Diversified Buys 900 EQT Wells (67 Shale Wells) for $125M
Diversified Gas & Oil (DGO) continues its program of buying up mostly older conventional oil and gas wells in Appalachia. In April DGO cut a deal to buy 6,500 conventional wells spread across West Virginia, Kentucky, and Tennessee, along with a 4,700-mile gathering pipeline system located in WV, for $110 million (see Diversified Deal to Pick Up Another 6,500 O&G Wells in WV, KY, TN). DGO has done it again, this time buying 900 wells from EQT located mostly in West Virginia. The deal also includes 67 shale wells in Pennsylvania.
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Mountain Valley Pipeline (MVP), a 303-mile Marcellus/Utica gas pipeline from West Virginia to southern Virginia, is 90% built and in the ground. The final 10% is waiting on various lawsuits and regulatory agencies to resolve outstanding issues brought on by radicalized green groups. One of the places the pipeline has long been done and in the ground is Lewis County, WV. It’s a mountainous area. Inspectors recently discovered there have been “slips” of the land resulting in “at least three locations” where MVP has shifted.
Not unsurprisingly, the U.S. rig count (for both oil and gas, although mainly oil) continues to plummet week after week. The latest numbers show rigs taken out of active duty (laid down) decreased another 59 over the past week. That’s better than the 76 laid down the week before (see 
Diversified Gas & Oil (DGO) owns close to 8 million acres of leases with some 60,000 (mostly) conventional oil and gas wells. Their focus has been to acquire quality production and cash flow–regardless of the well or commodity type (gas or oil)–in the Appalachian Basin. They currently have over 400 Marcellus/Utica shale wells in their portfolio too. DGO announced it has a conditional deal to buy another 6,500 conventional wells spread across West Virginia, Kentucky and Tennessee, along with a 4,700-mile gathering pipeline system located in WV. The deal, “subject to ongoing due diligence,” is for $110 million.
The Pittsburgh Post-Gazette is reporting Marcellus/Utica condensate, produced in places like southwestern Pennsylvania and eastern Ohio, briefly touched and went below $0/barrel last week, before recovering slightly. The article says the price M-U drillers are getting for condensate is down 91% from January of this year. What’s lacking in the Post-Gazette story is context for how important (or not) condensate is as a revenue stream for M-U drillers.
Last week MDN told you about a flurry of oil and gas bills passed by the West Virginia legislature signed into law by Gov. Jim Justice (see 
MDN previously told you about two (of a number) of bills working their way through West Virginia’s annual 60-day legislative session that will create new tax credits aimed at luring petrochemical plants to the state (see 
The final bits of Columbia Gas Transmission’s Mountaineer XPress pipeline project (most of it located in West Virginia) went online just over one year ago (see 
While we’re sure he means well, Congressman David McKinley, a professional engineer (P.E.) from West Virginia (Republican) has thrown his support behind a “bipartisan” effort to create a new federal bureaucracy to oversee the decarbonization of the power generation sector. In other words, an effort that will end the use of natural gas to generate electricity–by 2050. We just can’t support something like that. It’s short-sighted, heavy-handed, and creating a new federal bureaucracy simply goes in the wrong direction. Period.
The work is happening fast and furious at the West Virginia state legislature right now. Legislators only have a 60-day session each year in which to pass new laws. More states should limit the time like WV! Yesterday two different Senate committees voted to pass three different bills, including SB 554, also known as the Lease Cancellation Bill.