An 18,000-acre tract of the Banning Lewis Ranch once slated for oil exploration is now for sale.
The land is owned by Houston-based Ultra Petroleum, which was exploring for oil within the unincorporated part of El Paso County. Ultra had three permits to drill within the county, but drilled only one well. It also had permits to drill within the city limits, but those permits were never used.
In March, Ultra announced it would abandon its plans for oil exploration within the county after initial tests showed oil was "too immature" for production and commercial use. Now, the company is selling the entire 18,000 acre of land it purchased in 2011, said Tom Wilson, drilling manager for Ultra Petroleum.
"It is up for sale in parts or as a whole," he said.
Wilson made the announcement Thursday at a bi-monthly meeting of oil and gas industry professionals, and state and county representatives. The meetings are held by Diana May, El Paso County's local government designee to the Colorado Oil and Gas Conservation Commission.
Ultra and a Houston-based competitor, Hilcorp Energy Co., were targeting the Niobrara formation about 4,500 feet below the earth's surface. Hilcorp had two permits to drill within El Paso County. It confirmed late last month that it also would abandon attempts to find oil in the county. Hilcorp representatives did not attend Thursday's meeting.
Ultra bought 18,000 acres of the 21,400-acre Banning Lewis Ranch property in October 2011 for $20 million from the federal bankruptcy court.
The property ended up under the direction of a federal judge after Banning Lewis Ranch Co. LLC and its subsidiary, Banning Lewis Ranch Development I & II LLC, filed for Chapter 11 protection in 2010. The companies cited more than $242 million in debt at the time.
The ranch stretches from Woodmen Road to Fontaine Boulevard between Marksheffel and Meridian roads. The city annexed the property in 1988, believing it would become the next great growth area. Previous developers estimated the area would include 75,000 housing units and 79 million square feet of commercial space. But the economic collapse in 2008 that lead to the Great Recession halted nearly all development in the area. Only about 300 homes were built.
In May, Denver-based Oakwood Homes paid more than $16 million for 2,600 acres in the northern portion of Banning Lewis Ranch, which could be the start of a large land grab now that Ultra has officially announced the sale of its property. Oakwood said its land could hold up to 9,000 households and 35,000 residents over the next 15 to 20 years.
But how many homes and what commercial developments end up in the area could depend on the city's 24-year-old annexation agreement that covers the entire property and includes two dozen smaller land owners along with Oakwood.
Some developers have suggested that the city should purchase the property as one parcel and plan the development.
Contact Ned Hunter: 636-0275.