SM Energy has backed out of its deal to purchase mineral rights from Erie, the town announced late Wednesday afternoon, changing the course of a long-planned oil and gas project that created divisions within the community.
Attorneys representing the company informed the town of its decision earlier in the day, according to the Erie news release.
Erie Mayor Andrew Moore on Wednesday evening said SM Energy’s decision to walk away from the table left him “bummed.”
Moore has been a vocal proponent of the contentious mineral rights deal, which would have included $4.5 million in cash and 160 acres of land from SM Energy, as well as assurances from the company that it would plug and abandon 17 existing oil and gas wells within Erie over time.
“We’ve spent a year working through this. … Those were two huge benefits to the town,” he told the Daily Camera.
The Erie Town Council had narrowly voted in June to sell the town’s mineral rights, an agreement that would have allowed SM Energy to drill beneath portions of Erie from its planned Draco Pad just east of the town.
The Colorado Energy and Carbon Management Commission had approved a plan for the Draco Pad in March 2025, but before SM Energy could start drilling, the company needed to establish legal access to all the underground minerals included in the plan. Without the mineral rights deal, under , SM Energy will now have to redraw its drilling plan to avoid Erie’s mineral rights.
The end of the agreement follows a months-long back-and-forth over the deal.
In June, the mineral rights agreementput before the council failed, with council members split on the issue. One week later, the council to sell the town’s mineral rights to SM Energy. A month later, Erie residents who opposed the deal to put the issue up to voters, either on the November ballot or through a special election.
Moore said the referendum “certainly was the driver” behind SM Energy’s decision to pull out of the deal.
Many residents who opposed the SM Energy deal said that they did so out of concerns about how drilling might impact the community’s health and safety.
Others in the Erie community took issue with how the mineral rights deal came about, including more than one discussion held in executive session.
Erie resident Steve Drew is part of that second group. He said he isn’t necessarily against the mineral rights agreement itself, but rather the process. Drew said that SM Energy ditching the deal is “not a win” in his book.
“The reason the referendum was put together was to bring it to a vote so that Erie residents could demonstrate what they would like done with Erie’s mineral rights. The referendum was a vote against the process that was put together, the lack of transparency,” Drew said.
Erie will retain ownership of its mineral rights for the time being. The town is still evaluating the implications of the end of the agreement, according to the Wednesday release.
