DIVERSIFIED GAS & OIL Structurally transformed to drive greater profitability Four accretive acquisitions totaling nearly 1 Billion Strong cash flow drives Net Debt/Adj EBITDA to 1.8x(a) Southern midstream assets enhance margins…
CONTINUED COMMITMENT TO OUR STRATEGY A disciplined approach to creating long-term value Continued disciplined growth Each transaction increased operational cash flow per share in the aggregate from 0.06 to 0.23 year over year(a)…
FOUR ACCRETIVE ACQUISITIONS IN 2018 Geographically concentrated footprint adds scale in Appalachia Current DGO = 70 Mboed 8.8 Mboed 9.0 Mboed 49 MMboe PDP Reserves 69 MMboe PDP Reserves 1.5 Million Acres 0.9 Million Acres APC…
DELIVERING VALUE TO SHAREHOLDERS Transforming the composition of our revenue stream while optimising costs Structurally Enhanced Lower Unit 25 % Realised Prices(a) 20 %Cash Costs(b) 21.71 8.55 17.14 10.74 4Q18 vs 4Q17 FY 2018 vs…
Operations Overview
LESSONS FROM 2018 Strategic consolidation of assets drives value Diversified recognizes that not all assets are the same. Thats why we purchase assets based on their ability to generate outsized returns. In 2018, this meant…
OPTIMISE PRODUCTION OF NEGLECTED ASSETS Utilizing DGOs Smarter Well Management to increase production & reserves I Capitalconstrained Marcellus producers have to allocate cash & significant resources to drilling for production…
REDUCE COSTS WITH OPERATIONAL EFFICIENCIES Leveraging economies of scale to reduce costs II Overlapping assets shortens well tender routes, decreases equipment overhead, and creates II purchasing power which ultimately reduces…
AGGREGATING KNOWLEDGE & RESOURCES A future built upon successful basin-wide integration of knowledge & systems PEOPLE PROCESS SYSTEMS RETAIN SKILLED EXPERTISE CROSS-TRAIN SHARED CONSOLIDATE & OPTIMISE KNOWLEDGE & SKILLS…
LEVERAGING RESOURCES ACROSS APPALACHIA Setting the standard with experienced and skilled operations professionals Our consolidated footprint of Skilled Resources spans densely across Northern & Southern Appalachia, enabling us to…
CREATE VALUE BY CONTROLLING THE VALUE CHAIN Eliminating costly gathering while adding a new revenue stream III Since acquiring our midstream assets this year, unit cash margins have been significantly enhanced through reduced G&C…
PROTECT CASH FLOWS BY MARKET DIVERSIFICATION Diversifying gas markets for advantageous takeaway optionality and pricing Ample Takeaway Capacity Through Major Pipelines IV Each of our operating areas are supported by multiple…
ENHANCE MARGINS WITH LIQUIDS PRODUCTION Extracting more value from each molecule produced V Our High BTU gas routed and processed at the Langley plant has allowed for higher realized pricing & increased margins. V UNPROCESSED GAS…
P&A AGREEMENTS BY STATE Committed to safe, systematic asset retirement Well Agreement Detail Minimum P&A Obligations by State & AFE Totals COST (a) 2.6MM 2.6MM 2.6MM 2.6MM 2.6MM P&A West Virginia 30 initial wells 50…
F I N A N C I A L R E S U LT S O V E R V I E W
BY THE NUMBERS Full Year and 4Q Comparisons 2017 2018 Change 4Q17 4Q18 Change PDP Reserves (Mmboe) 55 474 7.5x -- -- -- PV-10 Reserves (B) .25B 1.6B 5.5x -- -- -- Results Summary Average net Mboepd 6.6 41.0 5x -- -- -- Exit rate…
A CASH FLOW CONSIDERATIONS DGO not only led CFPS growth, but is positioned to generate highest returns 400% Value Creation CF Outspend FCF Positive 300% Growth Operating Cash Flow per Share Growth Growth 200% 100% 2017…
A TOTAL SHAREHOLDER RETURNS IN 2018 In a year when the industry struggled, DGOs return DOUBLED that of its next closest peer 75% 46% 50% FY18 Total Shareholder Return 25% 21% 11% 7% 5% (6%) (6%) (12%) (13%)…
ACCRETIVE GROWTH ENHANCING DIVIDENDS Consistent execution of creating value for our shareholders Dividends per Share Growth Higher Dividend Payouts (b) FY2018 = 11.23c Shift to Quarterly Dividends(a) FY2017 = 5.44c 10.0%…
PRODUCTION Increasing liquids component enhances overall economics Production Profile Evolution 600% Y/Y 70,000 Daily Production boed with Strengthened Production Mix 12% 10,400 boed 2% 70.0 Mboed 6% 3% 14% Liquids 10.4…
REVENUES Transformation of the asset base driving realized price improvements REVENUE GROWTH(a) FOURTH QUARTER: DRIVING REALIZED PRICING HIGHER(a) 4Q Revenue 25.00 MIDSTREAM 1Q - 3Q UPSTREAM CONTRIBUTION Realized / Boe(b)…
A EXPENSES & MARGIN Leveraging scale to reduce unit costs and enhance cash margins MARGINS WIDENING ON CONSOLIDATED PORTFOLIO REDUCING EXPENSES 20 21.71 Expenses 20% 2018 Total Expenses 10.74 17.14 10 2.03 90%…
RESERVES PDP Reserves 17 vs. 18 climb 760% (55 to 474 mmboe) 100% PDP Reserves 1.8 PV10% 1.6B 500 9 1.6 Where did the production 1.4 400 column I added go 1.2 PDP Reserves (MMboe) PV10% (Billions) 300 1.0 425 474…
