(Alliance News) - Diversified Gas & Oil PLC has extended a commitment on oil and gas wells in Kentucky, US, for a further five years, it said on Wednesday.
DGO signed a deal with the Commonwealth of Kentucky in February, committing to either plug or return to production 50 wells a year. It has now been extended by five years to the end of 2028, on substantially the same terms as before.
DGO will add, however, an additional USD1 million bond, meaning Kentucky holds USD2.5 million from the company.
Other similar agreements include a 15-year pact with Pennsylvania and the same with West Virginia. Alongside Kentucky, these cover over 75% of DGO's portfolio.
"I would like to thank the Kentucky Energy & Environment Cabinet and members of the Department for Natural Resources and the Division of Oil & Gas for their partnership in this extension as we seek to serve the local communities in which we operate by providing reliable energy to the region while safely plugging wells," said DGO Chief Executive Rusty Hutson.
"This agreement, particularly in tandem with our existing agreements with the other states in which we operate, underpins our asset retirement program and provides clear visibility into the cash flows and operational responsibility required to deliver on our commitment to safely and systematically retire wells."
Shares were 0.5% lower on Wednesday morning in London at 109.50 pence each.
By George Collard; georgecollard@alliancenews.com
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