“DGO continues to buck the trend of its US peers, growing production through opportunistic acquisitions whilst maintaining a healthy dividend,” SP Angel said.
() may make more deals amidst market turmoil churned up by the coronavirus pandemic, that’s according to stockbroker SP Angel.
The London-listed firm, which this month moved up to the Main Market, today completed the first of two acquisitions struck during lockdown.
It completed a US$112mln acquisition of a package of assets from . It comprises some 900 net operated wells the transaction increases group production by 9,000 barrels oil equivalent (boe) and adds around 48mln boe of proved developed producing (PDP) reserves.
A separate deal agreed in early April sees the company pay US$110mln to add 9,900 boepd, mostly (97%) gas, from a package of “mature low decline conventional” wells.
These are just the latest transactions for the acquisitive firm which has built itself rapidly since floating on AIM back in 2017.
Stockbroker SP Angel reckons more deals may come in the future.
“[Its] another value accretive transaction for DGO in our view and represents further collaboration with EQT that dates to 2018 when the company completed a US$575m purchase of similar Appalachian assets,” SP Angel analyst Sam Wahab said in a note.
“DGO continues to buck the trend of its US peers, growing production through opportunistic acquisitions whilst maintaining a healthy dividend. We would not be surprised to see the Company announce further purchases given its US peers need solutions to their debt problems and assets are available at compelling prices.”
The analyst also highlighted a “more positive” natural gas dynamic in the US heading towards 2021.
DGOC chief executive Rusty Hutson this morning said: “This transaction further solidifies the strong relationship we share with EQT that dates back to 2018 when we completed a US$575 million purchase of similar Appalachian assets.
“Today’s acquisition builds on the significant momentum we’ve generated this year and continues to validate the large opportunity set of accretive gas and oil producing assets available in this market.”