A substantive article appeared in the Business Section of the Sunday Denver Post under the title of “Oil Greases Land Rush.”
Because oil and gas drilling is coming to Longmont’s Union Reservoir, the Sandstone Ranch area, the Sherwood Open Space area at County Road 20.5 and an area known as Evans #8, it is important that the Longmont community learn as much as possible about what this will mean to our quality of life.
Free Range Longmont has already begun coverage of this issue. We will continue to provide you with information from a number of perspectives.
Excerpts from the article referenced above appear below. The excerpts were chosen to serve essentially as “Cliff Notes” on the why – and why now – of what some are referring to as the next “mother lode.”
At the 2010 City Council retreat, our current mayor raised the issue of “mineral rights” that might be owned by Longmont, asking if they had been pursued. The subject garnered no further public discussion or visibility. We are only now learning that the city was approached in June of this year by TOP Operating to approve a conditional use permit for drilling operations on city property. We do not know what conversations may have taken place between Mayor Bryan Baum and his 2009 and 2011 campaign supporters prior to beginning the conditional use permit negotiating process. Longmont citizens should demand full disclosure from the mayor, members of city council and members of city staff.
“Oil Greases Land Rush” by Mark Jafee, The Denver Post
Between 2008 and 2011, leasing activity in six Front Range counties — Larimer, Weld, Arapahoe, Douglas, Elbert and El Paso — more than doubled, with 8,100 leases filed in the 12 months ending Aug. 30, according to county
Propelling the rush is the discovery of oil in the Niobrara — a geological formation sitting more than 6,000 feet below the Front Range. Most of the leasing and drilling has been focused on Weld County — the better known and most-promising part of the Niobrara
The strategy of the companies and speculators has been to assemble large land positions in the formation.
In this highly competitive and often secretive game, land companies working for drillers try to assemble parcels and negotiate leases. Often leases aren’t filed in the oil company’s name.
The stealth and shifting corporate decisions have left property owners confused and frustrated.
“Leasing is highly competitive,” said John Dill, a Denver- based spokesman for Chesapeake. “We often do mass mailing just to get the word out.”
The approach isn’t that surprising in a competitive market, said Neil Ray, president of the National Association of Royalty Owners’ Rocky Mountain Chapter. “Sometimes they are just testing the waters,” he said. “They’re trying to determine if it will be easy or difficult to get leases.”
The larger companies have now built fiefdoms along the Front Range.
EOG has 220,000 acres, mostly in northern Weld County, with a target of completing 45 wells in 2011, according to a company presentation.
Noble Energy more than doubled its holdings to 840,000 net acres in 18 months and plans to drill 85 wells, Chuck Davidson, the company’s chief executive, told investors in September.
Anadarko Petroleum Corp., based in suburban Houston, has a net 900,000 acres in Colorado — much of it from acquiring Union Pacific and Kerr-McGee interests. The company is aiming to drill more than 40 wells this year, according to Anadarko spokesman John Christiansen. [Anadarko Petroleum has hired Cougar Land Services to conduct seismic surveys to locate additional wells. They have requested permits from the city to conduct these surveys on city-owned properties. Unlike drilling, the city has the right to deny permission for these surveys.]
Oklahoma City-based Chesapeake has amassed 800,000 acres in Colorado and Wyoming.
The top drillers and number of permits for the 12-month period ending Aug. 30:
Mineral Resources: 1,018
EOG Resources: 594
Diamond Resources: 483
Marathon Oil: 50
Strata Oil & Gas: 45
Prospect Energy: 44
Nikki Stansfield, who lives in a suburban-style Larimer County development, persuaded neighbors to hire a lawyer to deal with a driller…. Still, concerned that state rules don’t provide enough protection to homeowners, Stansfield is seeking a meeting with Gov. John Hickenlooper.”The lesson is,” Stansfield said, “if it isn’t in your backyard now, it could be.”
Read the entire article here.