Governor Patrick Morrisey and Diversified Energy have announced the creation of the Mountain State Plugging Fund, a new financial assurance fund dedicated to retiring oil and gas wells in West Virginia. The fund, which represents a $70 million commitment over 20 years from Diversified Energy, is designed to ensure that the retirement of oil and natural gas wells occurs at no cost to taxpayers.
The Mountain State Plugging Fund marks a public-private partnership aimed at setting a standard for responsible stewardship of aging energy infrastructure in the United States. According to the announcement, this initiative aligns with West Virginia’s efforts toward sustainable economic development and environmental safety.
Governor Morrisey said, “I’m proud to announce this transformative partnership with Diversified Energy, a company started right here in West Virginia. The Mountain State Plugging Fund is a bold step forward — delivering high-paying jobs as well as environmental and economic benefits for our communities while showcasing West Virginia’s leadership in energy innovation. This initiative sends a clear message: West Virginia can both be a leader in energy dominance and in environmental solutions.”
Diversified Energy CEO Rusty Hutson, Jr. stated, “Diversified is proud to deepen our commitment to and investment in West Virginia through this historic partnership. Governor Morrisey’s leadership has been instrumental in creating energy solutions that protect our environment while strengthening our economy. This fund sets a new standard of financial assurance for the industry and reflects our shared vision for responsible energy development in West Virginia.”
As part of the agreement, Diversified will increase investment in its subsidiary Next LVL Energy, based in Bridgeport, West Virginia. Next LVL Energy will oversee asset retirement operations for Diversified’s wells under the fund and is expected to expand its fleet of more than 20 rigs over the next year. By the end of 2025, Next LVL aims to have plugged 1,335 wells in the Appalachian Basin—more than any other operator in the region—and plans to plug an additional 360 wells during 2025. The company will also perform leak detection, soil remediation, and habitat restoration.
The agreement also involves OneNexus, which provides financial assurance allowing operators to prefund plugging and abandonment expenses for oil and gas wells. OneNexus has partnered with Munich Re, a global insurance company with AA rating, ensuring that funds are permanent and secure when needed. Lockton, described as the world’s largest privately held insurance broker, collaborates with OneNexus to offer decommissioning solutions for energy operators.
West Virginia becomes the first state government to form such a partnership with an energy company aimed at eliminating future funding concerns for non-producing wells.