DEMONSTRATED COMMITMENT TO LOW LEVERAGE Strategically balanced to provide the optimum cash flow flexibility 31-Dec 31-Dec Committed to maintaining low leverage (Currencies In Millions) Target 2x or less Net Debt / Adj EBITDA 2017…
OUTLOOK: 2019 & BEYOND Our differentiated business model drives steady, predictable shareholder returns Vast Opportunity set coupled with Capital Allocation 1 A is driving our framework st Organic Cash Acquisitions in Flow…
OUTLOOK: 2019 Other company initiatives Emphasis on System Modernization & Data Board Expansion / Composition Evaluate Move to Main Market DGOC 2018 FY Results 30
APPENDIX ABOUT DGO
BUSINESS MODEL Acquire, Produce, Drill Acquire and manage producing natural gas and oil properties to generate cash flows, providing stability and growth for our stakeholders Inorganic Ongoing Organic Result Maximise Execute…
THE JOURNEY Top 15 Established, profitable, proven, & growing Appalachian Producer 70,000 Net Boe/d 185% Net Production CAGR 18 from YE 2016 to YE 2018 Net 10,400 Boe/d January: Raised 180MM net equity proceeds to fully…
DGOS SMARTER WELL MANAGEMENT PROGRAMME Improving production on active wells, Returning inactive wells to production 1 Pumpjack Installation 4 Plunger Lift Setup For wells with higher oil production potential, The team installed a…
ORGANIC GROWTH OPPORTUNITY Vast land bank provides ample opportunity in higher price environments Substantial 7.8 million acres of land sparsely drilled and largely undeveloped Current development at 100 acre spacing Deemed full…
HEDGE PORTFOLIO SUMMARY AS OF FEBRUARY 28, 2019 Natural Gas Hedges(a) NGL Hedges Oil Hedges Physical Sales Swaps Swaps 17% 29% 18% Deferred Premium Puts 19% Costless Costless Collars Swaps Collars 35% 100% 82% 2.71…
A UNIQUE INVESTMENT OPPORTUNITY Diversified Gas & Oil Track record of Capitalising on consistent growth unique regional and returns, acquisition window reducing costs to build platform for through increasing long-term growth…
APPENDIX ASSET RETIREMENT
PLANNING SAFE & EFFICIENT OPERATIONS Proactively managing wells and planning out asset retirement STEP Does it present any NO STEP Is the well 1 threat to the 2 economic or not environment YES YES NO Will it be economic…
OUR APPROACH TO WELL OPERATIONS Value captured: Acquisition & Integration to Asset Retirement Operating Initiatives OPTIMIZING WELL LIFE Increase production, extend well-life & reactivate inactive wells Planning Initiatives…
DGOS SAFE & SYSTEMATIC ASSET RETIREMENT A proactive initiative for long-term environmental and economical sustainability DGOs Safe & Systematic Asset The DGO Way The Wrong Way Retirement programme reflects DGOs solid commitment to:…
SAFE & SYSTEMATIC ASSET RETIREMENT Cost saving initiatives developed for current & future plugging activities Since gaining operatorship of this asset in mid-July, DGO EXAMPLE: RECENT P&A COST REDUCTION has implemented several…
P&A PORTFOLIO CONSIDERATIONS Cost saving initiatives developed for current & future plugging activities Well Map Commentary Legend Horizontal Wells Over 80% of DGOs current well portfolio will cost less than Kentucky 25,000 to…
ESTIMATED ASSET RETIREMENT A forward look at future plugging needs Commentary Cumulative PV10% Graph 60 70,000 DGO has or is negotiating firm multi-year plugging agreements with the states in which it operates. 60,000 50 Years 1…
A P P E N D I X F I N A N C I A L D E TA I L S
DIVERSIFIED GAS & OIL AUDITED FINANCIALS Consolidated Statements of Profit or Loss and Other Comprehensive Income (Amounts in thousands, except per-share amounts) (Restated) Audited Audited Year ended Year ended Note 31 December…
DIVERSIFIED GAS & OIL AUDITED FINANCIALS Consolidated Statements of Financial Position - Assets (Amounts in thousands) (Restated) Audited Audited Note 31 December 2018 31 December 2017 ASSETS Non-current assets Oil and gas…
DIVERSIFIED GAS & OIL AUDITED FINANCIALS Consolidated Statements of Financial Position Equity and Liabilities (Amounts in thousands) (Restated) Audited Audited Note 31 December 2018 31 December 2017 EQUITY AND LIABILITIES…
DIVERSIFIED GAS & OIL AUDITED FINANCIALS Consolidated Statements of Cash Flow (Amounts in thousands) (Restated) Year ended Note 31 December 2018 31 December 2017 Cash flows from operating activities Income after taxation 201,119…
NON IFRS & OTHER RECONCILIATIONS Revenue reconciliation (Amounts in thousands) DGOC 2018 FY Results 50
NON IFRS & OTHER RECONCILIATIONS Expense reconciliation (Amounts in thousands) DGOC 2018 FY Results 51
NON IFRS & OTHER RECONCILIATIONS Adjusted EBITDA reconciliation (Amounts in thousands) DGOC 2018 FY Results 52
DIVERSIFIED BROKERS Corporate Mirabaud Stifel PO BOX 381087 MIRABAUD SECURITIES LIMITED STIFEL NICOLAUS EUROPE LTD BIRMINGHAM, ALABAMA 10 BRESSENDEN PLACE 1650 CHEAPSIDE 35238-1087 (USA) LONDON SW1E 5DH LONDON EC2V 6ET…
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