One week after the Longmont City Council approved a seismic survey for eastern lands around Union Reservoir in Weld County, city staff told the council and the public that there may be a wrench in the works.
While the city has been working with Cub Creek Energy LLC and TOP Operating on mineral rights on city and Union Reservoir Company-owned land in Weld County, a separate oil and gas company has filed to alert the state to its interest to drill in the same area.
Denver-based Extraction Oil & Gas Inc. filed a drilling spacing unit application with the state agency Colorado Oil and Gas Conservation Commission on Jan. 19, Longmont general manager of public works and natural resources Dale Rademacher told council Tuesday.
The application alerts the state that Extraction is interested in drilling the area bordered by County Line Road to the west, County Road 28 to the north, County Road 5 on the east and the extension of Ninth Avenue to the south — essentially the land surrounding Union Reservoir.
While Cub Creek initially told Longmont that they would not file drilling applications on that same land until some point in the future after the seismic survey was completed, they’ve had to file a competing application with the state, Rademacher said.
Cub Creek has agreed, however, to hold back on filing a key form that is needed for the state to approve drilling. Rademacher said that Extraction forced Cub Creek’s hand and that Cub Creek was not trying to pull one over on the city.
“In order to protect their interests, Cub Creek has decided to protest the filing and file on their own,” Rademacher said. “It’s being done earlier than what we intended. We still are working to get through the seismic survey and get information and proceed logically through the process.”
The news is significant because while Longmont’s master contract and operator’s agreement to reduce the number of well pads and to work with the city at Union Reservoir covers TOP Operating and Cub Creek, Extraction isn’t a party to the agreement.
Rademacher said the city was only notified of Extraction’s application last week.
“It’s really sort of unfortunate and I think everyone tries to have communication around these issues rather than being surprised by it,” Rademacher said. “We’ve been working with Cub Creek now for several months. We’ve found them to be good working partners Cratosslot — transparent with what they’re doing and good with keeping their word … we’ve reached out to try to communicate with (Extraction) and we’ve talked with their attorneys. It’s unfortunate they’ve chosen not to communicate with us. But we haven’t given up. We’re going to keep calling them.”
Councilwomen Joan Peck and Polly Christensen asked for more details on how Extraction could file with the state on this land.
Rademacher answered that most of the land is leased to several different development companies and under Colorado law, a company doesn’t need to have a majority interest in a mineral lease to file its interest in drilling.
City Manager Harold Dominguez said that it seems Extraction may have bought the lease on mineral rights from another company and staff are working to figure out the details.
Rademacher told the Times-Call that a few things could happen with this situation. The state could consider competing applications from Extraction and Cub Creek at a March 20 COGCC hearing.
How the companies cooperate with local governments come into play during that decision, Rademacher said.
If the COGCC grants Extraction the permit, eventually that company could drill at Union Reservoir. Alternatively, Extraction and Cub Creek could come to some sort of agreement where one withdraws an application from the state application, Rademacher said.
Dominguez sought to reassure the council and the public and mentioned that city staff had met with COGCC Director Matt Lepore.
“I don’t think we need to leave this discussion and have the opinion that Extraction is coming in and we’re stuck dealing with this,” Dominguez said. “We don’t want everyone to think that this is a disaster. It’s not. There are processes we can go through and conversations we have to engage in.”
Karen Antonacci: 303-684-5226, antonaccik@times-call.com or twitter.com/ktonacci
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