Erie officials will hear comments from the community during a Tuesday special meeting about a “potential sale” of town-owned mineral rights tied to the planned Draco well pad.

Official discussions about a potential mineral rights deal have so far taken place out of public view, drawing criticism from some in the Erie community who say the process has lacked transparency.

Civitas Resources — the operator behind Draco which recently merged with SM Energy Company — has expressed interest in acquiring mineral rights owned by the town. Mineral rights give their owner the legal ability to access and extract underground resources such as oil and gas, or to lease or sell that access.

In this case, Erie has mineral rights that fall within the planned drilling boundary for the Draco project.

Erie leaders in December hired an adviser to evaluate the town’s mineral assets and solicit a potential deal. The Erie Town Council’s ensuing discussion has taken place in executive session, a type of private meeting often held for legal matters.

The special meeting on Tuesday is slated for 6-10 p.m. at the Erie Town Hall at 645 Holbrook St., where a staff presentation — published Friday to the town’s website — is expected to precede public comment. Public comment will be non-interactive with the Town Council, and no council vote will be taken at the meeting, according to the town’s announcement.

State in the mix

Details about mineral rights negotiation remain undisclosed due to limits on what the town can legally share, according to Erie spokesperson Gabi Rae, and a state law that took effect in January 2025 has added another layer of uncertainty.

Senate Bill 24-185 prohibits local government-owned minerals from being “force pooled” by oil and gas developers. Force pooling allows an operator to seek approval from the Colorado Energy and Carbon Management Commission to combine mineral interests within a planned drilling area.

Under the law, a local government can reject lease offers, and the commission can’t force them into pooling.

“This may be the first time the new law is played out,” Rae told the Daily Camera.

“My understanding — not speaking on behalf of the town or our attorneys — is that if we decline to sell the mineral rights, the (company) would have to provide proof of how they would go around the town’s minerals in the course of their drilling operations,” Rae said in an email. “I have no idea how that would be proven or checked.”

The state ECMC approved an Oil & Gas Development Plan for the Draco pad in March 2025 following concerns from the town of Erie and residents. That approval included conditions requiring Civitas Resources to conduct continuous air quality monitoring, and a traffic study effort, to address construction impacts. According to Civitas Resources’ website, the project is scheduled to begin “pad construction” this year, including the installation of sound walls to minimize impacts to nearby areas.

But if the project relies on access to Erie’s mineral rights, and the town declines to lease or sell them, the application may need to be revised and resubmitted for review by the state. Civitas Resources did not respond to the Camera’s requests for comment, including a question about whether the current Draco plan depends on access to Erie’s mineral rights.

An approved oil and gas development plan only permits the surface area of a proposed drilling location, said John Brown, an ECMC spokesperson. Operators then have up to three years to finalize well locations and secure agreements with mineral rights owners.

“The (development plan) is one stage gate in multiple steps toward final approval for drilling,” Brown told the Camera in an email.

Once those details are finalized, operators must return to the state commission for additional approvals before drilling can begin, added Brown, who said he could not comment on the Draco application specifically, because “there are ongoing proceedings related to” the project.

‘They have to make that evaluation’

The Camera asked the ECMC whether, to its knowledge, any Colorado jurisdiction has used the state law to refuse force pooling of its mineral rights and, if so, how that played out.

Brown responded, in part: “To date, the Commission has not denied an application due to a local government declining to be part of a pooling agreement.”

“If a local government declines to be part of a drilling unit, the operator has the option to amend their Oil & Gas Development Plan (OGDP) to exclude those minerals rights from the drilling unit,” Brown said. “As with any drilling application, the OGDP review process must demonstrate full compliance to Colorado law and ECMC regulations to gain approval. This includes technical and environmental assessments and operational monitoring to ensure well integrity so that only intended minerals are extracted from the drilling unit.”

Brown added that the commission does not take part in lease negotiations, which occur between operators and mineral rights owners before a project reaches a state hearing.

Whether a project should move forward ultimately depends on the operator, Brown said.

“That determination is really on their side — whether the project is still feasible to move forward financially, environmentally or technically when those things change,” Brown said. “They have to make that evaluation.”