Diana May, El Paso County local government designee, presented updates regarding oil and gas operations in the county at a public meeting Feb. 6.
The meeting attracted several interested parties, including community members, representatives from Banko Petroleum Management, Ultra Petroleum, Hilcorp Energy Co., Cherokee Metro District, Select Energy Services, the Colorado Oil and Gas Association, the county’s development services department and the assessor’s office. The Colorado Springs local government designee attended as well.
John McKnight, Hilcorp operations manager, provided some background information and an update on a fresh water spill that occurred Dec. 16 at the Myers well site off Peyton Highway, north of Highway 94.
“We drilled to about 6,300 feet vertically and then went horizontally for about 3,000 feet,” McKnight said. “Everything went very well. From about 10,000 feet into the well bore up to the surface, we put the casing and cement. We started bringing in fresh water and kept them in above-ground Muscle Wall storage tanks. The first ruptured and then the second ruptured.”
Hilcorp’s corporate manager of external affairs, Justin Furnace, said that Select Energy built the tanks. The regional operations manager for Select Energy, Vince Longcor, said, “We have a joint venture with Muscle Wall, and our initial analysis is that it was a possible liner failure at the seam. The water (from the first tank) went downhill and took out the second tank.”
Furnace said multiple independent studies are under way to determine the cause, and Hilcorp and Select will continue working with the Colorado Oil and Gas Conservation Commission as needed.
Craig Dossey, director of the county’s development services department, said that Mustang Creek LLC, an oil and gas development company, has received a permit to conduct seismic testing in an area that straddles El Paso County and Elbert County. The area is north of Highway 94 near Judge Orr road, he said. As of the meeting date, Dossey said the company had not indicated an interest in obtaining a permit for drilling a well.
Mary Sharon Balakas, director of land for Ultra Petroleum, said the company has fracked their Ponderosa well site, which is south of Highway 94 near Blaney road. Ultra is still waiting on the core sample results from that well, she said.
Dossey also updated the attendees about the progress of a proposed liquefied natural gas pipeline that would run from an area southeast of Dumas, Texas, to Weld County. “The company (Front Range Pipeline LLC) has made an application to the county, and it’s under review,” he said. “They are working concurrently with Lincoln, Elbert and Weld counties on permitting.”
Michael Watford, Ultra Petroleum’s chief executive officer and president, had this to say in a Feb. 15 fourth quarter 2012 earnings conference call posted on Ultra Petroleum’s website.
"In Colorado's DJ Basin, results in the Niobrara have been disappointing. Although our core and log data indicate the presence of oil in the rocks, the petroleum system is immature, under-pressured and not commercial. This has been verified by completion of test results from both a vertical and a horizontal well. Ultra assembled 139,000 low cost acres in the play over the past two years, and has no significant lease expirations until 2014. We continue to monitor industry activity in the region but have no immediate plans for additional exploration in the area."