Routt County approves new oil well near Moffat County line

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— The Routt County Board of Commissioners voted unanimously Tuesday to approve a permit that would allow drilling of the new Wiregrass oil well in far northwestern Routt County.

However, the well likely won’t be drilled until summer 2014, according to John Carmony, a consultant working on the project.

Carmony said after Tuesday’s lightly attended public hearing that his clients want to take some time to better understand the results from a well they recently drilled just across the Moffat County line on the Duncan Ranch. The well has yet to produce.

“This is a wildcat well,” Carmony told the commissioners about Wiregrass. “It’s well away from any (existing) production. It’s a high risk. We’re out on the edge, trying to find something no one has recognized before.”

The applicants said they want to have the option of fracking the well. The well pad site is about 35 miles northwest of Steamboat Springs.

Carmony said he has been working on retainer for a decade on behalf of three family-owned oil exploration companies in the Denver area to develop the oil field in an area of rolling hills near Routt County Road 82 and west of where Slater Creek flows northwest along a geologic fault line toward its confluence with the Little Snake River.

The well would be drilled on Wiregrass Ranch, owned by several longstanding farm families from an area north of Tampa, Fla. Duncan Shepherd, of Petroleum Resource Management, whose company’s name is on the permit, will serve as the operator.

Carmony told the commissioners that just as Shell Oil and Quicksilver Resources have drilled exploratory wells into the Niobrara shale between Steamboat Springs and Hayden during the past two years, his clients, too, are interested in the Niobrara.

“The long-term big play is going to be the Niobrara,” Carmony said. But that layer of shale runs deeper in northwest Routt at the western terminus of the Elk Range than it does on either side of U.S. Highway 40 in western Routt, where wells have been drilled to depths of 6,000 to 7,000 feet.

“Our plan is to drill to about 10,000 feet," about 1,000 feet above the Niobrara in that location, Carmony said.

The intent, he said, is to see if his clients can get some oil production from just above the Niobrara, enough to help fund drilling the well deeper, perhaps at an angle because, below 10,000 feet, the costs of drilling climb dramatically.

For the drilling phase of the Wiregrass well, Petroleum Resources intends to come in from the Duncan Ranch, which straddles the county line, and access the well pad on the edge of an aspen forest by improving an existing two-track ranch road. That would allow them to avoid county roads as well as to cross smaller Boulder Creek using a culvert rather than attempting to cross the significantly larger Slater Creek from the east, which would require an expensive bridge.

The Board of Commissioners’ approval of the plan is predicated upon the applicant's success in obtaining a waterbody crossing permit for Boulder Creek from the U.S. Army Corps of Engineers.

The applicants intend to monitor water quality in a spring used by the Porter family for its domestic water. There are no domestic water wells within a 1-mile radius of the proposed well pad, county planner Chris Brookshire told the commissioners.

Brookshire added that the only concern registered by Colorado Parks and Wildlife is that when drilling crews aren’t at the site, they store their food in bear-proof containers.

Commissioner Tim Corrigan made a point of saying that he could imagine different circumstances under which he and his colleagues might want to impose broader water-quality monitoring requirements that go beyond state requirements on the new well.

“This application has the benefit of not having many domestic water wells in the neighborhood,” Corrigan said. "This application also has the benefit of not having any critical wildlife habitat, so you chose your location well.”

“No,” Carmony replied, referring to the geology of the area. “Mother Nature chose the location.”

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

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