Company Announcements

New Banking Facility

Source: RNS
RNS Number : 3273F
Diversified Gas & Oil PLC
20 February 2018

20 February 2018


Diversified Gas & Oil PLC

("DGO" or the "Company")


New Banking Facility


Diversified Gas & Oil PLC (AIM: DGOC), a leading independent US based gas and oil producer focused on the Appalachian Basin, is pleased to announce the commitment of a new US$500 million, five-year senior secured revolving credit facility (the "Facility") led by Key Bank N.A. ("KeyBank"). The Facility will be subject to an initial borrowing limit of US$140 million in conjunction with the closing of Alliance Petroleum Corporation's acquisition, increasing to US$200 million following closing of the acquisition of certain Appalachian-based assets of CNX Gas Company Limited.  Details of both acquisitions were announced on 31 January 2018. 


The new Facility from KeyBank follows the successful completion of DGO's US$189 million share placing, following the Shareholders' General Meeting held yesterday, and is the fulfilment of the Company's commitment to reduce its cost of debt and to maintain a progressive dividend policy.


Upon closing of the Facility as further discussed below, DGO will make an initial draw on the Facility to refinance the outstanding balance on its existing term loan facility (the "Existing Facility"). This refinancing will significantly reduce the Company's interest expense as the Facility will have an initial interest rate of LIBOR plus 2.50 percent versus the Existing Facility's interest rate of LIBOR plus 8.25 percent. The interest rate on the Facility will be subject to a grid that fluctuates based upon utilisation from a pricing of LIBOR plus 2.25 percent to 3.25 percent. In addition to the refinancing of the Existing Facility, DGO intends to utilise the Facility for general corporate purposes including the option to finance all or a portion of any future acquisition opportunities.


Under the terms of the Facility, KeyBank is entitled to syndicate to other financial institutions, though the previously discussed borrowing bases are not contingent upon such a syndication. The Company anticipates that the Facility will be in final agreed form, approved and signed by 15 March 2018.


This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.


For further information contact:


Diversified Gas & Oil PLC

Rusty Hutson Jr., Chief Executive Officer

Brad Gray, Chief Operating Officer and Finance Director

Eric Williams, Chief Financial Officer


+ 1 (205) 408 0909




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