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Hilcorp to start drilling in county

By: BOB STEPHENS
November 16, 2012
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A second company will begin drilling for oil in El Paso County next week, just after the state’s oil and gas lawmaking group approved stricter regulations in the county.

Hilcorp Energy Company, based in Houston, has two wells — Myers and State — east of Colorado Springs in unincorporated parts of the county.

Hilcorp hopes to drill both wells by end of the year and will start with Myers, according to senior assistant county attorney Diana May, who spoke with a Hilcorp executive Friday.

Hilcorp’s spokesman was reportedly traveling Friday and couldn’t be reached for comment.

May gave a presentation to the Colorado Oil and Gas Conservation Commission on Thursday before that board unanimously approved a memorandum of understanding with El Paso County.

“It’s a historical agreement, and gives us the strictest regulations in the state,” May said.

May said she was prepared for confrontation at the meeting but none transpired.

“I knew some oil producers in the state opposed the agreement and had reached out to COGA (Colorado Oil and Gas Association),” May said. “I was expecting a fight but they didn’t show up.”

The agreement between the oil and gas commission and El Paso County requires baseline testing of two water wells within a half-mile before drilling begins, and again a year later.

“We wanted groundwater testing to be mandatory, not just voluntary,” said county commissioner Sallie Clark. “I think we’d have gone to the mat if the state commission hadn’t voted the rules into place that we suggested.”

The state commission didn’t previously require groundwater testing. COGA, a trade association, suggests voluntary testing.

The state commission will likely pass stricter statewide regulations that will go into effect by spring 2013, May said. The agreeement with El Paso County will remain in place with additions to test water again five years after the first test, and to expand the radius to a mile if necessary to find a second test well.

“I think the agreement the county made with COGCC provided an impetus to the stricter regulations,” May said.

Ultra Resources, a Houston energy production and exploration company, was the first to drill in the county and has three wells — Brutus, Olive Oyl and Spinach — that are also east of town.

“We still don’t have any idea if they’ve found anything but they’re moving forward,” said county commission chairwoman Amy Lathen, who represents the eastern part of the county where drilling occurs. “They must have faith in the area.”

Lathen said she’s rooting for the oil companies.

“I hope they’re successful,” she said. “I’m adamantly supportive of domestic energy production. We just want to protect the groundwater in our area. The oil industry has said they have no problem with that and they agree with us.”

Contact Bob Stephens: 636-0276 Twitter @bobgstephens

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