Company or any other person, in connection 
with the Company and the contents of this announcement respect, whether as to 
the past or the future. Smith & Williamson and Mirabaud accordingly disclaim 
all and any liability whatsoever, whether arising in tort, contract or 
otherwise (save as referred to above), which it might otherwise have in respect 
of Admission or contents of this announcement or any such statement. 

(END) Dow Jones Newswires

November 08, 2016 02:00 ET (07:00 GMT)