Diversified Gas & Oil (DGO) recently announced the acquisition of 107 gross unconventional producing wells in Pennsylvania and West Virginia with combined 2018 net production of approximately 21kboed and proven developed producing (PDP) reserves of 92mmboe. The $400m acquisition is to be funded through a combination of new equity and draw down of existing borrowing capacity. We estimate that leverage will remain below a target range of 2.0-2.5x at 1.7x FY19e net debt/adjusted EBITDA. We expect the transaction to be accretive to FCF/share for FY20 (+8%) with potential to support an increased dividend payout - management indicates there is potential for a post-acquisition annualised payment of 16.0c/share. On addition of the acquired assets, assumption of incremental group debt and new equity, our valuation rises to 166.3p/share (+2%).Den vollständigen Artikel lesen ...
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