Diversified Gas & Oil continues hunting for U.S. natgas deals: CEO
UK-listed Diversified has spent about $1.7 billion over the past three years to acquire fields that produce mostly gas, including its roughly $145 million purchase in May of assets in Pennsylvania and West Virginia from EQT Corp
New Delhi: Diversified Gas & Oil Plc is looking to buy additional U.S. natural gas producing properties over the next 12 to 18 months as a coronavirus-related energy market selloff creates opportunities, its chief executive said in an interview.
UK-listed Diversified has spent about $1.7 billion over the past three years to acquire fields that produce mostly gas, including its roughly $145 million purchase in May of assets in Pennsylvania and West Virginia from EQT Corp.
“We have seen a lot of distressed companies, a lot of bankruptcies and a lot of big shale guys that are monetizing assets to get their debt levels down,” Diversified CEO Rusty Hutson Jr said.
The company is profitable, pays a dividend and the borrowing base on its revolving credit facility remains $425 million, he said. Acquisitive companies often use their credit facilities to help fund acquisitions.
Unlike most U.S. producers, Diversified does not drill new wells but buys mature fields that will produce steady amounts of energy. It produces about 660 million cubic feet of gas per year in the Appalachian region, making it one of the 25 biggest U.S. gas producers.
Chevron Corp, Range Resources Corp and Chesapeake Energy Corp have been looking to sell assets in the company’s Appalachia-focused areas, according to analysts and company statements.
Hutson said the market’s slide since the novel coronavirus outbreak has not affected Diversified’s output because it employs a hedging strategy that provides protection from pricing volatility.