Diversified Energy Corporation, a prominent energy company, has recently agreed to plug over 2,000 abandoned wells in six states over the next decade as part of a settlement agreement reached in the U.S. District Court for the Northern District of West Virginia. The lawsuit, McEvoy v. Diversified Energy and EQT, alleged that the companies engaged in improper transfer of oil and gas wells and failed to properly plug non-producing wells, leading to environmental and health risks for landowners.
As per the settlement terms, Diversified Energy is required to plug a total of 2,600 wells by December 31, 2034, significantly more than the 580 wells previously mandated by state agencies. Additionally, both EQT Corporation and Diversified Energy will collectively pay $6.5 million to settle the lawsuit, with each entity contributing $3.25 million.
The legal action was initiated by West Virginia landowners in 2022 who discovered abandoned wells on their properties that were operated by Diversified Energy. The landowners claimed that the unplugged wells not only affected their property’s value and usability but also posed health and environmental hazards. In an attempt to dismiss the lawsuit, Diversified Energy argued that they were not obligated to plug the wells based on a prior agreement with the West Virginia Department of Environmental Protection. However, the federal judge overseeing the case rejected this argument, stating that the agreement did not absolve the company of its responsibilities to the landowners.
EQT Corporation was also implicated in the lawsuit for allegedly transferring ownership of non-producing wells to Diversified Energy through fraudulent means between July 2018 and May 2020. Both companies, while denying any wrongdoing, opted to settle the case to avoid prolonged litigation.
The settlement agreement encompasses a class of affected landowners who have the option to either have their non-producing wells plugged and forfeit their right to sue Diversified Energy until 2034, opt-out of the settlement and retain their legal recourse, or object to the terms of the settlement. The court will conduct a fairness hearing on April 11 to review and potentially approve the settlement agreement.
For further details and updates regarding the settlement agreement, interested parties can visit the official website at www.decsettlement.com.
In conclusion, the settlement agreement between Diversified Energy Corporation, EQT Corporation, and the affected landowners signifies a significant step towards addressing environmental and property rights issues arising from abandoned oil and gas wells. By holding the companies accountable for their actions and ensuring proper well-plugging procedures, the settlement aims to safeguard the interests of the landowners and mitigate potential risks to the environment.