In a reversal of its earlier decision, the Erie Town Council on a 4-3 vote has decided to sell mineral rights to oil and gas operator SM Energy Company, sending forward a contentious deal that could bring the town over $23 million in combined cash and future revenue, according to the town, along with land transfers and closures of existing wells.
Under the agreement, SM Energy — the operator of the planned Draco Pad oil and gas project — will receive certain town-owned mineral rights within the projectap underground drilling area.
Mineral rights allow their owners to access and extract underground resources or lease and sell that access.
Tuesday night’s vote comes just one week after Erie residents thought the monthslong saga surrounding a mineral rights deal to be over. During a June 16 meeting, the potential agreement on a split 3-3 Town Council vote.
“We were informed of this on a Saturday, one business day before the revote. Last week, we heard all these people speak up against this deal,” said Erie resident Larisza Krista, who opposed the deal, addressing the Town Council on Tuesday.
The mineral rights item came back to the table after Councilmember Brian O’Connor, who had voted against the deal June 16,
According to the town’s rules, any council member who voted “on the prevailing side of an issue may call to have reconsideration of that item at the next Regular or Special Meeting,” a Saturday news release from the town said.
Mayor Andrew Moore, Mayor Pro Tem Brandon Bell and Councilmember John Mortellaro on Tuesday evening voted in favor of the agreement. O’Connor flipped his vote from last week to join them.
At the meeting, O’Connor said he changed course because he learned after the meeting on June 16 that a number of residents who wanted to speak did not because they felt “intimidated,” he said, and the council received “numerous” emails requesting a reconsideration.
“This also allowed other residents to become aware of the agreement,” O’Connor added.
Councilmembers Emily Baer and Anil Pesaramelli voted for the second time against the agreement. Councilmember Dan Hoback, who was absent from last week’s vote, also voted against.
“This is not what our community wants. … This is not in alignment with our values,” Baer said prior to the vote, and Pesaramelli said his vote was, in part, about “transparency” for residents.
The Draco project has been expected to move forward regardless of Erie’s decision to sell its mineral rights, according to the town.
“The drilling will happen, whether we do something or not,” Moore said.
How Erie got here
Despite objections from the Erie community, a plan from Civitas Resources for the Draco oil and gas project was approved in March 2025 by the Colorado Energy & Carbon Management Commission, designed to include 26 wells drilled from a pad in unincorporated Weld County, before extending over 7,000 feet underground, turning horizontally and running west for more than 4 miles beneath portions of Erie and unincorporated Boulder County.
To begin drilling, an operator must demonstrate it has access to the underground mineral resources included within an approved plan, and secure a drilling permit from the state commission.
Erie officials have said the town was first approached in 2025 by Civitas — which earlier this year merged with SM Energy — about acquiring town-owned mineral rights that exist within the broader area of the Draco Pad project.
Under the agreement approved Tuesday, SM Energy would take ownership of Erie mineral rights, or a small percentage of the total drilling area approved as part of the Draco plan.
In return, Erie is expected to receive more than $23 million in combined cash and future revenue, including a $4.5 million cash payment and 3% of production revenue for the life of the Draco project. Erie officials estimate that revenue share could exceed $19 million over the next 20 years or more, according to town spokesperson Gabi Rae.
(Rae said that estimated production revenue went up when the town’s potential share changed from 2% to 3% “the day or two before” the June 16 meeting, in an amended version of the agreement.)
Erie would also receive three parcels totaling about 160 acres on County Line Road, estimated to be worth roughly $14 million, and the deal would require SM Energy to perform plugging and abandonment operations for 17 wells.
O’Connor said the biggest factors for him in ultimately supporting the deal are the plugging of the wells and a provision that Erie can conduct onsite inspections at the Draco site, while Moore called the land acquisitions “the goose that lays the golden eggs.”
Numbers float around deal
Matt Owens — the consultant Erie contracted for the town’s negotiations with SM Energy — has claimed that the deal could bring the town much more than the two-digit-million numbers, saying in a statement that it contained “up to $465 million in financial benefits.”
