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GLENWOOD SPRINGS, Colo. — A natural gas development company working along the Colorado River between Silt and Rifle is getting good marks on its report card after two years of drilling.
Denver-based Antero Resources was the new company on the block in March 2005 when it set up to drill on the south side of the river near Silt. Up until then drilling was concentrated farther south in the Divide Creek and Dry Hollow areas about 10 miles south of Silt and around Parachute.
Antero imported new, state-of-the-art drill rigs from Italy that had a smaller footprint than conventional rigs.
Since then, Antero has drilled 33 wells and figured out the limits of the gas in this section of the gas-rich geographical area called the Piceance Basin.
In addition, Antero also entered into a groundbreaking agreement with a group of local residents in Silt Mesa and Peach Valley to craft a community development plan. The nonbinding agreement calls for Antero to use quiet drilling rigs, no flaring of gas, mitigation of noise, protection of air quality and reports of their annual drilling plans.
So far, the plan has worked well, said Liz Lippett, who, with Christy Hamrick and Peggy Utesch, worked on developing the plan with Antero.
"I am very impressed with (Antero vice president) Terry (Dobkins) and (operations superintendent) Steve (Fontenot)," she said. "They have worked with us through thick and thin."
"We haven't really had any" (complaints) about Antero, Lippett said. "The plan so far has worked really well, but they haven't been drilling up on Silt Mesa."
While the plan was driven by fears that Antero would drill close to that dense residential area north of the town of Silt, Antero's efforts have remained focused on leases it holds along the Colorado River between Rifle and Silt.
The last community update was in December, when Antero outlined its drilling plans for 2007.
Antero's biggest challenge right now is drilling around existing and prospective gravel pits that are proliferating along the river, driven in large part for demands for gravel and concrete for oil and gas development.
This year, in another first for the oil and gas industry in Garfield County, Antero will drill a well north of the river and Highway 6, just east of Rifle. Although Dobkins said the prospects for economically viable production there are not promising.
"It's iffy the further north (we go), and the closer we get to the hogback there's less and less gas," he said.
Conventional wisdom in the industry says the bowl-shaped basin pinches out near the Grand Hogback that winds around the river valley north of Silt and heads due north of Rifle. There the gas lenses are smaller and less productive.
In addition, with the price of gas depressed at this time to about $7 per British Thermal Unit (BTU) - from a high last year of $15 per BTU - profit margins narrow considerably.
"Three dollars per BTU is definitely the kiss of death (for continued drilling)," Dobkins said. "For us its closer to $5. But I think they will only be there a short time and will go back up."
That's the nature of the oil and gas business and volatile gas market that is driven by supply and demand and the weather.
"The cold snap has taken gas from $5 to $7 (per BTU)," he said.
One dark cloud in Antero's relatively sunny prospects is the town of Silt and its concerns over a proposed gravel pit south of the river and just south of town.
Antero leases mineral rights on about 180 acres of land, owned by a consortium of local attorneys and contractors, that was recommended for approval for gravel mining by the Garfield County Planning and Zoning Commission this month.
Silt Mayor Dave Moore, while praising Antero as "good to work with," also expressed frustration that an attempt to negotiate with the gravel pit owners to annex the land into the town and turn it into a park when mining was complete, failed to reach agreement because Antero worried about another layer of regulation if the land became part of the town.
"They wanted to set up a (gas) compressor station and felt they couldn't work with the town," Moore said.
Silt's greater worry, however, is not gas drilling, but the impacts of truck traffic, from the several gravel pits in the neighborhood, that will be using Silt's roads through the Stillwater subdivision, next to the proposed gravel pit.
"Who's going to pay for those impacts?" Moore asked. Silt is currently in litigation with the county over maintenance of those roads.
Antero, despite the ups and downs of gas prices, is in for the long run.
"Antero is fortunate to have good funding behind it," Dobkins said. "We're just in here to stay."
