Diversified Gas & Oil Announces $500M Credit Facility with Key Bank N.A.
21 February 2018 - 6:55AM
Business Wire
Five-year revolving credit in conjunction with
closing of acquisitions of Alliance Petroleum and CNX Resources
Diversified Gas & Oil PLC (AIM: DGOC) (“Diversified” and the
“Company”), a U.S.-based acquirer and operator of oil and gas
producing assets, today announced the commitment of a new $500
million, five-year senior secured revolving credit facility (the
“Facility”) led by Key Bank N.A. (“KeyBank”). The Facility will be
subject to an initial borrowing limit of $140 million in
conjunction with the closing of Alliance Petroleum Corporation’s
acquisition, increasing to $200 million following closing of the
acquisition of certain Appalachian-based assets of CNX Resources.
Details of both acquisitions were announced on February 12,
2018.
The new Facility from KeyBank follows the successful completion
of Diversified’s $189 million share placing, following the
Shareholders’ General Meeting held February 19, 2018 in London, and
is the fulfilment of the Company’s commitment to reduce its cost of
debt and to maintain a progressive dividend policy.
Upon closing of the Facility as further discussed below,
Diversified will make an initial draw on the Facility to refinance
the outstanding balance on its existing term loan facility (the
“Existing Facility”). This refinancing will significantly reduce
the Company’s interest expense as the Facility will have an initial
interest rate of LIBOR plus 2.50 percent versus the Existing
Facility’s interest rate of LIBOR plus 8.25 percent. The interest
rate on the Facility will be subject to a grid that fluctuates
based upon utilization from a pricing of LIBOR plus 2.25 percent to
3.25 percent. In addition to the refinancing of the Existing
Facility, Diversified intends to utilize the Facility for general
corporate purposes, including the option to finance all or a
portion of any future acquisition opportunities.
Under the terms of the Facility, KeyBank is entitled to
syndicate to other financial institutions, though the previously
discussed borrowing bases are not contingent upon such a
syndication. The Company anticipates that the Facility will be in
final agreed form, approved and signed by March 15, 2018.
About Diversified Gas & Oil
Diversified Gas & Oil (AIM: DGOC) acquires and operates oil-
and gas-producing assets in the Appalachian Basin of the United
States. Diversified employs a disciplined investment strategy to
acquire conventional and unconventional low-risk wells, enhance
operations efficiently and maximize profitability for its
shareholders. Founded in 2001, Diversified operates approximately
18,000 producing wells with the highest standards of safety,
governance and transparency. For more information, visit us online
at www.diversifiedgasandoil.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180220006442/en/
For Diversified Gas & Oil PLCNicole Wyatt,
205-588-2327nicole@markstein.co
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