DIVERSIFIED GAS AND OIL BUILDING ON PRIOR YEAR SUCCESS, STRENGTHENING THE FOUNDATION FOR FUTURE GROWTH Doubled average daily production Y/Y to 84.8 MBoepd Legacy(a) production maintained 70 MBoepd since 2H18(b) Adj EBITDA(c) (i.e.…
OVERVIEW & FULL YEAR HIGHLIGHTS
WHAT WE DO: THE DGO BUSINESS MODEL ACQUIRE, OPTIMISE, PRODUCE Acquire Optimise + Produce Target low-cost, long-life, low-decline production Deploy rigorous field management programs Focus on high-quality assets with synergistic…
FUNDAMENTALLY COMMITTED TO VALUE CREATION FOCUS ON RETURNS UNDERPINS CORE BUSINESS STRATEGY SINCE INCEPTION CASH FLOW MODEL, ROLLUP STRATEGY COMMENCES 2001 Acquired first producing assets, located in West Virginia 50MM FLOAT ON LSE…
DGO EMERGING AS A NEW MODEL FOR THE E&P MARKET STABLE PRODUCTION AND HEDGED CASH FLOW = ATTRACTIVE INVESTMENT OPPORTUNITY DGO Strategy THEN Founded in 2001, DGOs Strategy Remains Unchanged DGO Strategy NOW Focused on Cash Flow and…
UNDERSTANDING THE DGO VALUE PROPOSITION OPTIMAL COMBINATION OF LOWCOST AND HIGHCONTROL STRATEGY DGO Traditional Mineral E&P Models Companies(a) Margins(b) 50%+ PDP decline 6% Asset Operational Control Development Risk…
CAPITAL ALLOCATION FOCUSED ON STAKEHOLDERS A HISTORY OF CONSISTENT RETURNS FOR INVESTORS High Margins and Consistent PDP Yields Sustain dividend feasibility and create potential for Free Cash Flow Allocation opportunistic share…
BUILT TO DELIVER STRONG MARGINS AT LOW PRICES EFFICIENT OPERATIONS, LOW FIXED COSTS PRIME DGO FOR SUCCESS IN CURRENT MARKET Net Realised Operating FullyLoaded Free Cash AllIn DGO Cash Costs Price per Mcfe Cash Margin Cash Margin…
OPERATIONS OVERVIEW
SMARTER WELL MANAGEMENT (SWM) (a) SWM ACTIVITIES OFFSET NATURAL DECLINES ON LEGACY ASSETS Illustrative Production Comparison of Legacy Assets(a), 2Q18 4Q19 Realised Production on Legacy Assets(b) Daily Production, MBoepd 70.6…
RESOURCE ALIGNMENT OPTIMISES OPERATIONAL FOCUS 2018 AND 2019 ACQUISITIONS DRIVE CHANGE IN STRUCTURE TO GENERATE EFFICIENCIES NE Northern Division Key Considerations Southern Division DGO Midstream Operations Generate efficiencies in…
INVESTMENT IN DGOS TECHNOLOGY PLATFORM SYSTEMS CREATES INTEGRATED PROCESSES & DATA WITH IMPROVED INTERNAL CONTROL FRAMEWORK CrossFunctional Teams Improved Systems Integrated ERP (Production, Revenue, Accounting, Land) Measurement…
2019 ACCRETIVE ACQUISITIONS COMPLEMENTARY ASSETS PRODUCE LOWER COSTS & HIGHER CASH MARGINS Upstream Assets Midstream Assets Purchased Purchased From: From: Benefits: Benefits: No additional G&A Additional 3rd party revenue…
UPSTREAM AND MIDSTREAM: A DYNAMIC COMBINATION VERTICAL INTEGRATION PROMOTES WELLHEAD TO SALES POINT CONTROL Midstream Objectives Case Study Reroute Improve pipeline integrity and compliance Effective Optimise firm transportation 1…
PDP RESERVES CONTINUED GROWTH THROUGH ACQUISITIONS YearEnd PDP Reserves, 2019 PDP Growth Since IPO NYMEX Reserve Pricing (/MMBtu)(b) 3.40 87% 3.20 Significant shift downward in forward price curve 20x 3.00 563 2.80 growth in…
SAFELY, SYSTEMATICALLY RETIRE WELLS UPDATE OF DGOS ASSET RETIREMENT PROGRAMME Bolstered Formal Plugging Continued Cost Control Annual Plugging Cost Commitments To States On a WellByWell Basis Minimal Cash Flow Impact Initiated 15yr…
