2017 Inter im Results 11 September 2017 Rusty Hutson Chief Executive Officer Eric Williams Chief Financial Officer
Disclaimer The information contained in this document has been prepared by Diversified Gas & Oil PLC (the “Company”) . This document is being made available for information purposes only and does not constitute an offer or invitation for the sale or purchase of securities or any of the assets described in it nor shall they, nor any part of them, form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever or otherwise engage in any investment activity (including within the meaning specified in section 21 of the Financial Services and Markets Act 2000). The information in this document does not purport to be comprehensive. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the Company or any of its officers, employees, agents or advisers as to, or in relation to, the accuracy or completeness of this document, and any such liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any future projections, management estimates or prospects contained in this document. Such forward-looking statements, estimates and forecasts reflect various assumptions made by the management of the Company and their current beliefs, which may or may not prove to be correct. A number of factors could cause actual results to differ materially from the potential results discussed in such forward-looking statements, estimates and forecasts including: changes in general economic and market conditions, changes in the regulatory environment, business and operational risks and other risk factors. Past performance is not a guide to future performance. The document is not a prospectus nor has it been approved by the London Stock Exchange plc or by any authority which could be a competent authority for the purposes of the Prospectus Directive (Directive 2003/71/EC). This document has not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. The information contained in this document is subject to change, completion or amendment without notice. However, the Company gives no undertaking to provide the recipient with access to any additional information, or to update this document or any additional information, or to correct any inaccuracies in it or any omissions from it which may become apparent. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This document does not constitute an offer to sell or an invitation to purchase securities in any jurisdiction. 2017 Interim Results 2
A Unique Opportunity Established, Profitable, Proven & Growing • ~11,040 net barrels of oil equivalent production per day • ~59.4 barrels of oil equivalent proved-developed-producing reserves Differentiated • US onshore operations • Stable producer • Low political and operational risk • Low cost • Cash-flow positive Progressive Dividend • Target dividend payout of 40% of free cash flow • Maiden dividend of 1.99 cents per share paid 31 July • Second dividend of 1.99 cents per share declared September 2017 (Pay Date of 20 December) Value Creating • Consistent execution • Strong balance sheet and liquidity position • History of success completing acquisitions • Deep relationships in the industry 2017 Interim Results 3
Appalachian Basin CONVENTIONAL ONSHORE OIL AND GAS PRODUCTION IN THE APPALACHIAN REGION OF THE USA Oldest hydrocarbon Over 1 million wells drilled Abundant Geologically comprised of prolific unconventional shale producing region in US high industry success rate infrastructure in Marcellus/Utica and conventional sandstone reservoirs Diversified, US based, income and growth investment Appalachian Basin 2017 Interim Results 4
Company History SIGNIFICANTLY INCREASED PRODUCTION GROWTH DRIVEN BY Mcfe/ 109,800 day EXECUTION OF SUCCESSFUL ROLL-UP STRATEGY ‘17 Feb: Floated on AIM raising $50m – largest UK O&G Mcfe/ 26,000 day IPO since April 2014 Apr: Mcfe/ 11,000 ‘16 day Acquired 1,300 producing Mcfe/ 7,000 day Mcfe/ wells in Ohio and 6,000 day Pennsylvania for $1.75m Founded ‘15 ‘14 ‘10 June: ‘01 Successfully listed Acquired ~7,240 wells from bond on ISDX Titan for $72.8m; Raised Growth Market, which additional $35m through Entered Ohio raised £10.6m Acquired assets of secondary offering on AIM Acquired 700 wells Acquired approx. 1,300 Diversified from AB Resources Acquired 732 wells from wells from Eclipse Resources Inc. for September: for $14.5m Broadstreet Energy for Resources for $4.8m $5.2m Expect to close on the $2.6m Acquired 320 wells Acquired 321 wells Acquired 2,200 wells and remaining ~140 Titan wells Initially, a West from Deep from Operated Equity Acquired 1,709 wells and pipeline assets from (incl. 29 Hz wells) held Virginia oil & natural Resources, for Investment (Fund 1) equipment from Texas Seneca Resources for within public partnership gas company $5.5m for $4.3m Keystone for $725k $7.0m structures for $11.4m 2017 Interim Results 5
