Shell Oil intends to act on Camilletti oil well permit this summer, but won't frack it

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Oil & gas issues in Routt County

— When Shell Oil looks to drill four new wells in Routt County this year, at the top of the list will be the Camilletti well north of Milner. But things will be different this time around.

Shell’s Matt Holman, a senior geologist and project manager in this region, said Wednesday that his company doesn’t intend to use hydraulic fracturing at the well. Quicksilver Resources previously had intended to use the controversial drilling technique at the Camilletti well.

“I want to drill that well, but I’m not going to frack it,” Holman said.

It’s a different story across the border in Moffat County, however. Holman told residents there Tuesday that his company was preparing to frack two wells there with a mix of water, sand and guar gel.

Holman was attending a public open house at Library Hall in downtown Steamboat Springs on Wednesday afternoon. Dozens of people circulated among different display booths where Shell employees stood by to answer questions in their particular areas of expertise. There were booths devoted to oil well safety, environmental issues and drilling technology, for example. Shell representatives held an open house in Hayden on Wednesday evening.

Shell and Quicksilver consummated a deal in early January that calls for the two companies to develop their interests jointly in the Northwest Colorado oil field known as Sand Wash Basin and to include Routt County. The area in which their leases are contained spans 850,000 acres. The agreement calls for Shell to assume responsibility for drilling and operation of new wells.

Routt County Planning Director Chad Phillips, who also attended the open house Wednesday, confirmed that although the county has approved the Camilletti permit, Quicksilver never has signed it, and it has not been issued.

Holman said he hoped to consult with planning staff to see if the details of the water quality monitoring wells the county required of Quicksilver might be adapted given that Shell doesn’t plan to use hydraulic fracturing.

“I assume some modification is in order,” Holman said. “We’ll rely on staff’s guidance.”

While remaining noncommittal, Phillips acknowledged that the elaborate water test well recommended by the county’s consultant for the Camilletti well no longer may be necessary.

Another change in the oil well permitting process since the Camilletti well was approved is that the Colorado Oil and Gas Conservation Commission has approved its new Rule 609 specifically calling for sampling of a defined number of nearby water wells before a well is drilled to establish baseline water quality and again after it is completed to detect any changes.

At the end of a different oil well permit hearing Tuesday afternoon, Routt County Commissioner Doug Monger remarked that “we’re out of the water business now” that Rule 609 is in place.

Holman said in addition to the Camilletti well, his company would like to drill three more this year in Routt County and 13 others in Moffat County. One Routt County well would be within 5 miles of the Dawson Creek well drilled in 2012 south of Yampa Valley Regional Airport.

Holman said none of the three 2012 Routt County wells is in production at this point as his company continues to explore the Niobrara Shale here. Generally, he said, the shale layer in Routt is deeper than it is in Moffat’s Williams Fork Unit, and as a result there is more gas associated with the oil here. That can be a good thing, Holman said.

“The gas creates pressure that has the energy to move the hydrocarbons around” and can potentially allow the oil to flow without stimulation through methods such as fracking, he said.

The Routt County Board of Commissioners voted to grant Quicksilver a permit for the Camilletti well in July after sometimes contentious public hearings that stretched throughout seven months.

Quicksilver objected to conditions of approval required by the county that required the energy exploration company to install water quality monitoring wells intended to detect any escaped chemicals, possibly related to fracking fluids, that might flow down gradient to homes in unincorporated Milner.

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com

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