ESG: SUSTAINABILITY REPORTING DGOS OPERATIONS MODEL REFLECTS ENVIRONMENTAL STEWARDSHIP & SUSTAINABILITY Inaugural Sustainability Report Highlights the environmental stewardship of our business practices Reflects the assimilation…
A COMPLETE, SUSTAINABLE OPERATIONAL MODEL ALL GOALS ARE STRATEGICALLY IMPORTANT TO PROPER STEWARDSHIP OF CAPITAL Our Daily Operational Goals Translate to a fundamental stewardship philosophy for: the environment, our employees and…
FINANCIAL OVERVIEW
A DISCIPLINED STRATEGY DELIVERING VALUE WITH A PROVEN, SUSTAINABLE BUSINESS MODEL Executing a strategy that includes Total Revenue(a) Midstream Revenue 511.7MM 22.2MM +87% +205% FY2018: 274.1 FY2018: 7.3 Creating Total Cash…
PRODUCTION AND REVENUE ACCRETIVE ACQUISITIONS, IMPROVED HEDGE BOOK BOLSTER REVENUE Fourth Quarter Calendar Year +38% 96.3 Prod. Growth +107% 84.8 MBoepd Prod. Growth 70.0 487.7 MM 49.5 122.8 MM 136.1 MM 15.76/Boe…
CONSISTENTLY GENERATING RETURNS SINCE IPO HEDGING STRATEGY UNDERPINS ABILITY TO RETURN CAPITAL TO SHAREHOLDERS Longer Portfolio Duration 43% Opportunistically utilise contracts to protect cash flows for periods up to 10 years…
HEDGED MARGIN & CASH EXPENSES LEVERAGING SCALE TO REDUCE UNIT COSTS & MAINTAIN CASH MARGINS Fourth Quarter Calendar Year Realised Price 19.95/Boe 15.91/Boe 18.33/Boe 16.54/Boe 3.33/Mcfe 2.65/Mcfe 3.06/Mcfe 2.76/Mcfe…
DISCIPLINED CAPITAL EXPENDITURES LIMITED CAPITAL EXPENDITURES CONTRIBUTE TO CONSISTENT CASH FLOW AssetRelated Expenditures (MM) Acquisitions (430) PDP FOCUS No mandatory drilling requirements Expenditures on O&G Properties and…
COMMITMENT TO THE BALANCE SHEET AND LIQUIDITY RESULTS IN IMPROVED CREDIT FACILITY AND ONGOING LOW LEVERAGE 1,577MM Total Capitalisation Enlarged 17 bank syndicate enhances ABS 200 Balanced Capital Structure DGOs total borrowing…
2020 OUTLOOK & INVESTMENT THESIS
OUTLOOK 2020 Focus on MarginEnhancing Growth and Efficiencies Opportunistically Hedge to Protect Cash Flows Strengthen Balance Sheet for Financial Flexibility 29
DGO: A COMPELLING INVESTMENT Cash Flows Margins Dividends Leverage Lowdecline production Active Smarter Well Corporate policy targets Disciplined growth and and dynamic hedging Management and focus 40% of Free Cash Flow to…
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…
APPENDIX
2019: A YEAR IN REVIEW Setting New 84.8 MBoepd 7.71 /Boe 13.92/shr 750 Corporate Daily Total operating Annual Wells returned Milestones production cash costs dividends(a) to production As the Result of Successful Operations…
CASH DELIVERY STRATEGY CREATES SHAREHOLDER VALUE 396 MILLION SHAREHOLDER DISTRIBUTIONS & DEBT PAYMENTS SINCE FEB2017 IPO Committed to Strong B/S and Low Leverage Predictable PDP Declines Stabilise Cash Flow 163MM Principal reductions…
FOCUSED ON VALUE CREATION FROM THE BEGINNING DEMONSTRATED COMMITMENT TO STRATEGY AND RETURN ON EQUITY UNDERPIN BECOMING THE LARGEST PRODUCER ON AIM Home to 98% of DGOC wells Net Other Headquarters (Birmingham, AL) 95,000…
SIGNIFICANT ACQUISITIONS SINCE FEB 2017 IPO ESTABLISH DGO AS A TOP PRODUCER IN APPALACHIA Acquisition Metrics(a) 2019 1.5B Total Acquisitions Acquired Assets: HG Energy, EdgeMarc, Midstream Grow platform for shareholder returns…