Contact Donna Gray: 945-8515, ext. 16605
dgray@postindependent.com
Post Independent, Glenwood Springs Colorado CO
Denver-based Antero Resources was the new company on the block in March 2005 when it set up to drill on the south side of the river near Silt. Up until then drilling was concentrated farther south in the Divide Creek and Dry Hollow areas about 10 miles south of Silt and around Parachute.
Antero imported new, state-of-the-art drill rigs from Italy that had a smaller footprint than conventional rigs.
Since then, Antero has drilled 33 wells and figured out the limits of the gas in this section of the gas-rich geographical area called the Piceance Basin.
In addition, Antero also entered into a groundbreaking agreement with a group of local residents in Silt Mesa and Peach Valley to craft a community development plan. The nonbinding agreement calls for Antero to use quiet drilling rigs, no flaring of gas, mitigation of noise, protection of air quality and reports of their annual drilling plans.
So far, the plan has worked well, said Liz Lippett, who, with Christy Hamrick and Peggy Utesch, worked on developing the plan with Antero.
"I am very impressed with (Antero vice president) Terry (Dobkins) and (operations superintendent) Steve (Fontenot)," she said. "They have worked with us through thick and thin."
"We haven't really had any" (complaints) about Antero, Lippett said. "The plan so far has worked really well, but they haven't been drilling up on Silt Mesa."
While the plan was driven by fears that Antero would drill close to that dense residential area north of the town of Silt, Antero's efforts have remained focused on leases it holds along the Colorado River between Rifle and Silt.
The last community update was in December, when Antero outlined its drilling plans for 2007.
Antero's biggest challenge right now is drilling around existing and prospective gravel pits that are proliferating along the river, driven in large part for demands for gravel and concrete for oil and gas development.
This year, in another first for the oil and gas industry in Garfield County, Antero will drill a well north of the river and Highway 6, just east of Rifle. Although Dobkins said the prospects for economically viable production there are not promising.
"It's iffy the further north (we go), and the closer we get to the hogback there's less and less gas," he said.
Conventional wisdom in the industry says the bowl-shaped basin pinches out near the Grand Hogback that winds around the river valley north of Silt and heads due north of Rifle. There the gas lenses are smaller and less productive.
In addition, with the price of gas depressed at this time to about $7 per British Thermal Unit (BTU) - from a high last year of $15 per BTU - profit margins narrow considerably.
"Three dollars per BTU is definitely the kiss of death (for continued drilling)," Dobkins said. "For us its closer to $5. But I think they will only be there a short time and will go back up."
That's the nature of the oil and gas business and volatile gas market that is driven by supply and demand and the weather.
"The cold snap has taken gas from $5 to $7 (per BTU)," he said.
One dark cloud in Antero's relatively sunny prospects is the town of Silt and its concerns over a proposed gravel pit south of the river and just south of town.
Antero leases mineral rights on about 180 acres of land, owned by a consortium of local attorneys and contractors, that was recommended for approval for gravel mining by the Garfield County Planning and Zoning Commission this month.
Silt Mayor Dave Moore, while praising Antero as "good to work with," also expressed frustration that an attempt to negotiate with the gravel pit owners to annex the land into the town and turn it into a park when mining was complete, failed to reach agreement because Antero worried about another layer of regulation if the land became part of the town.
"They wanted to set up a (gas) compressor station and felt they couldn't work with the town," Moore said.
Silt's greater worry, however, is not gas drilling, but the impacts of truck traffic, from the several gravel pits in the neighborhood, that will be using Silt's roads through the Stillwater subdivision, next to the proposed gravel pit.
"Who's going to pay for those impacts?" Moore asked. Silt is currently in litigation with the county over maintenance of those roads.
Antero, despite the ups and downs of gas prices, is in for the long run.
"Antero is fortunate to have good funding behind it," Dobkins said. "We're just in here to stay."
Contact Donna Gray: 945-8515, ext. 16605
dgray@postindependent.com
Post Independent, Glenwood Springs Colorado CO
