- Diversified Gas & Oil said Friday it had entered into a 15-year agreement with Pennsylvania authorities that set out the company’s asset retirement obligations in the state.

Under the agreement, for years 1 to 15, DGO would plug a minimum of 20 wells a year. The company would also either return to production, or plug an additional 30 wells. If DGO plugged or returned more than its quota of 50 wells a year , it had the option to request to carry that additional activity forward as a credit for future annual requirements.

The agreement also required the the company to complete an assessment of its wells within Pennsylvania for which no production had been reported for 2017, and provide a report by 28 February 2021, to the state listing those wells that intended to return to production and those that it intends to plug.

A further assessment of all the company's other operated wells in Pennsylvania, would be completed by 28 February 2024, including a list of any non-productive wells the company would either return to production or plug.

The company had an option to extend the term of the agreement by five years.

DGOC also agreed to post a $7m bond to the state, which the state would return after the company fulfilled the terms laid out in the agreement.

'This long-term Agreement is significant for DGO and clarifies our asset retirement obligations within Pennsylvania where we operate approximately 40% of our wells,' said the Chief Executive, Rusty Hutson.

'We have invested the time necessary to negotiate an Agreement that meets the needs of Pennsylvania, the communities in which we employ its citizens and our Shareholders. This Agreement is underpinned by our unwavering commitment to vigilantly manage a best-in-class asset retirement programme.'

At 9:57am: [LON:DGOC] Diversified Gas Oil Plc share price was +6.5p at 111.5p

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