New drilling in the works for our neck of the woods

Coal-bed methane is the target product for Texas company

XTO Energy Inc. is revisiting two drilling parcels in rural La Plata County.

XTO, a unit of ExxonMobil, came before the commissioners after La Plata County intervened in the Texas company’s application to the Colorado Oil and Gas Conservation Commission. The routine intervention allowed the county to forge a memorandum of understanding with XTO.

County commissioners on Tuesday voted 3-0 to approve tighter spacing for future XTO wells on the parcels between Tiffany and Allison. The two 320-acre parcels will be allowed to have up to four wells each. The units currently have one producing well each.

“We’re looking to drill these wells possibly in 2015,” Scott Thompson, an XTO regional land manager, told county commissioners. “It’s a preplanning process.”

The horizontal wells would target coal-bed methane, a plentiful resource in the San Juan Basin. Drillers have pulled back on exploring for coal-bed methane as prices plunged, and oil became more valuable.

The existing productive wells on the units were drilled in 2002 and 2003. The proposed wells would be drilled to a depth of about 2,100 feet. Thompson, responding to a question from Commissioner Gwen Lachelt, said the length of lateral drilling remains to be determined.

“I think that will be determined by where the surface locations are finally set,” he said.

The drilling would occur on land owned by Franklin Anderson. The local resident said he’s open to XTO’s plans.

“I want to see what their proposals are when plans get firmed up,” he said. “At the present time, I have no objections.”

Lyndon Harrison, an XTO assistant superintendent, referred questions about XTO’s plans to a Denver-based spokeswoman, who did not return a message.

XTO’s proposal comes against a backdrop of inactivity in the San Juan Basin. Natural-gas production in La Plata County fell 10.7 percent in 2013 to 351 billion cubic feet. It was the lowest level in Colorado Oil and Gas Conservation Commission data dating to 1999.

Natural-gas production closely follows prices. These prices spiked during the winter amid cold temperatures, but they again retreated in March. The commodity was trading Tuesday at $4.25 per million British thermal units on the New York Mercantile Exchange.

Natural-gas producers and service providers have suffered since 2009, when a long run of strong prices ended abruptly, leading to layoffs and idled rigs throughout the industry. Samson Resources Co., Coleman Oil & Gas Inc. and Elm Ridge Exploration Co. also have received permits to drill in La Plata County in 2014.

“Those have all been in the last couple of months, but I don’t know that they’re booming,” said Courtney Roseberry, a senior planner for La Plata County.

The XTO parcels are about 10 miles southeast of Ignacio near Colorado Highway 151.

The company’s well-spacing proposal now goes before the COGCC for a hearing April 28.

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