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July 6, 2012
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BLM shrinks Willow Creek Unit gas drilling potential

THOMPSON DIVIDE, Colorado - Federal land managers have ruled that three gas leases in the Willow Creek Unit, part of the Thompson Divide area, have expired and cannot be drilled by WillSource Enterprise LLC of Denver.

The decision, which essentially shrinks the amount of land open to drilling by WillSource, came in response to a lawsuit filed by several environmental organizations, including the Wilderness Workshop of Carbondale.

In a letter dated June 22, BLM Senior Land Law Examiner Karen Toth informed WillSource that leases on more than 2,700 acres of Willow Creek land had expired on Nov. 11, 2009, and were being withdrawn from the Willow Creek Unit.

In addition, according to the Wilderness Workshop, another 3,800 acres or so in Willow Creek is no longer open to drilling.

"Dogged detective work by Wilderness Workshop staff attorney Peter Hart has saved 6,500 acres in the Thompson Divide from drilling," stated an alert emailed by the organization.

Reed Williams, president of WillSource Enterprise LLC, sees the matter somewhat differently.

"It's pretty confusing," he said of the decision.

He added that his company staff will be analyzing the documents prior to making a formal statement, and that he is puzzled by Wilderness Workshop's claim that 6,500 acres have been ruled ineligible for drilling.

"We had asked for interpretations on many of these issues," Williams continued, including exactly how much acreage remains open to drilling.

"We're not about to turn negative over it," he said. "We believe in the process and in the good will of all the stakeholders," including Wilderness Workshop.

Williams said his company plans to appeal the decision.

Notices of the decision were issued on June 22 by two different officials of the Denver office of the Bureau of Land Management (BLM), Toth and Jerome Strahan, chief of the Fluid Minerals Branch office.

The gas leases involved in the 8,600-acre Willow Creek Unit are not associated with drilling proposals by SG Interests of Texas, which are in an area known as the Lake Ridge Unit in another part of the 220,000-acre region known as Thompson Divide.

Wilderness Workshop and other organizations, including the Thompson Divide Coalition of Carbondale, have actively opposed drilling proposals in the area. Their opposition is based on a belief that the area's value for recreation, wildlife habitat, livestock grazing and clean water to area residents outweighs its value as a source of natural gas.

The Willow Creek Unit, which reportedly dates back a decade or so, consists of a number of leases lumped together at the request of the lease holder or holders.

WillSource, according to documents pertaining to the decision, took over the leases at Willow Creek in 2006.

Wilderness Workshop charged that the company did nothing with them beyond requesting periodic extensions for their lease rights from the BLM.

Hart, who conducted extensive research into the matter, argued that several of the leases technically had expired well before WillSource applied for the sixth such extension in 2009.

The BLM agreed, and the result of the decision, according to Toth's letter, is that the Willow Creek Unit has been "contracted" to an area comprising 440 acres.

All told, in terms of where drilling can now take place, more than 6,500 acres of land are now outside the Willow Creek Unit, Toth confirmed in a telephone interview with the Post Independent.

Toth said that this "contracted" unit corresponds to the original leasing area, which was owned by Delta Petroleum until it was sold to WillSource in 2006.

There is a producing well on the contracted area, Toth said, and WillSource can continue to drill in the remaining area within the unit.

jcolson@postindependent.com


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The Post Independent Updated Jul 6, 2012 12:22AM Published Jul 6, 2012 12:21AM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.