Strategy ACQUIRE, PRODUCE, DRILL Large energy players looking to reduce operating expenses and re-focus on shale only Target: predictable production rates, long-life (50+ years), Target PDP low declines and compelling valuation metrics acquisitions Acquire and manage oil Geographically agnostic and natural gas properties to generate Repairing, recompleting and reconnecting lines cash flows, provide stability and growth for Optimize compression Maximise our stakeholders Deploying rigorous field management programmes production; Minimize Cost Focus on conventional formations Execute low Strict control of drilling and completion costs risk, Increased drilling in higher price environment low cost drilling Dividend paying E&P 2017 Interim Results 6
Achieving Scale Through Acquisition Unique Strong Limited Efficient Market Reputation Competition Assets Dynamics • DGO was founded in • Few operators focused • Long-life, gas-heavy 2001 and has deep on acquiring mature production can be • Larger independents roots in the industry production streams maintained at very seeking to divest of have either the low operating costs mature production at financial & operational • DGO has a long track compelling valuations strength or access to • Tight geography of record of success to refocus on capital to acquire evidenced by ~90% operations creates unconventional larger packages CAGR of its daily workforce leverage development production and and efficiency • Presently, acquisitions producing asset base • Mature production over the past 4.5 years provide better rates of maintains rights to return than drilling new unconventional wells reservoirs creating the need for a highly reputable operator to purchase assets 2017 Interim Results 7
Proven Success Growing the Asset Base & Production – ~90% CAGR since 2013 ~17,000 Operated, Producing Wells 2013 109,800 Baseline legacy Mcfe/d Fund 1 18,000 120,000 Broadstreet +142% Texas Keyston Eclipse 16,000 Seneca EnerVest 100,000 Titan 30June Titan 30Sept 14,000 Production (Mcfe/d) 12,000 80,000 Production (Mcfe/d) Producing Wells 10,000 2017 60,000 8,000 +90% 6,000 40,000 +180% 4,000 20,000 6,000 2,000 +33% Mcfe/d - - 2013 2014 2015 2016 2017 2017 Interim Results 8
Compelling, EBITDA-Accretive Valuations $/flowing mcfepd Improving climate % Below Peak Price per Flowing Mcfe/d .x $12,000 for value accretive acquisitions -.2x Peak Industry Shift to Horizontal, Unconventional Development ~2012 Price -1.7x -2.x Regional reputation as credible purchaser -5.x $10,000 -5.3x Large energy players streamlining operations -10.x $8,000 -8.9x -9.1x $ per flowing mcfe/d Uniquely positioned to assess and execute -12.8x -15.x $6,000 $10,784 $9,000 -20.x $4,000 -25.x $2,000 $4,059 $3,647 -25.7x $1,721 $1,089 $1,067 $780 $404 -30.x $- Diversified AB Deep Fund 1 Broadstreet Eclipse Seneca EnerVest Titan Resources Resources LLC 2006 2011 2012 2014 2015 2016 2017 2010 2017 Interim Results 9
Stated Objectives at IPO… DELIVERED; Creating Value for Shareholders • Largest O&G listing in the past 2 years Successful AIM IPO • One of only two O&G (out of 90) AIM listings to pay a dividend • $85m of equity raised in 2017 Financially Strong • $75m of liquidity at 30 June 2017 Significant Production • ~11,040 net barrels of oil equivalent production per day pro forma for the most recent Titan Energy acquisition • Producing Asset CAGR growth of ~90% over the past 4.5 years Significant Scale • Current portfolio of ~17,000 long-life, low-decline producing wells • Closed two acquisitions in just 8 months since February 2017 IPO • Adjusted EBITDA margin improved 500 basis points, rising to 40% in Reducing Costs the first month following the acquisition of ~8,000 additional wells as the optimization process begins • Paid its first bi-annual dividend in July 2017 ($2.9m; $0.0199/share) Dividend Paying • Declared its second bi-annual dividend in September ($0.0199/share) 2017 Interim Results 10
F inancial and Str ategic Review 11
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