THE DGO DIFFERENCE: DELIVERING REAL VALUE SOME COMPANIES ARE BUILT TO DRILL, AND SOME TO OPERATE. DIVERSIFIED IS BUILT TO OPERATE VERY EFFICIENTLY DGO INVESTOR PERCEPTION REALITY Cash wise Cash deficient Cash used to paydown LIBOR+…
UNDERSTANDING OUR UNCONVENTIONAL ASSETS IMPLEMENTING THE DGO STRATEGY ACROSS WELL TYPES 16,000 Developer / Seller Produces DGO Purchases + Efficiently Produces 12,000 Hyperbolic Declines Exponential / Terminal Declines = Volatile…
CORPORATE DECLINE AND OPERATING COSTS STEADY, STABLE PRODUCTION DECLINE YIELDS CONSISTENT CASH FLOW Lowdecline production results in steady unitcost increase 7% vs 54% 3year Projected Cost Increase 11.43 12.97 14.17 9.19…
NATURAL GAS REMAINS A VIABLE LONGTERM INVESTMENT EXTENDING THE INVESTMENT CASE FOR CLEANER FUELS BEYOND TODAY Dry Natural Gas Industrial And Consumer Natural Gas Share of Production Continues At Electric Persistently Electric…
HEDGING PROGRAM OVERVIEW (a) DESIGNED TO PROTECT CASH FLOW, DIVIDENDS, DEBT REPAYMENT & LIQUIDITY DGO leverages its unique asset base underpinned by longlife, lowdecline production to tailor its mix of Portfolio Duration…
ASSET-BACKED SECURITISATION OVERVIEW ENHANCES DGOS CAPITAL STRUCTURE, SETS STAGE FOR GROWTH Leverage Liquidity transaction Optimised while Future Path and Neutral Enhancing creates Capital providing to Bond Structure Markets…
COMMITTED TO SHAREHOLDER RETURNS REGULAR AND INCREASING RETURNS TO SHAREHOLDERS 14% Div Yield(a) 250 Dividend Paid 233 0.16 0.14 0.14 0.14 0.14 Dividend Declared 0.13 15 0.14 Share Buybacks 200 34 68 0.11 Dividends per…
ILLUSTRATIVE RUN-OFF MODEL OF DGOS EXISTING ASSETS DGOS ASSET PORTFOLIO SUPPORTS 3.3B OF CASH DISTRIBUTIONS OVER 75 YEARS Undiscounted 6.3B of net Field CF Years 1-43 Years 44-75 Major Assumptions: 2.7B Full cash run-off, no…
VALUING THE ASSET RETIREMENT PROGRAMME OVERVIEW OF DGOS ASSET RETIREMENT OBLIGATIONS PV Analysis Bridging to the Balance Sheet ARO Rollforward Net Cash Flow (Field Level) Asset Retirement Obligation 5:1 (3) 6,300 1,340…
APPENDIX Supplemental Schedules
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Audited Audited Year ended Year ended 31Dec19 31Dec18 Revenue 462,256 289,769 Operating expense (202,385) (107,793)…
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ASSETS Audited Audited 31Dec19 31Dec18 ASSETS Noncurrent assets Oil and gas properties, net 1,490,905 1,092,951 Property and equipment, net 341,846…
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL POSITION EQUITY AND LIABILITIES Audited Audited 31Dec19 31Dec18 EQUITY AND LIABILITIES Shareholders equity Share capital 8,800 7,346 Share premium 760,543 540,655…
AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOW Audited Audited Year ended Year ended 31Dec19 31Dec18 Cash flows from operating activities Income after taxation 99,400 201,119 Cash flow from operations…
NON-IFRS & OTHER RECONCILIATIONS REVENUE RECONCILIATION Per Unit 2018 2019 2018 2019 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 Unit 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 Natural Gas (MMcf) 25,973 33,096 79,051 32,596 40,601 45,091…
NON-IFRS & OTHER RECONCILIATIONS EXPENSE RECONCILIATION Amounts in thousands, unless otherwise noted Footnotes: Amounts in thousands, unless otherwise noted; (a) Certain expense reclassifications were made to conform previously…
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