ConocoPhillips will begin oil exploration in four metro-area counties in what an industry expert characterized as a major step in development of the oil-rich Niobrara formation under Colorado’s plains.
Most of the 46,000 acres to be explored are adjacent to the north and east boundaries of the old Lowry bombing range in Arapahoe County.
“It is a big deal,” said Marilee Utter, president of Denver-based Citiventure Associates.
Utter, a consultant to the Colorado Land Board, is developing a leasing plan so thousands of acres of the former bombing range owned by the board can be auctioned off for Niobrara exploration.
ConocoPhillips said it will begin oil exploration in Arapahoe, Adams, Elbert and Douglas counties “as soon as possible” as a result of an agreement to acquire leases from Lario Oil & Gas Co. Mike O’Shaughn- essy, president and chief executive of Lario, said 90 percent of the land is in Arapahoe County near the old bombing range. Not all of the acreage is contiguous. Terms of the transaction were not disclosed.
Utter said the acquisition is very important because it means serious exploration of the Niobrara is heading south from Weld County, where the majority of exploration has taken place. In addition, the size of the acreage is impressive, she said.
“It is a big parcel. It gives (ConocoPhillips) more flexibility. Picking up big chunks is valuable. It gives them control,” Utter said.
Rod Bockenfeld, chairman of the Arapahoe County Commissioners whose district includes the land, said Arapahoe is “looking at the impacts and how to manage those impacts.”
He noted that enforcement is left to the Colorado Oil and Gas Conservation Commission. But because the commission doesn’t have many inspectors, Arapahoe County is considering hiring its own inspectors. They would report violations to the state commission.
Bockenfeld said Arapahoe County is looking “very closely” at impacts from noise, odor and water use. Of particular interest, he said, is how exploration affects aquifers.
Dave Neslin, director of the Colorado Oil and Gas Conservation Commission, said the announcement is “good news for the state. It indicates growing interest in the development of resources which provide significant economic and energy benefits.”
“That said, we are still in an investigative stage,” Neslin said. He noted that a critical element is whether ConocoPhillips can profitably produce the resources it finds.
The Niobrara formation is 6,000 to 8,000 feet below the surface, stretching along the Front Range from Wyoming to New Mexico.
