Diversified Energy named temporary unit operator amid notice dispute; board schedules formal hearing in September

Counsel and land representatives for Diversified Energy and several objectors clashed over whether the company’s acquisition of assets required mailed notice to hundreds of previously identified owners before the board could change unit operators for multiple pooled units.

Craig Blackworth, identified as director of land for Diversified Energy, testified that Diversified had filed written approvals and had purchased assets from Summit and asked the board to approve transfers of unit operator status. Opposing counsel and other objectors argued that notice published in the Bluefield Daily Telegraph — without mailed notice to named respondents in the pooling orders — did not satisfy the board’s notice requirements. Objectors cited board regulations and Virginia Code section 45.2‑1618 as the authority that requires mailed notice to affected respondents except in limited exceptions.

What the board debated: Board members and counsel discussed whether the operator‑change exceptions (for corporate name or corporate structural changes or transfers between parent/subsidiary affiliates) applied to Diversified’s acquisition of assets from an unrelated party. Objectors argued the purchase was not an internal corporate restructure and that the statute and board regulations require mailed notice to each respondent whose interest may be affected.

Actions taken and schedule: After discussion and a closed‑session consultation with legal counsel, the board: 1) designated Diversified Energy as the temporary unit operator for the listed pooled units so there would be a responsible contact for regulatory and operator issues; and 2) continued the contested items to allow Diversified to provide the notice the board directed and to allow parties to prepare for a formal hearing. The board set an initial 90‑day window for the applicant to complete required notice and to return to the board. The board also voted to hold formal hearings on related agenda items (6–12) in a separate, scheduled proceeding and directed staff and the director to arrange subpoenas and a formal hearing schedule; parties were asked to exchange written summaries ahead of that formal hearing.

Why it matters: Changing the designated unit operator affects which company is responsible for paying royalties, maintaining regulatory compliance, and responding to claims or violations. Objectors told the board that they and many other owners were not individually notified and that the change should not proceed without mailed notice and the opportunity for a full hearing.

Key speakers and positions: - Craig Blackworth, director of land for Diversified Energy, said Diversified had acquired assets and submitted written approvals and asked that the operator change proceed. "We are asking that 44 unit transferred over to the first 1... Appalachian operating company. They have authorized this," he said in testimony. - Objectors’ counsel (identified in the record) argued publication in the Bluefield Daily Telegraph did not identify owners by name and therefore did not meet the mailing requirement in board rules and Virginia law (45.2‑1618); they urged the board to require mailed notice.

Board guidance and next steps: The board instructed Diversified to provide the notice required by statute and regulation and set a timetable for resuming consideration. Board staff will coordinate scheduling of a formal hearing (parties discussed Sept. 16–17 as possible dates) and will set deadlines for exchange of pre‑hearing memoranda and for subpoenas or depositions as necessary.

Ending: The board’s decisions were procedural: it temporarily designated a unit operator to maintain regulatory oversight while the notice issue is cured, continued the contested items, and scheduled a formal hearing for a later date so parties can present evidence and legal argument on the merits.