What is fracking?
Hydraulic fracturing (fracking) is a highly engineered process of injecting water, sand, and a small volume of other chemicals down a well and into the formation to increase the connection between the formation and the well. This allows faster production of hydrocarbons and a more efficient production process. After the injection is complete, the well is turned on, and most of the water that was injected is then produced back to the surface, collected, and disposed of. The sand remains inside the reservoir to keep the tiny cracks in the formation open to allow the oil and gas to flow into the well.
Who has approved permits for these wells?
(as of 11/1/2023) No permits have been applied for, no permits have been issued, and none are imminent. The total permitting process through Arapahoe County and COGCC is expected to take approximately two (2) years. The only submittal by Civitas is a Comprehensive Area Plan (CAP) application with COGCC. The application was submitted in late October 2022 but has not been officially deemed complete or accepted by COGCC. Once they consider the CAP application complete, they will begin their official review. Based on the length of time COGCC took to review a similarly-sized CAP in Aurora, it is expected to take over a year before any approval of the Lowry Ranch CAP could be granted.
Can I choose to not sign the mineral rights lease I have been given?
If you do not sign the lease, then you still control your minerals. You will receive an election form asking if you wish to participate as a Working Interest Owner in the wells. That means you would pay your proportionate share of the cost of drilling and participate in the profits. If you also do not sign that form, and the Operator has achieved 45% of the total minerals within the DSU, then they have the legal right to “force pool” your portion. If you are force pooled, then you become a Non-Consenting Working Interest Owner in the well. In that case, there are penalties to you, namely, that the Operator is allowed to recover 200% of their total cost in the drilling of the well before they begin paying you royalty. The royalty paid will be 16% instead of the 18% Civitas is currently offering, and finally, you would then be required to pay for your proportionate share of the costs of operating the well in the future.
If I sign the lease, am I liable for incidents or environmental damage?
You should look for and require language on indemnification in your lease, which will limit your liability or shift the liability to the Operator. If you have specific legal questions about this concept, you should speak with an attorney.
How many leases does Civitas need to move forward with the project?
Per state rules in C.R.S 34-60-116, an Operator must have a minimum of 45% of the total acres within a Drilling and Spacing Unit (DSU) in order to proceed with the applications to drill. The remaining 55% of the mineral interest can be “force pooled” if those mineral owners have not signed a lease by the time drilling is about to begin.
Does Civitas have 45% of the minerals within each DSU now?
Until leases are recorded with the County, only Civitas has the information to answer that question. However, they do have leases on the State minerals under Lowry Ranch. The DSUs include portions in Lowry Ranch and portions in Ward VI of Aurora. Due to this structure, it is possible that they already have the 45% needed.
Which communities are affected by the Lowry Ranch CAP project?
Tollgate Crossing, Sorrel Ranch, Pomeroy, Southlands, Forest Trace, Wheatlands, Beacon Point, Southshore, Tallyn’s Reach, Heritage Eagle Bend, Whispering Pines, Serenity Ridge, Blackstone Country Club, Butterfield Trails.
