The arrangement was first agreed in February with an initial five-year term and it will now run until 31 December 2028.
In a statement, DGOC noted that the details of the arrangement remain substantially unchanged.
DGOC highlighted that the agreement is aligned with the ongoing ‘Smarter Well Management’ programme which aims to bring previously non-producing wells into production.
It means that the company will address at least 50 gas and oil wells per year – by either returning them to production or plugging them. A minimum of 20 wells will be plugged each year.
Additionally, with the extension, DGOC will post an extra US$1mln bond with the Kentucky authorities taking the total bond to US$2.5mln.
DGOC now has well retirement agreements of at least 10 years with Kentucky (10 years), Pennsylvania (15 years) and West Virginia (15 years) which covers over 75% of the company’s total well count.
It additionally has a five-year arrangement with Ohio, plus other deals, which altogether mean that over 98% of the group’s wells are under a retirement scheme.
“This agreement, particularly in tandem with our existing agreements with the other states in which we operate, underpins our asset retirement program and provides clear visibility into the cash flows and operational responsibility required to deliver on our commitment to safely and systematically retire wells," said Rusty Hutson, DGOC chief executive.
The company noted that it is committed to being a good steward of the environment in which it operates and it has worked proactively with the Kentucky authorities to extend the agreement.