Media Response

RNS Number : 8084O

Diversified Energy Company PLC

12 October 2021

 

12 October 2021

 Diversified Energy Company PLC

("Diversified" or the "Company")

Media Response

Diversified Energy Company PLC (LSE: DEC) issues the following response to an article published by Bloomberg.

Over the course of the last few months, the Company has engaged in lengthy and transparent dialogue with the journalists to ensure the article was factually correct and provided appropriate context for their footage and assumptions.  The Company believes the article fails to reflect this extensive and constructive engagement, nor does it reflect the positive environmental, social and economic benefits stemming from the Company's investment into - and stewardship of - its assets within communities in which the Company operates.

The Company believes that aggregating producing wells and tailoring operating programs designed to improve their performance and emissions profile addresses a void in the industry whereby wells often pass from one operator to another creating a 'churn' effect, removing long-term accountability for asset integrity. Without capable operators like Diversified, often less capable, less financially stable or less accountable, operators acquire assets from companies that are more focused on developing new wells. As a consequence, mature wells sometimes fall into disrepair and potentially emit in excess of levels that simple, routine maintenance would limit. The Company has demonstrated that aggregating assets is an important contributor to managing costs, improving well economics and enlarging a platform from which it can administer its well optimisation programs designed to improve asset productivity while reducing their emissions. Please refer to the Company's Sustainability information on its website including its most recent Sustainability Report, which it published in April, that further details the significant operational and environmental benefits it delivers to all stakeholders.

As it relates specifically to information provided within the aforementioned article, we understand that the journalists visited a small number of wells citing that several were emitting. For context, the Company notes:

· Wells sampled represents less than 0.05% of the Company's total portfolio of assets

· Maintenance to remediate the emissions from the sampled wells took less than 2 weeks and cost between $0 (labor only) and $300 per well for a total cost of less than $2,000 for all wells

· Extrapolated emissions across Diversified's entire portfolio are consistent with levels specified in the Company's public reports

· Measured absolute emissions are significantly less than those from newer wells that produce at higher rates

· Several of the noted emission sources related to pneumatic valves that were operating as designed and are a current priority of the entire industry to re-design; Consistent with its net-zero target, Diversified is evaluating equipment modifications that would reduce and potentially eliminate these emissions

· Average age of the wells visited was over 35 years, often with decades of economically productive lives remaining

· ~3 to 6+ other companies operated the wells prior to Diversified acquiring the asset

We also understand that certain wells visited were non-producing and, importantly, were not emitting. The Company had these wells on its list of those awaiting retirement, which it will safely retire in compliance with its long-term agreements using both internal resources and third-party vendors.

With regards to asset retirement, Diversified has a well-established, highly successful and well-funded program to systematically retire wells that have reached the end of their economic lives. The Company has demonstrated its commitment by annually retiring more wells than required under its long-term agreements with Pennsylvania, West Virginia, Ohio and Kentucky, and has also recently invested in its own well retirement personnel and equipment in an effort to continuously improve its processes and reduce costs. Reflective of its resolve and ability to meet future obligations, the Company posts regulatory retirement bonds for amounts significantly in excess of those generally posted by its peers, and has consistently affirmed its commitment to maintain a strong financial position for the benefit all stakeholders, including the states and communities in which it operates.

The Company provides transparent and fulsome disclosure of significant aspects of its business including its financial reports, sustainability reports and supplemental investor presentation materials, all of which the Company makes available on its website. Most recently and with its midyear results reporting, the Company announced its plans to host a Capital Markets Day in Q4'21 at which it will continue to unveil specific actions it is taking to advance its ESG efforts, meet all of its obligations including asset retirement, and consistently deliver value for its investors.

Diversified Energy Company PLC	[phone]
Teresa Odom
www.div.energy
[e-mail]
Buchanan	[phone]
Financial Public Relations
Ben Romney
Chris Judd
Jon Krinks
James Husband
[e-mail]

About Diversified Energy Company PLC

Diversified Energy Company PLC is an independent energy company engaged in the production, marketing and transportation of primarily natural gas related to its synergistic US onshore upstream and midstream assets.

 

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