Owens has also called the potential deal “the most lucrative oil and gas mineral rights transaction that has ever occurred in Colorado. … over 10,000% greater than standard mineral rights transactions in this area in terms of value received per acre.”
He did not respond to the Daily Camera’s questions about specific supporting information for those statements.
When asked whether the town agrees with Owens’ estimate of $465 million, Rae told the Camera: “That number is based on a lot of assumptions about a future that … is not certain. If we do get the parcels of land, we would then begin environmental assessments and other feasibility studies that would tell us a lot more about what is possible there, and what the potential revenues could be.
“At this point, the number is not something we would use as an accurate estimation for budgeting,” Rae added.
Responding to Owens’ LinkedIn post, multiple council members have disputed its accuracy, with O’Connor on Tuesday calling his estimates “exaggerated.”
Hoback told the Camera on Saturday the post included “grossly inflated numbers of projected benefits for the town.”
Residents opposed to the deal said the post created more confusion. One speaker told the council the post was “inappropriate and inflammatory.”
“The lack of accessible public information around this deal has left the people of Erie vulnerable to the influence of anyone who can claim insider information or insight into this deal,” resident Emily Brecht told the council on Tuesday.
Residents speak on deal
For months, the potential mineral rights deal has been a in Erie.
Residents who spoke in support of the SM Energy agreement Tuesday night touted the benefits for the town, with one resident, Ronda Grassi on Tuesday saying: “The town can get nothing or the town can get something” from the already-approved Draco project.
“We have a good deal and it makes sense. I’ve heard some people say we don’t need the money. Where are we going to get it from? Taxpayers? We have the opportunity to get money from this deal, land from it,” another resident added.
Andrew Sawusch, a former town council member and supporter of the SM Energy agreement, in his comments to council said there has only been “one voice heard from residents to date,” because there are Erie residents who are “consistently afraid to come forward to voice their opinions.”
“The browbeating that we all witness on social media and in public has moved some to become mere onlookers — afraid to speak our minds — especially when the topic of oil and gas is involved,” Sawusch added.
Across meetings about the topic, the majority of residents who have addressed the council during opportunities to make comments have been opposed to a deal. More came to the lectern on Tuesday evening in support than in previous meetings. That night, over twice as many spoke against it. Some voiced concerns about property values, the environment and public health impacts.
For others, the issue is less about the content of the mineral rights deal and more about the process that brought it forward — which has included multiple discussions in executive session, a type of meeting closed to the public.
“I think, in general, the benefits of the agreement have been overshadowed,” one resident told the council.
A letter signed by over 200 Erie residents, according to the letter, and addressed to the Town Council this week said the negotiating process “has undermined public trust.”
“Negotiating a deal of this magnitude largely in private executive sessions, retaining (a consultant) with … industry ties, and rushing a re-vote within seven days of a failed motion — all of this erodes the public’s confidence that this process is being conducted in their interest,” the letter adds.
Over one hundred dated June 11 asked the state’s attorney general to step in, with concern that the town broke its own policy by selecting Alameda Mineral Advisors to represent Erie without initiating a request for proposals process.
According to a contract with the town, Alameda would only be paid if a deal is completed, receiving 7.5% of the total value, capped at $4.5 million.
Addressing concern that he was once the chief operating officer for Civitas, Owens this month told the Camera there is “no basis for anyone to complain about a (conflict of interest) because what I am doing benefits Erie. And I do not get compensated unless Erie does so our interests are in lockstep.”
Town Attorney Breena Meng said during a June 2 meeting that the town’s purchasing policy calls for a solicitation process for services like those Alameda has provided, and “that did not happen.”
But Meng on Tuesday night said she is not aware of any laws broken by the town, and that it hasn’t been contacted by the state attorney general’s office.
Acting Town Manager Meredyth Muth said on Tuesday that the town did not go through its proper purchasing policy process in hiring Owens. She said independent auditors that deal with the town’s finances “are aware of the error we made.”
“We are doing everything internally to make sure those processes are followed properly going forward,” Muth added.
