Extended Ohio Agreement

RNS Number : 3078H

Diversified Gas & Oil PLC

24 March 2020

 

24 March 2020

DIVERSIFIED GAS & OIL PLC

("DGO" or the "Company")

Extended Ohio Agreement

Diversified Gas & Oil PLC (AIM: DGOC), the U.S. based owner and operator of natural gas, natural gas liquids and oil wells as well as midstream assets, is pleased to report that it has extended its five-year definitive asset retirement agreement with the state of Ohio ("Ohio") by an additional five years, now covering asset retirement activities through the period ending 31 December 2029 ("Agreement").

The terms of the Agreement remain substantially unchanged while increasing DGO's commitment to plug gas and oil wells to 20 wells per annum for the duration of the Agreement, which represents an increase of 2 wells per annum from the prior agreement. The Company will also post a surety bond of $0.65 million for the life of the Agreement and for benefit of Ohio where DGO owns and operates approximately 7,100 wells. The Agreement remains aligned with the Company's ongoing Systematic Asset Retirement Programme to safely and permanently retire those wells that have reached the end of their productive lives.

Prior to extending the original agreement, DGO was in full compliance with its terms and during 2019, successfully plugged the required 18 wells. Continuing its commitment to environmental stewardship and transparency with respect to the Company's long-term asset retirement commitment, DGO worked proactively with state regulators to extend the plugging agreement.

Inclusive of this Agreement, DGO has agreements of ten years or longer with Kentucky (10 years), Pennsylvania (15 years; extendable to 20 years), West Virginia (15 years) and Ohio (10 Years) covering more than 98% of its total gas and oil wells with related bonding arrangements in these states approximating $13.2 million.

Commenting on this extended agreement with Ohio, CEO, Rusty Hutson, Jr., 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."

Enquiries:

Diversified Gas & Oil PLC Rusty Hutson Jr., Chief Executive Officer Brad Gray, Chief Operating Officer & Finance Director Eric Williams, Chief Financial Officer Teresa Odom, Vice President, Investor Relations www.dgoc.com [e-mail]	+ 1 [phone]
Cenkos Securities plc (Nominated Adviser) Russell Cook Katy Birkin Ben Jeynes	[phone]
Mirabaud Securities Limited (Joint Broker) Peter Krens Edward Haig-Thomas	[phone]
Stifel Nicolaus Europe Limited (Joint Broker) Callum Stewart Jason Grossman Nicholas Rhodes Ashton Clanfield	[phone]
Buchanan (Financial Public Relations) Ben Romney Chris Judd Kelsey Traynor James Husband [e-mail]

 

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