Diversified Gas and Oil could benefit from Brexit, its chief executive said today, as the company posted a leap in earnings of 912 per cent as production rocketed.

Rusty Hutson said his US-based company, which is denominated in dollars, will see little negative impact of Britain’s exit from the European Union, and might even see an upside.

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“I think Brexit is in some way benefiting us because we are dollar denominated. So a lot of the uncertainty around Brexit has not impacted us as much simply because our businesses is onshore in the US. It's not really relying upon anything in the UK,” he told City PM

His comments came after Diversified showed adjusted earnings before interest, tax, appreciation and amortisation (Ebitda) jump a massive 912 per cent to $162m (£122m).

This follows a year where the company made four acquisitions totalling just under $1bn, helping to push up revenue nearly 600 per cent to $290m. This year could be “as good, or better” for acquisitions, he said.

The company pushed up its production of gas, oil and natural gas liquids to nearly 15m barrels of oil equivalent, a 523 per cent increase.

Most notable was a more than 2,800 per cent rise in gas liquids production.

However, shares reacted poorly, dropping 3.85 per cent at just past midday to 112.5p.

Hutson said he is frustrated by the reaction from the market in recent months, especially considering its 9.5 per cent dividend yield.

“I feel like we’re very undervalued at this point. Our dividend yield, which we announced in December, a fourth quarter dividend of 3.4 cents, which was slightly higher than what consensus believe we would be paying,” he said.

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Robin Haworth at Stifel, said: “Our thesis on Diversified is that the gap to our 160p net asset value will close as the market gains comfort in the business model. This we would expect to take a period of time and a few clean sets of numbers following a number of acquisitions.”

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