Diversified’s Schedule to Plug Abandoned PA Wells in Dispute

Diversified Gas & Oil has been on a mission to buy as many non-shale (conventional) oil and gas wells as it can in the Appalachian Basin. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV). The sale included nearly 12,000 conventional wells with 200 million cubic feet per day of natural gas production, 2.5 million acres of leases, and some 6,400 miles of gathering pipelines. Along with all those wells comes a number of wells that don’t produce any more and need to be plugged (see PA DEP Orders CNX, XTO & Diversified to Plug 1,058 Abandoned Wells). Plugging wells is not cheap, although Diversified seems to have found a way to do it cheaper than other companies like EQT can do it. Still, Diversified is faced with plugging thousands of wells. You don’t do it all at once–you have tackle it well by well, year by year. The Pennsylvania Dept. of Environmental Protection told Diversified it wants 1,000 of its nonproducing wells plugged in the next five years. Diversified countered it would like to plug 2,000 wells over the next 20 years. Diversified’s strategy, according to a Pittsburgh Post-Gazette article, is to push off plugging as long as possible…

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