RNS - Kentucky19 Feb 2019 07:28
DGO completes five-year agreement with
Kentucky Department for Natural Resources, Division of Oil and Gas
Diversified Gas & Oil PLC (AIM: DGOC), the U.S. based owner and operator of natural gas, natural gas liquids, and oil producing assets, is pleased to announce that it has entered into a five-year, definitive agreement with the Kentucky Department for Natural Resources, Division of Oil and Gas setting out the Company's well asset retirement obligations in Kentucky (the "Agreement").
Following the acquisition of Core Appalachia Holding Co LLC announced on 11 October 2018, the Company owns and operates approximately 60,000 gas and oil wells throughout the Appalachian region, of which approximately 7,500 wells are located in the Commonwealth of Kentucky.
Key terms of the Agreement include:
· DGO will complete an assessment of the Company's gas and oil wells in Kentucky by 30 June 2019, with primary analysis of non-producing wells across the state.
· DGO will plug 25 non-producing gas and oil wells by 31 December 2019 and a minimum of 20 non-productive gas and oil wells per annum for the calendar years 2020-2023.
· During calendar years ended 31 December 2020 to 31 December 2023, DGO will plug or return to production at least 50 gas and oil wells per annum, of which up to 30 wells per annum can be previously non-productive wells that DGO places back into production.
· If in any calendar year, DGO returns more than the required number of wells to production, DGO may carry that activity forward into future periods.
· No later than 30 days following the date of the Agreement, DGO will post a $1.5 million bond to the benefit of the Commonwealth of Kentucky, which the state will release following DGO's fulfillment of the Agreement's terms.
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