Gas Producer Behind Empire of Dying Wells Says It Will Fix Leaks
(Bloomberg) -- Diversified Energy Co. will increase the number of defunct oil and gas wells that it plugs each year and invest $15 million to find and fix leaks along its assets, executives told investors during a presentation Wednesday.
The Alabama-based natural gas producer said it plans to use aerial surveys to spot fugitive emissions from its wells and pipelines after completing two flights this year. Earlier this month, Diversified said it was deploying an additional 500 hand-held devices that detect emissions of methane, a potent greenhouse gas.
“We’re going to find all the leaks,” Rusty Hutson, Diversified’s chief executive officer, said at an investor day in Houston. “We’re going to fix everything.”
Diversified has become the largest owner of oil and gas wells in the U.S. by buying up older, low-producing wells, primarily in Appalachia. In October, Bloomberg News reported that it had visited 44 well sites owned by the company and, using an infrared camera and a gas detector, found significant methane emissions at a majority of them.
The company has agreements with state regulators that require it to plug a minimum of 80 of its idle wells a year. Diversified has plugged 115 wells so far this year, according to the presentation. By 2023, the company aims to ramp that to at least 200 wells annually.
In addition to fixing leaks in the field, Diversified will also improve its emissions reporting, executives said. The company is appointing an “independent expert” to verify its reported greenhouse gas emissions, Diversified said. Last month, Bloomberg News reported that Diversified told investors its emissions had fallen, while the numbers it disclosed to regulators showed an increase.
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