Thompson Divide talks reach impasse

An energy company says it appears to be at an impasse in negotiations with a group trying to prevent drilling in the Thompson Divide area west of Glenwood Springs.

Those negotiations have become further complicated after the Thompson Divide Coalition learned SG Interests has some 10,000 acres of additional area mineral rights underlying what’s known as the Wolf Creek storage field. Coalition executive director Zane Kessler said Tuesday the coalition was caught by surprise when it learned of those leases.

The coalition has been seeking to buy leases from SG Interests and other companies to prevent drilling in the 220,000-acre Thompson Divide area.

SG hopes to drill an exploratory well on national forest land above Sunlight Mountain Resort.

A report consultants prepared for the coalition recently concluded Thompson Divide leases probably don’t have commercial volumes of oil and gas. The coalition recently cited that report in offering SG Interests $1.5 million for its leases, which the coalition said would make the company whole on its investments and provide an additional 50 percent return on investment.

In a written response, SG Interests’ vice president for land, Robbie Guinn, called that offer insufficient. He added, “The only real way to know if any part of the Thompson Divide area is economic to develop is to drill and complete a well and evaluate the results.”

In an interview, Guinn said TDC’s offer falls far short of covering legal, survey and other costs invested in the leases.

He also thinks talks are at an impasse because the coalition has made its offer contingent on passage of legislation providing for withdrawal of unleased Thompson Divide acreage from leasing and retiring of existing leased acreage when companies agree to sell or donate leases. SG noted that U.S. Rep. Scott Tipton, R-Cortez, has said he won’t support or introduce such legislation in the House, creating what Guinn considers to be “a significant hurdle.”

The coalition is interested in pursuing a lease exchange as a means of getting SG to relinquish its leases, but prefers one that includes the Wolf Creek leases. But SG says those leases aren’t open for discussion.

SourceGas uses that field to store natural gas in depleted formations. Guinn said SG perhaps four or five years ago acquired rights to drill in deep formations there.

SG is interested in drilling in the deep Mancos formation that other companies have begun successfully developing in western Colorado.

Guinn noted that the Wolf Creek leases aren’t subject to a “curative” review the Bureau of Land Management is conducting for area White River National Forest leases due to a lack of proper pre-leasing environmental analysis, and so they can be developed.

He said SG isn’t closing the doors to further offers from the coalition.

Kessler said Tuesday, “Despite SG’s recalcitrance, we remain committed to finding a solution that conserves the Thompson Divide area for our hunters, ranchers and snowmobile riders.”


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