Deer Creek site open, but lack of business is apparent
The company that owns the Deer Creek evaporative ponds used to treat produced water from hydraulic fracturing told federal regulators it was considering selling the Whitewater-area facility.
Operations at the Deer Creek ponds north of U.S. Highway 50 near the Delta County line appear to have been suspended and an industry spokesman said he was aware of some “intermittent” interest on the part of buyers.
One Arizona phone number for the company, Alanco Technologies, was disconnected and officials didn’t immediately respond to messages left at other company numbers.
Alanco, however, did say in a first-quarter filing with the Securities and Exchange Commission that business was slow.
Alanco “is continuing to analyze options to monetize current and future operations of Deer Creek, including a potential sale,” the company said in its filing.
Alanco Technologies owns Alanco Energy Services, which operates Deer Creek, two ponds on eight acres.
The Mesa County Commission last year took no action in revisiting the conditional-use permit for Deer Creek, but left the door open should residents lodge complaints about foul odors from the facility.
The county, however, has received “no complaints, partly because they haven’t been operating very robustly lately,” Keith Fife, natural resources liaison, told county commissioners on Tuesday.
Alanco officials told state regulators that Deer Creek remains open for business — a key element in maintaining the facility’s solid-waste permit from the Colorado Department of Public Health and Environment.
The company reported to the SEC revenues of $700 from Deer Creek in the first quarter of this year. In the first quarter of 2016, it reported revenues of $13,100.
Business was slow at Deer Creek because of a general slowdown in drilling tied to falling oil and gas prices, Alanco said in its filings.
The state permit requires the company to restore the evaporation ponds when it closes them, a cost that Alanco estimated to be $434,000 in March.
The company had set aside $187,600 toward restoration, according to the filing.
The Deer Creek site remains an attractive one for the natural gas industry, said David Ludlam, executive director of the West Slope Oil and Gas Association.
“It’s good geographically, it’s good topographically and it’s good climatically,” Ludlam said. “We need an operator with the bandwidth to manage the property” to meet regulatory requirements.
Alanco Technologies last year approved a plan to sell 160 adjacent acres known as Indian Mesa to raise cash for another venture: buying behavioral health companies.
That plan, however, never came to fruition, the filing said.