Mustang Creek Holdings received state permits last week to perform exploratory oil drilling in El Paso County, and hopes to begin work by the middle of the fourth quarter.
But the company must first get drilling permits from El Paso County before it sinks its exploratory well just south of the intersection of Judge Orr and North Davenport roads.
Mustang Creek officials met on Aug. 28 with Craig Dossey, project manager for Development Services Division in El Paso County, to discuss and better understand the local permitting process, said Bob Davis, vice president of land for NexGen Oil & Gas. NexGen, based in Denver, is the parent company of Mustang Creek.
Davis expects his company to submit local permitting applications before the month's end.
"We will meet with the permit agents of our company (Tuesday)," he said, "and work though the process and then submit."
Obtaining the local permits is an administrative procedure, meaning the permits do not have to be approved by the county commission.
The company performed seismic mapping earlier this year on about six-square miles of northeastern El Paso County near Judge Orr Road and into Elbert County to determine where to place its first two wells. The company has not yet received permission to drill in Elbert County, but it plans to put its second well on a private ranch about two miles to the northeast of its proposed El Paso County well location, Davis said.
NexGen Oil & Gas would be the third petroleum company to drill an exploratory well in El Paso County. Ultra Resources and Hilcorp Energy, both Houston-based companies, each drilled at least one well in the county last year, but decided to halt all exploratory work in El Paso County after testing showed the oil was unsuitable for commercial use.
Davis said Mustang Creek plans on drilling much deeper than the two Houston-based companies. Mustang Creek is targeting the geological areas known as the Pennsylvania and Mississippian, which are at about 9,000 to 11,000 feet below the earth's surface, Davis said. He said his company plans on drilling vertical wells only at this time and would fracture those wells only "if test results warrant it."
Contact Ned Hunter: 636-0275.