“Asset retirement is an integral part of our business, and this acquisition strengthens our ability to safely and efficiently retire wells,” COO Brad Gray said of Diversified’s acquisition of Nick’s Well Plugging in a company release. (Source: Shutterstock.com)
Diversified Energy Co. Plc acquired Ohio-based Nick’s Well Plugging LLC (NWP), further expanding Diversified’s well plugging capabilities across Appalachia. Terms of the transaction weren’t disclosed.
“Asset retirement is an integral part of our business, and this acquisition strengthens our ability to safely and efficiently retire wells,” Brad Gray, Diversified’s executive vice president and COO, commented in a May 16 company release.
Privately held, NWP is a well-established plugging service provider headquartered in Warren, Ohio with a combined 50-plus years of oil and gas experience, including plugging oil and gas wells across Appalachia, where a bulk of Diversified’s portfolio is focused.
With its investment in NWP, Diversified is well-positioned to meet or exceed its stated commitment to retire at least 200 of its wells per year across Appalachia by 2023 and to offer its plugging services to other operators and state governments.
“Our investments to vertically integrate well-plugging expertise and equipment enable us to meet or exceed our own company targets and give the flexibility and capacity to offer services to other operators and states governments looking to retire orphan wells,” Gray said. “This acquisition is a win-win for Diversified, its stakeholders, the environment and communities in the states in need of increased retirement activities.”
Headquartered in Birmingham, Ala., and listed on the London Stock Exchange, Diversified’s business model focuses exclusively on buying high margin, low-decline producing assets in both the Appalachian Basin and its central regional focus area including across Louisiana, Oklahoma and Texas, which the company only established roughly a year ago.
With the addition of NWP’s two retirement crews, Diversified has eight total internal crews and expects to add a ninth crew by the end of the second quarter.
As part of the acquisition, Jason Nicholas and Tammy Angus joined Diversified’s existing well retirement subsidiary, Next LVL Energy.
Following a 30-year career with Haliburton, Orville “Nick” Nicholas partnered with his son, Jason Nicholas, and daughter, Tammy Angus, to found NWP in May 2010. Nick will serve as a plugging consultant to Diversified during a transition period, according to the release.
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