Wednesday, January 15, 2014

Lincoln County Oil Production.

Lincoln County's 2013 Oil Boom 

By Will Bublitz

Lincoln County experienced a small “oil boom” during 2013 with an unusually high number of new drilling permits being issued.

According to John Dewitt, Lincoln County Land Use Administrator, his office saw a surge in applications for well permits last year that it had not seen previously.

“Lincoln County issued 107 drilling permits during 2013,” DeWitt said. “At the start of last year, we had a little more than a hundred active or producing wells, so that more than doubles the number of oil wells we have.”

As of the first week of January 2014, there are a total of 182 oil wells in Lincoln County.
“That’s 182 wells that are active, producing or capable of producing oil,” DeWitt said. “That number also includes wells that have been permitted, but not yet drilled.” 

While issuing more than a hundred well permits last year may sound impressive, DeWitt cautioned it is not that many compared to some other areas in Colorado.

“I know the guy that handles well permits for Weld County and he issued 1,500 during 2013,” he said. “Weld County has over 20,000 active oil wells with as many as three wells on a quarter section. So, you could say that we had a small oil boom here in Lincoln County last year, but it was really more of a pop than a boom.”

Asked if last year’s upsurge in applications for drilling permits will continue into 2014, DeWitt said he could not make any predictions.

“I can’t be certain, but over half of the permits we issued in 2013 were since August, so it’s been cranking up,” he said. “The last seven we issued was on December 27.”

Currently, there are four main areas in the county where oil wells are operating or are being drilled.
“The main oil field is off County Road 26 between Limon and Hugo,” DeWitt said. “There are about 50 wells in that area.”

A second area is north of County Road 94. Fifteen wells are permitted in that area.
“The county recently issued permits for a smaller area off Highway 71 South where they have drilled a few wells and finding some oil there.”

DeWitt said the most recent well drilling area to become active is off County Road 35 in northern Lincoln County.

“The newest oil strike is in that part of the county,” he said. “They found a lot of oil there, and they have some good producing wells in that area.”

A total of 20 different companies are operating or working to develop oil well sites in Lincoln County.

“There have been numerous seismographic crew working here this past year,” DeWitt said. “Some of them are independent crews while other are owned by companies, The four biggest oil companies working in the county are Weipking-Fullerton, Cascade Petroleum, Pioneer Natural Resources and Nighthawk Production. They’ve done a lot of successful work already and are still drilling.”

Over the past several decades, a total of 629 oil wells were permitted in Lincoln County by the State of Colorado through its Oil and Gas Conservation Commission.

“Those 629 wells includes dry and abandoned wells now, as well as the active ones and the ones that were permitted last year,” DeWitt said. “If it’s permitted by the state that means the companies are seriously committed to drilling and finding oil because the state permit requires studies and documentation that can be fairly expensive to compile.”

Lincoln County has been tracking oil well development inside the county for several years. Unlike some other counties in the state, it requires oil well developers to get a county permit before drilling. 
“The State of Colorado requires a permit for all oil and gas drilling,” DeWitt said. “Lincoln County has also asked developers to get a county permit which is free of charge. One reason we asked them for a county permit is that it gives the Assessor’s Office a heads-up.

“The second reason we want a county permit is to run it by our county road and bridge foremen. The permit requires a map to show access to the main roads to the well site. The purpose is to let the foremen see if there are any bridges along the access roads that can’t support the weight of the heavy truck traffic going to and from the well sites.”

While a state permit is mandatory before drilling, DeWitt said the county permit is not. However, the Colorado Oil and Gas Commission supports the county permits.

“If we have a valid reason for it, the state commission will stand behind it,” he said. “We had one instance where a company changed landmen in the middle of the process and did not get a county permit. On the comment section of the state permit, I wrote the company had not gotten a county permit. The commission then told the company to get it, and it was resolved within 24 hours.”

Of the active wells in the county, only three have used hydraulic fracturing or “fracking,” a drilling  technique that is considered to be controversial by some.

“Fracking is not been used here much because I’m told the underground geological formations are not conducive to it,” DeWitt said. “Most of the wells in the county have been drilled vertically, but the newer horizontal drilling technique has been used. It’s completely different from fracking and has been used on a dozen wells.”

The safety record for the drilling operations in the county have been generally good for both the public and the environment.

“We had a couple of incidents last year,” DeWitt said. “There was a fire at one of the well sites off County Road 35 when a maintenance crew hit a gas line. The other incident was a 156-barrel release of oil at a site south of Genoa last fall. The spill happened when the oil was being transferred from a storage tank to an oil tanker. The company jumped on the accident right away and had it cleaned up within 24 hours.” 

1 comment:

  1. Are the people who own the mineral rights getting paid?