Diversified Energy Buys Second Well-Plugging Co. – Based in OH
Diversified Energy is growing again. In February Diversified bought out and merged in well-plugging company Next LVL Energy, headquartered in the Pittsburgh area (see Diversified Energy Buys Well-Plugging Co. NextLVL Energy). Yesterday Diversified announced it is buying a second well-plugging company, Nick’s Well Plugging LLC, based in Warren, Ohio, for an undisclosed price. Diversified will add the personnel and equipment from Nick’s to Next LVL, bumping up the existing six well-plugging crews to eight, with plans to add a ninth soon.
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Diversified Energy CEO Rusty Hutson and his wife Kimberly Hutson, both natives of West Virginia, recently donated $1.8 million to West Virginia University to help fund an experiential learning program, a nursing initiative, and neuroscience care at the university. We have chronicled a number of generous donations by Marcellus/Utica companies and their foundations. However, this has to be the single largest donation by an individual connected to the industry that we’ve seen, to date.
We’re back to covering just a single week of new permits issued. The good news is that the PA DEP’s reporting site was still up and online over the past week, so we have numbers! In Pennsylvania, 11 new permits were issued last week, with Coterra Energy (formerly Cabot Oil & Gas) getting the lion’s share (nine permits), all of them in Susquehanna County on two well pads. Ohio issued seven new permits last week, with Gulfport Energy scoring four of the seven, all on the same pad. West Virginia issued just two new permits, one to Antero Resources and the other to Tug Hill Operating.
Another genius move by Diversified Energy (formerly Diversified Gas & Oil). Diversified owns close to 8 million acres of leases with some 67,000 (mostly) conventional oil and gas wells. Most of Diversified’s assets are located in the Appalachian region. With that many old oil and gas wells, the company ends up plugging a number of them each year. In the past, one of the vendors Diversified has used to plug old wells is Next LVL Energy, headquartered in the Pittsburgh area. Diversified announced yesterday it is buying Next LVL.
With the ever-changing landscape of mergers and acquisitions in the shale industry, including here in the Marcellus/Utica, it’s helpful to check in every now and again with a “top 10” list. This time our top 10 list is for the largest shale drillers/operators in Pennsylvania. The Pittsburgh Business Times recently updated its “Book of Lists” for active PA shale drillers, all 47 of them. We have a quick list of the top 10 below.
Diversified Energy (formerly Diversified Gas & Oil), which owns close to 8 million acres of leases with some 67,000 (mostly) conventional oil and gas wells, made 2021 the year to expand–outside the M-U region. The company purchased major assets in the Cotton Valley/Haynesville region of Lousiana, the Barnett play in Texas, and most recently, in the Mid-Continent in Oklahoma. Diversified got its start by buying up old conventional O&G wells in Appalachia. But a funny thing happened on the way to the forum…Diversified has begun buying older shale wells too. The company is now the fifth-largest owner of shale wells in the southwestern PA Marcellus.
Diversified Energy, which owns close to 8 million acres of leases with some 67,000 (mostly) conventional oil and gas wells (with over 400 Marcellus/Utica shale wells), made 2021 the year to expand–outside the M-U region. The company purchased major assets in the Cotton Valley/Haynesville region of Lousiana, the Barnett play in Texas, and most recently, in the Mid-Continent in Oklahoma. Diversified announced it has closed on its fourth purchase for 2021 in the Mid-Continent.
Hilcorp is a major driller founded in 1989 by Jeff Hildebrand. It is THE largest privately-held (stock not publicly traded) oil and natural gas exploration and production company in the U.S. Headquartered in Houston, TX, Hilcorp has over 1,825 employees in multiple operating areas including the Gulf Coast of Texas and Louisiana, Wyoming, New Mexico, Alaska, and (yes) in the Marcellus/Utica. While they don’t have a huge presence here in the northeast, Hilcorp does actively drill shale wells in Lawrence County, PA and Columbiana County, OH. A recent Forbes article based on an interview with Hilcorp CEO Greg Lalicker proved to be a revelation for us: Hilcorp is not unlike Diversified Energy (or maybe it’s the other way around).
Diversified Energy (née Diversified Gas & Oil) continues to expand *outside* of the Marcellus/Utica region. In April the company announced it had purchased ~780 net operated wells and leases in the Cotton Valley/Haynesville region of Lousiana for $135 million (see