Firm again loses appeal over leases

For the second time in less than a month, a Denver-based oil and gas firm lost an appeal in its efforts to challenge the loss of three leases in the Mesa County portion of the Thompson Divide.

The Interior Board of Land Appeals issued the decision against WillSource Enterprise Wednesday, following another ruling on related appeal issues May 9 on the same leases. WillSource President Reed Williams previously has said the leases covered some 2,500 acres.

They were eliminated from a seven-lease unit near the headwaters of Divide Creek in the Thompson Divide, an area southwest of Glenwood Springs that activists have sought to keep from undergoing further drilling.

The Bureau of Land Management provides for grouping of leases into units to promote orderly development, with agreements spelling out obligations for drilling in the unit.

Over five years, the BLM repeatedly provided WillSource more time to drill before refusing to provide another   extension in 2009, at the urging of the Wilderness Workshop conservation group.

Under the unit agreement, the three leases then automatically were dropped from the unit, and they expired two years later because of a failure to develop them individually.

Wilderness Workshop staff attorney Peter Hart said WillSource has acted like it didn’t understand the terms of the unit agreement though they are clearly spelled out. He believes WillSource’s only recourse at this point would be to take the matter to court.

“My feeling is that they don’t have a strong case,” he said.

Williams couldn’t be reached for comment Friday afternoon.

Hart believes the BLM contracted the unit only because Wilderness Workshop pressured it to do so.

“These rulings are important. They confirm that companies can’t indefinitely hold leases without using them. These leases overlapped important wildlife habitat, inventoried roadless lands, a municipal watershed, and some of the most scenic aspen groves in the Thompson Divide,” Hart said. “The decision reminds that BLM has an obligation to protect the public interest, not just interests of oil and gas companies.”

Reed has noted that WillSource continues to hold the four other leases in the area, saying that they “are well on their way to being valuable with or without the three leases, and we intend to move forward.”

Hart said the BLM has demanded that WillSource put two wells drilled in the area in 2004 into production, and WillSource has an appeal pending with the Interior board over the BLM’s denial of its requests for suspensions of the four leases.


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