SALEM, Ohio — Diversified Energy Corporation will plug more than 2,000 wells over the next 10 years in West Virginia, Ohio, Pennsylvania, Kentucky, Virginia and Tennessee in accordance with a recent settlement agreement in the U.S. District Court for the Northern District of West Virginia.
In the lawsuit McEvoy v. Diversified Energy and EQT, the companies were alleged to have conducted improper transfer of certain oil and gas wells and Diversified Energy was accused of wrongfully using land by failing to plug non-producing wells.
Lawsuit
Diversified Energy must plug 2,600 wells in the six states by Dec. 31, 2034, instead of 580 previously ordered by various state agencies. EQT Corporation and Diversified Energy will also pay $6.5 million to settle the lawsuit, each paying $3.25 million.
The lawsuit was brought on by West Virginia landowners in 2022 who had abandoned oil and gas wells on their property operated by Diversified Energy. The landowners alleged the unplugged wells interfered with their enjoyment of the property, lowered its value and presented health and environmental risks.
In a move to dismiss the lawsuit, Diversified Energy claimed it did not have a “duty” to plug the wells according to a previous agreement with the West Virginia Department of Environmental Protection. In 2018, WVDEP granted the company a slower timeline than what is required by state law to plug 50 abandoned wells over 15 years.
Federal Judge John Bailey dismissed the motion saying the agreement was “simply an exercise” of the state agency’s authority and “has no effect” on landowner’s property rights.
EQT was included in the lawsuit for fraudulently transferring ownership of several hundreds of non-producing wells in West Virginia to Diversified Energy between July 2018 and May 2020.
Diversified Energy and EQT Corporation deny any wrongdoing but settled the case to avoid further litigation.
Settlement class
Landowners who qualify for the settlement include surface right owners where a Diversified Energy oil and gas wells was from July 2022 to November 2024 in the six states included in the settlement.
Landowners that qualify as part of the case have three options: (1) get their non-producing wells plugged and give up legal rights like the right to sue Diversified Energy until Jan. 1, 2034 for failing to plug a well; (2) opt-out and keep their right to sue. The deadline to opt out is Feb. 18 and (3) object to the settlement and explain to the court any disagreements. The deadline to object is March 17.
The court will hold a fairness hearing on April 11 at the U.S. District Court for the Northern District of West Virginia, 1125 Chapline St., Wheeling, to consider approval of the settlement.
For more information, visit www.decsettlement.com.
