Ursa outlines natural gas well plans in Silt and Battlement Mesa areas through mid-2014
Citizen Telegram Editor
More than 30 natural gas wells were planned to be drilled or “worked over” in the Silt and Battlement Mesa areas through the middle of next year by Ursa Resources Group, company officials said at a Thursday, Sept. 26, community meeting in Rifle.
Ursa Piceance Holdings, a wholly-owned subsidiary of Ursa Resources Group, closed on its acquisition of Antero Resources’ Piceance Basin assets at the end of 2012.
“We started with the same contracts as Antero when we took over,” said Vice President of Business Development Don Simpson at the meeting in the Colorado River Fire Rescue station in Rifle. “But we replaced several of those contracts when they didn’t work to our standards.”
Ursa Resources Group is an exploration and production company backed by a private equity commitment from Denham Capital. As of January 2013, Ursa’s Piceance Basin operations consisted of approximately 260 producing wells, associated pipeline and equipment, and 60,000 net acres of leases. Much of its area activity is in the Silt and Battlement Mesa areas.
Simpson told a handful of people at the meeting that the company had finished 29 gas well “work overs,” meaning a drilling rig had returned to a previously-drilled well to try to boost its production.
“We’ve completed four wells (in Battlement Mesa) and plan to drill four new wells in the Silt area,” he said of the company’s operations plan for this year and the first half of 2014.
That plan calls for 33 wells to be either drilled or worked over, Simpson added. Ursa does not plan to drill any new wells on the north side of the Colorado River in the Silt area, although he said those plans could change, based on price and results in terms of gas production.
The company is operating one drilling rig, Simpson said, now in Battlement Mesa. It is called an Xtreme 15, or a “baby” rig, he said.
“That’s because it can operate between eight and 32 feet tall,” Simpson explained. “It’s mostly used in urban areas, but because we’re closer to residences in Battlement Mesa, we’ve used it there and have gotten good feedback.” Sound walls are also constructed around drill sites to help keep noise levels down and shield the site from view, he added.
Ursa, which is Latin for “the bear,” has hired six new staff members in its Rifle office this year, Simpson said. Ursa Resources Group has offices in Houston, Denver and Rifle, among others. The Rifle office has more employees than the Denver office, Simpson noted.
“We’re also working on a joint drilling program with WPX Energy,” he added.
But Simpson also described the natural gas market as “skinny, at best.”
“The economics are tough right now, so, like every operator, we look for better efficiencies,” Simpson said.
Completions Manager Derek “Pake” Younger noted recent gas transmission pipelines to markets in Chicago and the West Coast have made Piceance Basin gas more attractive.
Still, Simpson said gas companies have to balance their costs with the price of gas.
“We’re all using the best technology we can find to help us do that,” he added. “I know as an industry, we’re light years ahead of where we were just ten years ago.”
Younger said another challenge in the Piceance Basin is that when Williams Fork wells are fractured, “we get back 100 percent-plus” in produced water recovery.
“If a producer doesn’t figure out how to manage that water, they won’t make it here,” he noted.
Piceance Basin wells are low-risk, with no dry holes, Younger said.
“You know what you’re going to find,” he added. “That’s why you’ll probably always see drilling going on,” even when gas prices are low.
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