APPALACHIA ACQUISITIONS CARBON ENERGY AND EQT ASSETS MAY 2020
EXECUTIVE SUMMARY
PROSPECTIVE, CONDITIONAL ACQUISITION SUMMARY BOLT-ON TARGET ASSETS ADD SCALE TO EXISTING, HIGHLY-EFFICIENT CONSOLIDATED FOOTPRINT Transaction Overview Upstream Assets Carbon EQT 7,000 net wells with adj. 2019 production of 18 Mboepd…
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…
DGOS STRATEGY DELIVERS STATED OBJECTIVES TARGET ASSETS ALIGN WITH CONSOLIDATED CORPORATE STRATEGY Historically-Stated Objective Expected Acquisitions Alignment 18 Mboepd (+20% vs 2019 Exit) acquired production Target low-cost,…
VALUE ACCRETION THROUGH PRUDENT GROWTH TARGET ACQUISITIONS FURTHER IMPROVE DGOS INVESTMENT CASE Adjusted EBITDA(a) Estimated Impact Translates to Share-Level Value Share Per 43/shr 48/shr Gross Adj. EBITDA Share Accretion A 22…
TRANSACTION FINANCING SUMMARY EXPECTED IMPACTS TO CAPITALISATION, LEVERAGE AND LIQUIDITY SELECTED HIGHLIGHTS ILLUSTRATIVE CAPITALISATION TABLE DGO intends to fund the aggregate purchase price and transaction fees with: Anticipated…
TRANSACTION DETAILS
ASSET OVERVIEW - UPSTREAM TARGET ASSETS CONSOLIDATE INTO EXISTING FOOTPRINT FOR IMMEDIATE IMPACT ASSETS COMPLEMENT EXISTING FOOTPRINT KEY BENEFITS Conventional and Hz Marcellus well packages Legend complement current asset portfolio…
ASSET OVERVIEW MIDSTREAM EXPANDING MIDSTREAM NETWORK INCREASES OPTIONALITY, CONTROL AND MARGINS 4,900 miles of midstream with 200 common interconnects/intersects to existing DGO midstream assets create significant margin-enhancing…
SCALABLE MODEL RESULTS IN UNIT-COST REDUCTIONS ILLUSTRATIVE CONSOLIDATION REVEALS MARGIN-ENHANCING NATURE OF ACQUISITION 9.00 Total Operating Expense Immediately achievable operating synergies 8.00 7.71 7.42 drive operating and…
SUPPLEMENTAL INFORMATION
ASSET OVERVIEW - UPSTREAM CARBON ENERGY Asset Map Wells and Production(b) Legend Net Well Count 2019 Net Production DGO Acreage Carbon Wells 98% 97% Pennsylvania Ohio 6,100 9,100 Conventional Boepd West Wells Kentucky…
ASSET OVERVIEW - UPSTREAM EQT Asset Map Wells and Production(b) Legend Net Well Count 2019 Net Production DGO Acreage EQT Wells 100% Pennsylvania 90% Ohio 900 9,000 Operated Boepd West Wells Kentucky Virginia 10% Wells by…
NATURAL GAS MACROENVIRONMENTAL FACTORS SUPPLY / DEMAND OUTLOOK POSITIVE DESPITE MARKET HEADWINDS LOWER SUPPLY POSITIVE OUTLOOK FOR US GAS TODAY - CURTAILMENTS IMPACTING SUPPLY TIGHTER SUPPLY / DEMAND = HIGHER PRICES Decreased…
HOW WE MANAGE OUR BUSINESS A COMPLETE, SUSTAINABLE BUSINESS MODEL Our Daily Operational Goals Translate to a fundamental stewardship philosophy for: the environment, our employees and our shareholders Environmental Every unit…
COMPANY OVERVIEW
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…
DIVERSIFIED GAS AND OIL CORPORATE HIGHLIGHTS FOR THE YEAR ENDED 31 DECEMBER 2019 Doubled average daily production Y/Y to 84.8 MBoepd Legacy(a) production maintained 70 MBoepd since 2H18(b) Adj EBITDA(c) (i.e. cash operating) margin…
SMARTER WELL MANAGEMENT (SWM) (a) SWM ACTIVITIES OFFSET NATURAL DECLINES ON LEGACY ASSETS Illustrative Production Comparison of Legacy Assets(a), 2Q18 1Q20 Realised Production on Legacy Assets(b) Daily Production, MBoepd 70.6…
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…
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…
HEDGING PROGRAM OVERVIEW (a) DESIGNED TO PROTECT CASH FLOW, DIVIDENDS, DEBT REPAYMENT & LIQUIDITY DGO leverages its unique asset base underpinned by long-life, low-decline production to tailor its mix of Portfolio Duration…
BUILT TO DELIVER STRONG MARGINS AT LOW PRICES EFFICIENT OPERATIONS, LOW FIXED COSTS PRIME DGO FOR SUCCESS IN CURRENT MARKET Illustrative Net Realised Operating Fully-Loaded Free Cash All-In DGO Cash Costs Price per Mcfe Cash Margin…
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…
DIVERSIFIED BROKERS Corporate Mirabaud Stifel PO BOX 381087 MIRABAUD SECURITIES LIMITED STIFEL NICOLAUS EUROPE LTD BIRMINGHAM, ALABAMA 10 BRESSENDEN PLACE 150 CHEAPSIDE 35238-1087 (USA) LONDON SW1E 5DH LONDON EC2V 6ET WWW.DGOC.COM…
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