Diversified Gas & Oil has closed an acquisition of Alliance Petroleum from Lake Fork Resources Acquisition (LFRA).
Signed in January 2018, the acquisition agreement saw Alliance Petroleum acquired for an aggregate amount of $95m. The deal included repayment of Alliance Petroleum’s debts of around $25m.
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To fund the transaction, Diversified Gas & Oil completed a $189m share placing on 20 February.
Diversified Gas & Oil CEO Rusty Hutson said: “The acquisition of Alliance Petroleum adds high-quality assets that complement our existing portfolio, as well as an experienced operating team who will work diligently with our existing team to ensure a seamless transition of ownership.
“Collectively, we now turn our attention to the integration and optimisation of these assets, leveraging our expanded footprint to drive operational efficiencies and lower operating costs.”
The acquired assets comprise gas wells located near the company’s existing operations in the Appalachian Basin principally in Pennsylvania and West Virginia, as well as locations in Ohio.
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By GlobalDataBased on independent estimates, Alliance Petroleum is said to have proven reserves of around 49.3 millions of barrels of oil equivalent (MMboe) with an estimated net present value (NPV) of $168m.
The assets currently have net production of around 53 thousand cubic feet of gas per day (Mcfed).
The acquisition will allow Diversified Gas & Oil to increase its net daily production from around 62Mcfed to 115Mcfed.
