Erie residents have asked the state to step in on a potential sale of town-owned assets to an oil and gas operator for the Draco Pad project, after questions about the deal’s process have continued. The Erie Town Council could make a decision about whether to proceed with the transaction at its Tuesday meeting.
The drilling area for Draco, already approved by the Colorado Energy & Carbon Management Commission in March 2025, is proposed to sit northwest of the Garfield Road and County Road 7 intersection.
Draco is designed to include 26 wells, drilled from a pad in unincorporated Weld County extending over 7,000 feet underground before turning horizontally and running west for more than 4 miles, beneath portions of Erie and unincorporated Boulder County.
A letter signed by over 100 Erie residents, according to the letter, and addressed to Colorado Attorney General Phil Weiser, called the pending deal a “legal and ethical matter where there is no recourse for these issues at the Town level.”
“We are reaching out to you for State assistance to investigate and hopefully resolve these matters on behalf of residents of the Town of Erie,” the letter, dated June 11, adds.
After the Daily Camera reached out with questions about the letter, Lawrence Pacheco, with the state Attorney General’s Office, did not offer specific comments.
Under the agreement tentatively reached earlier this month, Erie would exchange about 180 acres of its unleased mineral rights within the roughly 4,000-acre underground drilling area approved for the Draco Pad. In return, Erie would receive three parcels owned by what the town called an SM Energy “subsidiary” totaling about 160 acres on County Line Road, a $4.5 million cash payment and 2% of production revenue for the lifespan of the Draco project. The town estimated that revenue share could exceed $17 million over the next 20 years or more.
Mineral rights allow their owners to access and extract underground resources or lease and sell that access.
Civitas Resources — which recently merged with SM Energy Company — expressed interest in mineral rights owned by the town near its planned Draco well pad.
But in open meetings and during a council study session on June 2, residents and some Town Council members raised concerns about the process of the mineral rights negotiations — including the hiring of Alameda Mineral Advisors founder Matthew Owens, whose LinkedIn profile identifies him as a former chief operating officer at Civitas.
The Town Council voted 4-3 in December to hire Alameda to evaluate Erie’s mineral assets and conduct a bidding process. Under the contract approved by the council, Alameda would receive 7.5% of the total value of any completed deal, capped at $4.5 million.
‘There is no requirement’
A moment of tension emerged during the discussion in a June 2 council meeting, when some council members questioned both the town’s hiring of Alameda Mineral Advisors and the process used to negotiate the proposed agreement.
Councilmember Dan Hoback questioned whether Alameda adequately tested the market before narrowing in on a Civitas deal.
“It does not sound like we did a competitive bidding process,” Hoback said. “That’s the only way to determine whether we have fair value for the sale.”
Councilmember Emily Baer raised a similar concern.
“I’ve never heard of another offer from any other entity,” Baer said.
The residents’ letter to Weiser said “important and legal steps were not completed in this process including: 1. The Town Council signed a Consultant contract involving a bid and solicitation process that was ignored in favor of a single-source agreement with SM Energy; and 2. Town of Erie policy required the issuance of an (request-for-proposals) to select the Consultant in a $4.5 million contract and, instead, the Consultant was sole-sourced …“
Asked about that part of the letter, Pacheco, with the AG’s office, told the Camera: “The Colorado Department of Law cannot confirm or otherwise comment on the complaint you mentioned in your email.”
Apart from the competitive bid topic, during the June 2 discussion, Town Attorney Breena Meng said the town did not follow its purchasing policy when Alameda was hired.
“There is no requirement in either the town charter or the town code” to issue a formal request-for-proposals process, Meng said. However, she said the town’s purchasing policy calls for a solicitation process for services like those Alameda has provided, and “that did not happen.”
Acting Town Manager Meredyth Muth said the town has since begun implementing a change intended to prevent similar issues in the future.
“In the last couple of months since we found that this was done not in accordance with our purchasing policy, the town is putting in procedures with the finance department so something like this wouldn’t happen again,” Muth said.
‘Alameda is uniquely positioned’
In early June, Owens sent the Daily Camera a document he said he prepared “to try to capture most of the questions I have heard asked by the public in various public meetings.” In that document, he addresses his hiring by the town.
“Alameda Mineral Advisors is headed by a former Civitas (now owned by SM Energy) oil & gas executive who went from negotiating with landowners on behalf of the companies he represented in their efforts to acquire properties for oil & gas development to switching sides and now representing landowners in their negotiations with oil & gas companies,” the document says.
“As a result, Alameda is uniquely positioned to (know) exactly how oil & gas companies operate internally and what they value the most. Alameda also knows what oil & gas companies are willing to do,” the document says. “And it knows all the participants beyond oil & gas companies which are interested in acquiring mineral rights and which often will pay more for those rights than oil & gas operating companies themselves.”
The letter to the state attorney general says residents “are clearly against this decision and have been showing up and speaking out in large numbers since learning about it.”
This story may be updated with more information.