On 27 March 2019, Diversified Gas & Oil had signed a conditional sale and purchase agreement with HG Energy II Appalachia to acquire the assets for a total cash consideration of approximately $400m.

The company said that the acquisition of the mature, unconventional assets addresses its strategy of acquiring stable, long-life, low-decline producing assets in a focused region. The assets also add to its existing conventional and unconventional asset base across the Appalachian Basin.

In the present transaction, Diversified is acquiring 107 gross producing wells and related surface rights, which will increase the company’s net daily production by approximately 30% to more than 90,000 barrels of oil equivalent per day.

Diversified CEO Rusty Huston Jr said: “This is yet another transformative transaction consistent with our ambitious and proven growth strategy. The HG Energy Acquisition firmly establishes Diversified as a top-tier London-listed producer, supported by a healthy balance sheet, a strong cash flow profile and a healthy dividend yield.

“We now turn our attention to the seamless integration of these assets into our smarter well management program.”

The acquisition is expected to increase Diversified’s operating scale, when the newly acquired wells are coupled with presently owned unconventional and conventional wells spanning Appalachia.

The transaction will also allow the company further optimize operations and strengthen its status as the consolidator of choice for mature producing and midstream assets in Appalachia.

In October 2018, Diversified acquired Core Appalachia from TCFII Core in a cash-cum-stock deal worth around $183m.

Core Appalachia is a producer and processor of natural gas in the Devonian region with operations spread over 1.3 million net acres in Kentucky, Virginia and West Virginia.

The transaction followed Diversified’s acquisition of EQT’s southern Appalachian producing gas and oil and midstream assets for $575m in July 2018.The EQT Asset Acquisition increased the company’s daily production by nearly 115% to over 60,000 barrels of oil equivalent per day.