Citizens Group Asks DEP for Hearing on Transfer of Thousands of Oil and Gas Wells

Nov 20, 2018

 

11/20/2018 8:55 p.m.: This story was updated with information from Diversified. 

 

The West Virginia Surface Owners Rights Organization is asking state environmental regulators for a hearing to discuss a proposed transfer of more than 3,800 oil and gas wells located across West Virginia.

 


 

Natural gas driller EQT and others are proposing the deal. The move would transfer the rights to any oil and gas produced by these wells, but also the companies’ plugging liabilities to Diversified Oil and Gas.

Dave McMahon, a lawyer and co-founder of the WV Surface Owners' Rights Organization, said in a press conference with reporters that the transfer could create one of the most widespread economic and property rights issues in the state.

 

“We hope to present evidence that the financial position of Diverisifed is that it will milk these wells for the first 15 years, and after that they will run out of money and leave these wells across thousands of people's property across the state," he said.

 

WVSORO argues the wells are older, which means they will be less profitable, which increases the financial burden on the company to plug the well.

In a statement, Diversified spokesperson Adrian Williams said the wells in question have average remaining lives of 40-50 years, or more. Williams added that Diversified is a publically-traded company, which allows it to tap into significant financial capital. 

"We expect our assets to produce significant cash flow over the next 40 to 50+ years, a portion of which we will responsibly use to decommission these wells for the benefit of the communities within which we operate," the statement said. 

The group argues EQT and others should not be allowed to transfer the wells unless the well is currently producing enough oil and gas to make it profitable, thus ensuring there are enough resources to plug it later on. 

There are 12,000 abandoned wells and more than 4,000 are orphaned across the state. The group says this deal could lead to many more. In total, WVSORO said EQT and others want to transfer an estimated 17,000 wells in West Virginia.

 

WVDEP is expected to issue a decision on whether to grant a hearing in the coming months.