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County drilling applications jump in ’14

Recent price drop has slowed activity
A drilling rig south of Durango works at an existing well pad near U.S. Highway 550. The natural-gas-and-oil industry filed more than double the number of applications to drill in La Plata County in 2014 than the previous year.

Natural-gas and oil companies filed 87 applications to drill in La Plata County in 2014, more than doubling the previous year’s activity.

That doesn’t mean there’s about to be a rush of drilling unless natural-gas prices rebound, said Christi Zeller, executive director of the La Plata County Energy Council.

“Just because we have a permit doesn’t mean they’re actually going to drill,” Zeller said.

Drillers filed 32 applications to drill in 2013.

Zeller cautioned that a steep drop in natural-gas prices recently could have operators rethinking their drilling programs.

Natural-gas prices plunged in January after rebounding in December. The price for San Juan Basin natural gas fell to $3.03 in January after averaging about $4.25 per one million British thermal units in December.

“We took a pretty hard hit in January of this year so far,” Zeller said.

Zeller’s comments came Monday night at a meeting of the La Plata County Cattlemen’s Association.

There are some indications drillers are looking at expanded drilling this year.

BP America plans to drill 20 wells in the Tiffany area this year, said Gwen Lachelt, a county commissioner who also serves as co-chairwoman of the Colorado Oil and Gas Task Force.

Lachelt said the wells would be infill drilling that would mostly use existing well pads. State and county regulations encourage drillers to use existing well pads whenever possible to minimize surface disturbance.

A BP spokesman did not immediately return calls seeking comment Wednesday.

Drillers have dramatically pulled back on activity in the San Juan Basin in recent years in reaction to lower prices.

Natural-gas production fell 9 percent to 358 billion cubic feet in La Plata County in 2013, according to the Colorado Oil and Gas Conservation Commission. Data from 2014 are incomplete.

BP America produced 175 billion cubic feet in 2013, or nearly half of all natural gas produced in the county.

cslothower@durangoherald.com



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