LONDON (ShareCast) - (ShareCast News) - US-based gas and oil producer Diversified Gas & Oil confirmed the admission of its issued share capital to trading on AIM on Friday.
The company said it followed the completion of a placing of 61 million new ordinary shares at 65p per share to raise $50m - approximately £39.7m - giving the company a market capitalisation of approximately $86.4m on admission at the placing price.

It said the funds raised will be used for the repurchase of bonds, repayment of existing debt facilities, costs of admission and working capital requirements of the group.

Diversified holds onshore licences in the Appalachian Basin, northeastern US, with total proved reserves of oil of approximately 2,271 mbbl and gas reserves of approximately 153,695 mcf.

Its current daily gas production is running at approximately 26,000 mcfd and oil production is approximately 475 bopd.

Since incorporation in 2001, the group claims to have never drilled a non-producing well.

"We are delighted to be joining AIM and thank our existing and new shareholders for their support in the placing," said CEO Rusty Hutson Jr.

"DGO has grown exponentially since inception in 2001 and we believe that our admission to AIM will provide the company with a platform from which we can accelerate this growth trajectory."

Hutson said the company offers a "compelling proposition" given its extensive acreage position in the Appalachian Basin, its low cost production, its proven track record for value creation and its commitment to pay a dividend to shareholders.

"We have a well-defined growth strategy based on proven and low-risk operations and the opportunity for complementary acquisitions that we are uniquely positioned to execute on.

"We look forward to communicating on our progress as we begin our life as an AIM quoted company."

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