Low gas prices keep Battlement drilling on hold

Because of low natural gas prices, Antero Resources is delaying its plans to drill in Battlement Mesa, a company official said this week.

The company will look at expanding a nearby well pad this year with the possibility of drilling eight more wells there, Kevin Kilstrom, vice president of production, told Battlement Mesa residents Monday night. But if drilling of those wells proceeds — something that’s also gas-price-dependent — Antero will use a novel closed-loop hydraulic-fracturing system in response to odor complaints involving the pad in 2010.

Antero wants to drill as many as 200 wells within Battlement Mesa, an unincorporated community near Parachute. To do so, it first will have to go through a land-use review process with Garfield County, as required by an original condition of approval for the development. Kilstrom said that will be a drawn-out process that Antero, as a relatively small company, can’t justify proceeding with at today’s natural gas prices.

“We’re just not going to undertake that in the near future,” he said.

Earlier this week, WPX Energy said low gas prices are behind its plans to operate five drilling rigs in the Piceance Basin this year, down from 11 last year.

Kilstrom said Antero is operating five rigs in West Virginia, where pricing is better because it’s closer to big markets. He said it also makes more sense for Antero to drill in the Silt area rather than Battlement Mesa because the Silt-area gas it produces contains much higher levels of natural gas liquids such as ethane, butane and propane, which add value to the gas.

Battlement Mesa resident Bonnie Smeltzer said she’s happy to hear Antero plans to postpone drilling in the community, even if only while prices are down. She also hopes the closed-loop system works as promised.

“If they haven’t improved it, it’s going to be the same old problems,” she said.

Smeltzer is among several residents who said they suffered ill effects from the odors in 2010. Kilstrom said while Antero isn’t convinced its operations caused such problems, the new approach will keep fracking and flowback fluids in a pressurized, closed-loop system, rather than allowing any venting from the top of tanks.

Antero said it invested about $800,000 in the system and tried it out successfully at a Rifle-area site.

Company officials aren’t aware of another such system being used anywhere else for fracturing. Companies increasingly are using closed-loop systems during drilling of wells to eliminate the need for open pits.


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