Interest in Routt County oil leases increases
Planner reports increased interest from oil companies in lease process
May 23, 2011
Routt County officials are expecting local oil speculation to increase in coming months.
"I have a lot of inquiries," Routt County planner Chris Brookshire said Monday.
Brookshire is Routt County's local government designee for oil and gas permitting requests and questions. She said inquiries from three oil exploration companies — Quicksilver Resources, based in Fort Worth, Texas; SWEPI, a subsidiary of Shell Oil; and True Oil, based in Casper, Wyo. — have increased in the past two months. The companies have been calling and meeting with Brookshire about Routt County's permitting process and regulations.
Brookshire said none of the companies have applied for new drilling permits.
"But I think it's just a matter of time before all three of them start coming in with applications," she said.
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In February, Colorado's State Land Board auctioned multiyear leases of surface or subsurface mineral rights on 19 Routt County tracts totaling more than 5,200 acres. Most of the tracts are in the Hayden area. Others are close to the Moffat County line.
Routt County leases sold in the Feb. 17 auction generated nearly $4.2 million in revenues for the Land Board, which channels revenues to Colorado public schools.
Quicksilver leased mineral rights on nine tracts totaling more than 3,500 acres, for a total price of more than $3.2 million.
Results from the Land Board's most recent auction May 19 were not available Monday.
Leases on private lands also could be changing hands.
"They're not buying the leases just to pay out a bunch of money," Routt County Commissioner Doug Monger said about oil companies. "I think all of us are anticipating a drive toward more activity in energy exploration in our county."
Brookshire and Commissioner Diane Mitsch Bush said county staff is placing more focus on the county's permitting regulations to see if increases in air or water quality standards, or other changes, are needed.
Brookshire theorized in November that much of the speculative interest could be traced to a high-producing well in Weld County, east of the Front Range. That well and the rolling terrain around Hayden each have subsurface layers of Niobrara shale.
The Niobrara is the same oil-bearing rock that is underlying productive wells in Jackson County, just over the Park Range from Hayden and Steamboat Springs.
The Jake Well in Weld County was struck in February 2010 and produced 50,000 barrels in the first 90 days.
Brookshire stressed that the interest in Routt County, for the moment, continues to be speculative.
"They're wildcat operations right now," Brookshire said. "They're hoping they'll find a site that works for them."
Brookshire said details of potential drilling locations and the magnitude of coming permit requests are not yet known.
"I won't know until they actually walk in the door and submit that application," she said.
— To reach Mike Lawrence, call 970-871-4233 or email mlawrence@SteamboatToday.com