Ursa hoping horizontal drilling will reduce impacts

Battlement Mesa residents are welcoming word from Ursa Resources Group II LLC that the company hopes to avoid oil and gas development within their unincorporated subdivision, possibly through the use of horizontal drilling.

The Texas-based company recently acquired the Piceance Basin assets of Antero Resources, including its leases in the community of several thousand people near Parachute. Antero previously had proposed drilling up to 200 wells from 10 pads in Battlement Mesa, prompting concern about potential health and other impacts.

Don Simpson, Ursa’s vice president of business development, told residents in a meeting in Battlement Mesa last week that it has no plans to drill there this year, and may not do so at all.

He added, “We don’t want to drill in (Battlement Mesa) if we can help it.”

“I think that satisfied most of the residents in here,” Battlement Mesa homeowner Don Mumma said following Simpson’s comments. “I think that’s what the people wanted to hear.”

With natural gas prices lower, Antero had suspended Piceance Basin drilling prior to the sale. Ursa plans to begin operating one rig later this year, alternating between the Silt area and the Battlement Mesa area outside the subdivision.

Simpson said the company has expertise outside Colorado with horizontal drilling, and hopes to use the technique in Garfield County. Horizontal drilling involves drilling down, and then turning 90 degrees to follow a geological formation laterally to distances that in Ursa’s case have reached two miles. Simpson said that would allow drilling at greater distances from urban areas.

“That’s one thing we like about it and we know you like about it,” he told Battlement Mesa residents.

However, Ursa officials cautioned that it’s only experimenting locally with the technique at this point. Some companies have begun experiencing some success in using horizontal drilling to tap natural gas in deep local shale formations. But because of differing geology, local drilling in the Williams Fork sandstone where most Piceance gas is produced has almost exclusively involved wells that tap that formation vertically, although they may angle out directionally from a well pad to reach it.

Antero had drilled a Silt-area horizontal Williams Fork well that Ursa has been working on hydraulically fracturing. While Ursa is excited about the prospects of local shale drilling, Simpson said its current focus is Williams Fork development.

Ursa officials this week also met with Silt-area residents, a number of whom voiced concerns about possible impacts from drilling. Simpson said he has a home two miles from an oil well in Texas, and drilling can coexist in areas where people live “if it’s done right,” which he said Ursa is committed to doing.

Simpson also was asked in both Silt and Battlement Mesa about potential hiring. While the company already has staffed up, he advised job-seekers to “stay tuned” because Ursa wants to grow in the Piceance by means that could include buying more companies’ local assets.


COMMENTS

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Don’t expect another job creating boom. A horizontal well costs at least 2.5 times as much as a standard deviated well in the area. With gas prices down, there is no incentive to drill other than experimental tax write off operations.

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