Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) said an article published by Bloomberg fails to reflect the positive environmental, social and economic benefits stemming from its investments into, and stewardship of, its assets.
Bloomberg's report found methane leaks at “most” of the 44 sites it visited and questioned whether the company would have enough cash to fund the eventual decommissioning of all its wells.
The FTSE 250 company issued a statement on Tuesday, stating that it believes that its process of aggregating producing wells and tailoring operating programs designed to improve their performance and emissions profile “addresses a void in the industry whereby wells often pass from one operator to another creating a 'churn' effect, removing long-term accountability for asset integrity”.
“Without capable operators like Diversified, often less capable, less financially stable or less accountable, operators acquire assets from companies that are more focused on developing new wells.
“As a consequence, mature wells sometimes fall into disrepair and potentially emit in excess of levels that simple, routine maintenance would limit.”
It said that it has demonstrated that aggregating assets “is an important contributor to managing costs, improving well economics and enlarging a platform from which it can administer its well optimisation programs designed to improve asset productivity while reducing their emissions”.
Diversified said, as it understood it, the Bloomberg journalists visited a small number of wells and citied that several were emitting.
Each of the wells had been operated by around three to six companies previously, it added, with the wells sampled representing less than 0.05% of the company's total portfolio of assets.
Maintenance to remediate the emissions from the sampled wells took less than two weeks and costs excluding labour were between $0 and $300 per well for a total cost of less than $2,000 for all wells, the company said.
It said measured absolute emissions are “significantly less” than those from newer wells that produce at higher rates, while several sources of emission were from pneumatic valves “that were operating as designed and are a current priority of the entire industry to re-design”, and for which it is currently evaluating equipment modifications that would reduce and potentially eliminate these emissions.
The average age of the wells visited by the journalists was over 35 years, the company added, often with decades of economically productive lives remaining.