Core Viewpoint - Diversified Energy Company is under investigation for potential breaches of fiduciary duty related to the understatement of its asset retirement obligations for well decommissioning, which may significantly underestimate actual liabilities [1][3]. Group 1: Company Overview - Diversified Energy Company is the largest owner of natural gas wells in the United States, with over 73,000 wells located in the Appalachian Basin and Central Region [1]. - The company currently discloses approximately $642 million in Asset Retirement Obligations, averaging about $8,800 per well [1]. Group 2: Financial Implications - Industry benchmarks for decommissioning costs range from $50,000 to $150,000 per well, indicating that actual liabilities could be between $3 billion to $5 billion higher than what is currently disclosed [1]. - In November 2024, Diversified settled a class action lawsuit by agreeing to plug 2,600 wells by 2034, which represents a 4.5-fold increase over previous commitments [2]. Group 3: Regulatory and Legal Context - Congressional Democrats have raised concerns about whether Diversified is severely underestimating its plugging costs, with independent estimates suggesting over $2 billion in deferred environmental liabilities [2]. - Highful Law PLLC is investigating whether the directors of Diversified breached their fiduciary duties by allowing materially understated decommissioning liability disclosures and lacking adequate oversight [3].
Diversified Energy Company (NYSE: DEC) Under Investigation by Highful Law PLLC