US firm Diversified Gas & Oil extends Ohio well retirement agreement

US-based well operator Diversified Gas & Oil (DGO) has extended its five-year definitive asset retirement agreement with the Ohio Department of Natural Resources by an additional five years.

The agreement now runs until 31 December 2029.

The company noted that the agreement terms remain substantially unchanged while increasing DGO’s commitment to plug 20 wells per year, up from 18 wells in the prior agreement.

It will also post a surety bond of $650k for the agreement, where the company owns around 7,100 wells.

Commenting on the extended agreement with Ohio, DGO CEO Rusty Hutson said: “I would like to thank the Ohio Department of Natural Resources and the Division of Oil and Gas Resources for their partnership in this extension as we seek to serve the local communities in which we operate by providing stewardship of our resources and assets to safely retire wells that have reached the end of their productive lives.

“This agreement, particularly in tandem with our existing agreements with the other states in which we operate, further strengthens our asset retirement programme, and provides clear visibility into the cash flows and operational responsibility required to deliver on our commitment to retire wells.”

DGO now has agreements of ten years or longer with Kentucky, Pennsylvania, West Virginia, and Ohio covering more than 98% of its total gas and oil wells with related bonding arrangements in these states approximating $13.2m.

In September last year, DGO acquired assets from EdgeMarc Energy and several of its subsidiaries.

In the same month, the company acquired natural gas gathering systems in Pennsylvania and West Virginia.