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Diversified Gas and Oil PLC is acquiring 110 wells along with related surface rights and gathering equipment from HG Energy II Appalachia LLC. More than half of the wells are located in Pennsylvania’s Appalachian Basin.

The assets, which are being acquired from HG for a total cash consideration of approximately $400 million, include 107 unconventional, producing gas wells with a combined net daily production of over 20,000 barrels of oil equivalent (boe). Fifty-six of those wells, for a net total of 61,487 boe, are located in Pennsylvania, with the remainder located in West Virginia.

Diversified has completed seven acquisitions in the Appalachian Basin since going public on the London Stock Exchange’s AIM market. It has spent about $1 billion, cutting deals for conventional assets with low operating costs that it claims generate steady returns.

The acquisition and related costs will be funded by a combination of a drawdown from the Diversified 's Existing KeyBank credit facility and $225 million in proceeds from a planned stock offering. Mirabaud Securities Limited and Stifel Nicolaus Europe Limited are acting as joint bookrunners for the placing. Cenkos Securities plc is acting as a nominated adviser to the company in connection with the placing.

In a statement, Diversified CEO Rusty Hutson said, "This is yet another transformative transaction consistent with our ambitious and proven growth strategy. These are high-quality assets that are synergistically compatible with our existing portfolio in terms of profile and geography. This package comprises significantly higher volumes per well than our previous acquisitions and achieves higher realized gas prices, resulting in a positive impact for the overall economics of the enlarged portfolio as we continue to reduce operating costs and drive higher margins.”