Gas driller works on keeping Thompson Divide leases
August 4, 2012
CARBONDALE – A second oil-and-gas company that leases public lands in the Thompson Divide area west of Carbondale has applied to consolidate its holdings into a unit, which would allow it to hold on to its leases beyond current expiration dates in 2013.
Antero Resources submitted an application to the Bureau of Land Management to create the Wolf Springs Unit, according to David Boyd, spokesman for the agency’s Northwest Colorado District. He said the office learned of the proposal last week from the BLM’s state office.
Antero Resources wants to combine seven leases comprising 11,700 acres, according to its application. The proposed Wolf Springs Unit is in terrain where Pitkin, Garfield and Mesa counties come together, roughly eight miles southwest of Carbondale. Boyd said the majority of the unit is in Garfield County, but exact acreages weren’t available yet.
Five of the leases in the proposed unit are set to expire on May 31, and the other two expire Aug. 31, 2013, according to the BLM’s records. Gas leases on public lands expire, in general, if there hasn’t been drilling within 10 years of the lease date.
However, if a unit is approved, only one well has to be in production to retain the consolidated leases, according to BLM regulations.
Zane Kessler, executive director of the Thompson Divide Coalition, said he suspects the application to create the Wolf Springs Unit is an effort to hold the leases longer, until a more favorable economic time for drilling.
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“This application occurs at the 11th hour,” Kessler said. “We’ve seen nine years of absolutely no activity up there.”
The coalition is working to prevent issuance of new gas leases in the 221,500 acres of the Thompson Divide area, and it is negotiating with gas companies to try to prevent activity on existing leases. Thompson Divide stretches from Sunlight Mountain Resort outside Glenwood Springs south to McClure Pass and to the west of Highway 133.
Antero’s request is the second application for unitization of leases in the Thompson Divide area. SG Interests applied earlier this year to create the Lake Ridge Unit by consolidating 18 of its leases on 32,000 acres of public lands. The BLM hasn’t determined yet if it will allow creation of that unit.
The Wolf Springs Unit is adjacent to and west of the Lake Ridge Unit, Boyd said.
In addition to seeking the unitization, Antero Resources is working on a separate application for a permit to drill on one of its seven leases in Thompson Divide, according to Boyd.
If one of the units is created or a well is approved on an individual lease, it would usher in the first gas drilling in the Roaring Fork River basin in several decades. The old Wolf Creek field, in Thompson Divide, was developed in the 1950s, but the wells are now used for storage.
The Thompson Divide Coalition opposed the creation of the Lake Ridge Unit. Kessler said the coalition also will oppose creation of the Wolf Springs Unit.
“The proposed unit is right in the heart of the backcountry,” he said.
The leases are at upper East Divide Creek, an important watershed that is critical for cattle grazing, wildlife habitat and the hunting and fishing outfitting industry.
Part of the terrain where Antero leases land is covered with dense forest where there are very few roads. It would be expensive to drill there, and natural-gas prices are hovering around 10-year lows. For those reasons, Kessler said he doesn’t believe it would be economically feasible for Antero to drill right now.
Peter Hart, an attorney for Wilderness Workshop, a Carbondale-based conservation group opposed to drilling in Thompson Divide, said most of the proposed unit falls into the East Divide-Four Mile Roadless Area or the Thompson Divide Roadless Area. Both roadless areas should be protected, he said.
Like Kessler, Hart said the application for a unit is a last-ditch effort by Antero to prevent its leases from expiring next year.
“It seems like they’re interested in creating a unit but not drilling tomorrow,” he said.
The Thompson Divide Coalition has offered to buy out existing leases. It offered Antero Resources $816,931 for its leases. Kessler said the offer was based on the public record of what Antero has paid for the leases and work it has done. He acknowledged that might not be for all Antero costs. The Thompson Divide Coalition is willing to negotiate to pay more for the leases.
“What’s the dollar figure they need?” he said.
Antero Resources’ corporate headquarters is in Denver. Company officials couldn’t be reached for comment on the unit proposal.