Diversified Gas & Oil Trading Update

Diversified Gas & Oil Trading Update

Diversified Gas & Oil Plc (ISDX: DOIL), is pleased to provide a trading update following the year ended 31 December 2015.

Trading for the year to date has been challenging due to the softness of commodity prices, however the hedging program implemented by the Company has insulated cash flows and earnings for which it was designed. Oil hedges
representing 50% of existing production were around $90 per barrel for all of 2015 and provided a lift to effective spot prices all year long. In addition, we utilized hedges for our natural gas production in 2015 that averaged around
$3.13 to $3.85 per mcf. Those hedges represented approximately 70% of our production in the year.

The hedging positions and the production levels, along with our continued success of managing expenses helped manage our existing cash flow and despite the falling commodity prices for oil and natural gas our results for the year
will be in line with the Directors forecasts.

In 25 June 2015 DGO listed its first issue of Bonds on the ISDX Growth Market and since then has raised GBP3.6m bringing the funds available to the Company to approximately GBP4.1m in four separate placings. These funds have been utilized
to close on two acquisitions and for corporate purposes. Since listing, the Company has made two scheduled coupon payments on its bonds in September and December as required in the Bond Instrument.

In July DGO completed the acquisition of all the assets of Broadstreet Energy in Ohio. These assets included approximately 500 conventional gas and oil wells producing approximately 40 barrels of oil per day and 1,100 mcf per day
of natural gas production. Also included in the purchase was a commercial salt water disposal well operating at 1,200 barrels per day of injection.

In November DGO completed the acquisition of Texas Keystone assets adding an additional 1,600 conventional wells in Pennsylvania and West Virginia. The wells add approximately 6,400 mcf per day of additional gas production to the company. As a result of the two acquisitions, DGO now owns and operates approximately 4,000 wells in Ohio, West Virginia and Pennsylvania producing approximately 10,000 mcf per day of natural gas and over 200 barrels of oil per day.

The Directors look forward to the coming year with confidence as the enlarged portfolio is projected by Management to deliver strong sales and increasing free cash flow even in the midst of a challenging commodity price environment. New natural gas hedges have been implemented which will assist in cash flow generation for 2016. Those hedges are for around 4,000 mcf per day of gas production and average $2.30 per mcf. Oil hedges have not been initiated for 2016 as the Company feels that minimal value can be obtained under the current swap prices with little downside risk to existing prices. The Company currently has an operating expense ratio of approximately $9.80 per barrel of oil equivalency and $1.81 per mcf equivalency which helps to sustain cash flows even in the low price environment.

The Company continues to identify strong M&A opportunities to purchase additional producing assets in its existing footprint. Low oil and natural gas prices have resulted in companies divesting noncore and distressed assets and DGO continues to be a buyer in this market. These assets will compliment our existing portfolio and provide us with an increase in revenues and net cash flow. Our ability to leverage our existing operating structure provides us with an opportunity to operate the assets more efficiently than larger companies with significant overhead.

Neither this announcement nor the information contained herein constitutes an offer or solicitation by Diversified Gas & Oil Plc for the purchase or sale of any securities nor does it constitute a solicitation to any person in any jurisdiction where solicitation would be unlawful.

The Directors of Diversified Gas & Oil Plc accept responsibility for this announcement.