Diversified Gas & Oil

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June 15, 2017

Update on proposed acquisition

15 June 2017

Diversified Gas & Oil PLC
(“DGO” or the “Company”)

Update on proposed acquisition of certain gas and oil assets of Titan Energy, LLC
Share placing to raise $35.0m (the “Placing”)
Restoration of trading on AIM

Diversified Gas & Oil PLC (AIM: DGOC), a US based gas and oil producer, is pleased to confirm that it has finalised the agreement to acquire certain gas and oil assets of Titan Energy, LLC (“Titan Assets”) which was announced on 5 May 2017 (the “Acquisition”). Details of the Acquisition will be set out in a new Admission Document and Circular to Shareholders which is expected to be published by not later than 7.00am on 16 June 2017 (the “Admission Document”).

As announced previously, the Titan Assets comprise certain producing gas and oil wells, close to DGO’s existing operations in the Appalachian Basin in the eastern United States, principally in the states of Ohio, Pennsylvania, southern New York and northeast Tennessee.

Daily gas production from the Titan Assets is approximately 12,500 gross boepd (6,550 net boepd) and oil production is 380 gross bopd (266 net bopd). The Acquisition will more than triple DGO’s gross gas production to approximately 17,367 boepd, and will increase gross oil production by 69% to approximately 930 bopd. Overall gross production will increase from approximately 5,400 boe to 18,300 boe. The Titan Assets will be immediately accretive to cash and earnings.

The cash consideration for the Acquisition is $84.2 million (approximately £66.1 million) (subject to adjustment in accordance with the terms of the agreement for the Acquisition). This will be funded by a new $110 million Senior Secured Loan Facility (the “Loan Facility”) and the Placing. Mirabaud Securities LLP has placed 39.3 million new ordinary shares (the “Placing Shares”) at 70p per share with certain existing and new institutional investors to raise $35.0 million (£27.5 million). The Placing will take place in two tranches. 11.4 million firm Placing Shares have been placed to raise $10.1 million. The remaining 27.9 million conditional Placing Shares are placed conditional on approval by Shareholders.

Notice of a Shareholder meeting to seek approval for the Acquisition and authority for the conditional Placing Shares will be sent to Shareholders later today. The Shareholder meeting will be held at 11.00am on 30 June 2017.

Full details of the Loan Facility and the Placing will be set out in the Admission Document.

Following publication of the Admission Document the Company anticipates that the suspension of trading in the Company’s shares will be lifted and that trading in the Company’s existing ordinary shares will recommence at 8.00am on 16 June 2017.

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