Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has announced a new partnership with the State of West Virginia to establish the Mountain State Plugging Fund, a $70 million financial assurance program to retire oil and gas wells without burdening taxpayers.
Announced jointly by Governor Patrick Morrisey and Diversified Energy, the fund represents the first public-private partnership of its kind in the United States.
“This transformative partnership with Diversified Energy is a bold step forward," Governor Morrisey said in a statement, noting that it will deliver jobs as well as environmental and economic benefits for communities.
It is a 20-year program that will ensure the safe retirement of Diversified’s wells in West Virginia, and is designed to grow into a $650 million financial protection fund over time.
Diversified Energy chief executive Rusty Hutson, meanwhile, added that the company was “proud to deepen our commitment to and investment in West Virginia through this historic partnership,” adding that the initiative “sets a new standard of financial assurance for the industry.”
Diversified’s subsidiary, Next LVL Energy, will lead plugging operations, targeting at least 1,500 wells in the first two decades.