Encana sells two Thompson Divide leases, will let 2 lapse

Encana USA will let two leases expire in an area a coalition is trying to protect from oil and gas development, but has sold two others to another energy company.

Encana spokesman Doug Hock said Monday that the company will let two leases totaling 2,328 acres in what’s known as the Thompson Divide area expire Aug. 31 due to a failure to drill on them.

However, the company has sold two other leases totaling 4,483 acres in the area south of Glenwood Springs to SG Interests.

A group called the Thompson Divide Coalition has been trying to protect some 220,000 acres stretching south to the McClure Pass area from oil and gas development. However, more than 100,000 acres there have been leased. The coalition has sought to buy leases from companies, and U.S. Sen. Michael Bennet, D-Colo., has introduced legislation to withdraw unleased federal acreage in the area from leasing, and retire existing leased acreage in cases in which companies agree to sell leases or donated.

Zane Kessler, executive director of the coalition, called Encana’s decision to give up two leases “good news for the community” and the coalition.

As for the other two, “We would have loved to have worked with Encana. … We had an offer with Encana on the table.”

Said Hock, “We had no interest in developing these leases, however, they were of value to SG, so we were able to reach agreement with them. This allows us to potentially realize value from them even though we’re not pursuing development. The coalition’s offer was predicated on legislation being passed by Congress prohibiting further oil and gas development in the area — something over which we have no control.”

Hock said that the “terms of the lease assignment aren’t being disclosed.”

He said Encana is letting go of the other acreage because its geologists “did not find this acreage to be prospective” for oil and gas development.

Said Kessler, “With no leases currently producing natural gas in the Thompson Divide area there are a lot more areas that are more attractive than these federal leases here.”

However, SG and other companies continue to pursue means of keeping leases from expiring. The two it acquired from Encana both are set to expire later this year. SG has asked the Bureau of Land Management to suspend the leases, along with 16 others it proposes to combine into a lease unit, so they don’t expire. The coalition and others seeking to protect the Thompson Divide are opposing suspension requests there.


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