(Alliance News) - Diversified Energy Co PLC responded on Tuesday to a congressional letter of inquiry which caused its shares to plummet.
Diversified Energy's shares are down 19% at 1,063.86 pence each in London on Tuesday morning. They traded at 1,302.00 pence each at close on Monday.
Diversified, the largest owner of US oil and gas wells in the country, received a letter on Monday from four members of the United States House of Representatives Committee on Energy and Commerce.
The letter requested information concerning the company's well retirement and emissions practices, and expressed concerns over the company's purchase of "a substantial share of the country's aging oil and gas wells."
Since 2016, Diversified has amassed over 70,000 oil and gas wells under its direct control, a significant number of which are so-called "marginal wells." These wells, according to the committee's letter, are "notoriously expensive and difficult to maintain."
The committee suggested that Diversified may be "vastly underestimating well cleanup costs," threatening its ability to cover the environmental liabilities associated with the plugging and cleanup of the aging wells.
This could create "thousands of orphaned, methane-leaking wells and undermine efforts to respond to the worsening climate crisis," the letter said.
The committee also expressed concern that Diversified might be able to defer billions worth of environmental liabilities and cleanup costs onto state governments and taxpayers.
The letter coincided with Diversified Energy shares' first day of trading on the New York Stock Exchange on Monday.
In response, Diversified has said: "the company is reviewing the letter and intends to engage in a positive and open manner, as it has continuously done, by providing information regarding the company's peer-leading environmental and operational actions that underpin its responsible asset stewardship approach."
The company pointed to its past efforts at responsible well-retirement, as well as its "expanded" well retirement segment, Next LVL Energy, which allowed it to retire around 214 wells in 2022.
"As a company that is part of the solution to a broader challenge of aging infrastructure that many industries face, including the energy industry, a core thesis of the unique and differentiating value we create is making the necessary time and monetary investments into the assets to improve their environmental and operating performance," the company said.
By Hugh Cameron, Alliance News reporter
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Diversified Energy (DEC)