City law firm, Wedlake Bell, has advised Diversified Gas & Oil PLC (“DGO”) – the United States based owner and operator of natural gas, natural gas liquids and oil wells, as well as midstream assets – on its acquisition of 107 producing gas wells in the Appalachian basin and related surface rights from HG Energy II Appalachia, LLC. The total cash consideration of the deal was approximately $400 million.
The acquisition was funded by a combination of (i) a drawdown under DGO’s existing bank facility and (ii) the net proceeds of a placing of new shares on AIM raising gross proceeds of $234 million ($225 million net of expenses) for DGO. The share placing represents the London Stock Exchange’s largest E&P fundraise of 2019 and following this acquisition, DGO’s pro forma net daily production will rise to over 90,000 boe (barrels of oil equivalent). The acquisition brings the value of DGO’s deal-making to almost $1.5bn since its AIM IPO in February 2017.
The Wedlake Bell Team who advised on the acquisition by DGO was led by Corporate Partner, Martin Thomas, Head of the firm’s Capital Markets practice. Martin has advised DGO on all of its capital markets transactions over the past 5 years. The Team also consisted of Corporate Partner Ed Craft, Senior Corporate Associate Kam Lally and Corporate Solicitor Alex Green.
US legal advice was provided to DGO by Maynard Cooper & Gale, P.C. (Jim McLaughlin and Beth O’Neill) and to HG Energy by Kirkland & Ellis LLP (David Castro and Christopher Heasley). DGO’s nominated adviser (Cenkos Securities plc) and the joint book-runners for the placing (Mirabaud Securities Limited and Stifel Nicolaus Europe Limited) were advised by Fieldfisher LLP (Anthony Brockbank).
Martin Thomas, Corporate Partner at Wedlake Bell, comments: “It is a pleasure to work with a long-standing client to enhance its offering and position it in the top-tier of London listed natural gas operators. I look forward to working with DGO again as it continues to grow in the future.”