Investor Presentation December 2018 DISCLOSURE The information - PowerPoint PPT Presentation

Investor Presentation December 2018

DISCLOSURE  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. 2

ABOUT DIVERSIFIED GAS & OIL  E&P company focused on acquiring and managing oil and gas producing assets in the Appalachian Basin Overview  Publicly traded on the AIM (LON:DGOC)  Targets low-risk, low-cost, long-life assets Ohio Pennsylvania  Closed four significant acquisitions in 2018 for an aggregate purchase price of $938 million. West ― The acquisitions have increased DGOC’s daily net Virginia Kentucky Virginia production 7x YTD from ~10 Mboe/d to ~70 Mboe/d and PV-10 from $225 mm to $1.6 billion. • APPALACHIAN BASIN GAS AND OIL PRODUCER 2018  Raised $492 million of equity to fund growth Highlights – $439 mm in two public equity offerings Tennessee $53 mm private placement acquisition consideration (g) –  Established a conforming facility with a syndicate of eleven traditional bank lenders Highlights  Achieved Net Leverage Ratio below ~ 2.0x to 2.5x target Current Net Daily Production (a) 70 Mboe/d PDP Reserves (b) ~493 MMboe Realized benefits of enlarged scale  PDP PV-10 (b) ~$1.6 Billion ― Successful well management program Number of Wells ~60,000 Strong ― Continued reduction in unit operating expense 2018PF ADJ EBITDA (hedged) (c) ~$144 Million Outlook ― Pricing optionality from midstream expansion Net Debt / EBITDA (d) ~ 1.8x ― Enhanced organic growth opportunities Market Capitalisation (e)  Robust pipeline of growth opportunities remains robust ~$733 Million Enterprise Value (f) ~$1,239 Million Footnotes: (a) Current Net Daily Production represents October 2018 volumes, inclusive of the recent Core acquisition effective 01Oct2018; b) PDP reserve volumes and PDP PV-10 value is inclusive of the Core acquisition; (c) YTD Actual Adj EBITDA through 30Sept2018 (~$73mm) plus 31Oct2018 Actual Adj EBITDA times 3 (~$23.6mm x 3 = $71mm) for a proforma 4Q18E that totals 2018PF Adj EBTIDA of ($73mm + $71mm =) 3 ~$144mm, inclusive of settled hedges; (d) $507mm Net Debt at 30Nov2018 divided by annualized October 2018 Adjusted EBITDA (=23.6mm x 12 = $283.2mm); (e) Share price of 106p and an exchange rate of 1.2745 as of 30 Nov 2018; (f) Enterprise Value uses Market Capitalization as of 30 Nov 2018 with a stock price of 106p and an exchange rate of 1.2745; (g) Represents the 35 million shares issued to the sellers of Core Appalachia.

BUSINESS MODEL: ACQUIRE, PRODUCE, DRILL Acquire and manage producing natural gas and oil properties to generate cash flow, providing stability and growth. Organic Inorganic Ongoing Result Maximize Execute Create Target PDP Production ; Low Risk, Acquisitions Value Minimize Low Cost Costs Drilling Footnote: 4

COMPANY HIGHLIGHTS  Focused on Low-Risk, Low-Cost, Long-Life Producing Assets; Current Adj EBITDA margins ~60%  Reserves are 100% PDP with average estimated remaining lives of ~40 to 50+ years  Tight geographical profile provides advantageous Economies of Scale  Large Undeveloped HBP Acreage position provides a significant organic growth platform  Established Consolidator of Choice in Appalachia; Track record of successful, accretive acquisitions  Business model underpinned by a commitment to prudent Stewardship and Sustainability 5

THE DIVERSIFIED ADVANTAGE Cost Advantaged  Organizationally built to maintain low unit-operating costs on existing stable, low-decline production that doesn’t require high IP rates from new wells to remain low Per Boe (UnHedged) (a) Per Mcfe (UnHedged) (a) $3.23 $19.36 ~60% Margin $20.00 ~60% Margin $3.00 $1.94 $11.65 $15.00 $2.00 $1.29 $10.00 $7.71 $1.00 $5.00 $- $- Cash Costs Avg Realized Price Cash Costs Avg Realized Price Operating G&A Operating G&A  Typical E&Ps, including the sellers of these assets, typically have cost structures burdened with high cost fixed structures that include geologists, petro-physicists, drilling engineers, chemical specialists & additional support required of drilling operators. DGOC is structured with a lower cost structure optimized to manage the type of assets owned.  DGO’s combination of vertical integration and gas-rich assets that require minimal workover maintenance provide insulation from service cost reflation to which typical E&Ps are exposed. Focus Financial Returns Built For Efficiency  Built the organization to optimize production from mature, low-decline  Significant free-cash generation provided by ~60% Adjusted wells EBITDA margins that allow DGO to either:  De-leverage quickly or  Sellers are focused on high cost unconventional development  Fund growth without increasing leverage  Strong hedge portfolio protects cash flow during periods of volatility (a) Cost and Average Realized Price data reflects the month of October 2018 6

ASSET HIGHLIGHTS • DGOC operates a Large Portfolio of Producing Wells Driving Stable Cash Flows Benefitting from: Low operating costs (Ongoing optimization) Mature Low ongoing maintenance capex (~$5 mm annually) Wells Enhances the economics of U.S. Onshore producing gas Significant Low-Risk upstream assets and provides and oil assets. ( Average Midstream political & meaningful additional revenue production mix: 87% natural gas Footprint operational with recent growth increasing stream ( low maintenance CapEx of liquids production ) ~$15 - $17mm annually ) Provide stable and significant Averaging ~4,200 ft vertical wells Shallow Low Decline free cash flow. The majority into low permeability reservoirs Depth Rates of DGO wells, based on their sitting above the shale. >99% vintage, decline at ~5% per are conventional wells. annum. Long Well Life Estimated from ~40 to 50+ years with significant well control. 7

MAXIMIZE PRODUCTION: REACTIVATING INACTIVE WELLS One of DGOC’s fundamental objectives is to return previously unproductive wells to production. ~ 130 CNX (a) The Process: Wells Returned in last 90 days (a) Perform light well maintenance (“workover”) Swab the well to remove fluid Repair flow lines Sell production to home or land owner Increase pressure with compression (a) These ~130 wells returned to production from 01Sep2018 to 30Nov2018 are incremental to the previously reported 524 wells returned to production from 01Jan2017 to 31Aug2018, increasing the total to over 650 wells. 8