After a potential deal with oil and gas operator SM Energy to hand over underground, town-owned mineral rights in the drilling area for the company’s planned Draco Pad project failed on a split 3-3 vote of the Erie Town Council, the council is now set to reconsider the proposed deal June 23.

The council will take comments from the public and potentially hold a new vote during the meeting, according to a town news release Saturday morning.

The potential for the reversal of Erie’s decision comes after a council member who had voted against the deal asked that town leaders reconsider.

“According to the Town Council’s adopted Rules of Order and Procedure (Section 7.4(f)) any Council Member who voted on the prevailing side of an issue may call to have reconsideration of that item at the next Regular or Special Meeting,” the town’s news release said. “Council Member Brian O’Connor has asked for Ordinance No. 028-2026 on the sale of mineral rights to be reconsidered at the Council’s Regular Meeting.”

The meeting is slated for Tuesday evening. Town leaders are set to consider the exact agreement and contract from the previous week, according to town spokesperson Gabi Rae.

Details of Draco and deal

A plan for the Draco Pad was approved in March 2025 by the Colorado Energy & Carbon Management Commission, designed to include 26 wells drilled from a pad in unincorporated Weld County, before extending over 7,000 feet underground, turning horizontally and running west for more than 4 miles beneath portions of Erie and unincorporated Boulder County.

The drilling area for Draco is proposed to sit northwest of the Garfield Road and County Road 7 intersection.

But before drilling can begin, SM Energy must demonstrate it has access to the underground mineral resources included within the approved plan to secure a drilling permit from the commission.

The town has said it was first approached in 2025 by Civitas Resources — which earlier this year merged with SM Energy Company — about acquiring Erie’s mineral rights within the proposed drilling area for Draco. Mineral rights allow their owners to access and extract underground resources or lease and sell that access.

If the potential deal goes forward, SM Energy would acquire an amount of the town’s unleased mineral rights within Draco’s roughly 4,000-acre planned drilling area. The town has said the amount is about 180 acres of the town’s rights.

In return, Erie could receive more than $21 million in combined cash and future revenue, including a $4.5 million cash payment and 3% of production revenue for the life of the Draco project; Erie officials had estimated that revenue share could exceed $17 million over the next 20 years or more, according to earlier town information.

The deal would also see Erie take ownership of three parcels of land totaling about 160 acres on County Line Road, according to earlier town information.

Whether Erie OKs the proposed deal or not, Draco is expected to still move forward. But the failure of the potential deal to win a council vote would mean the project has to adjust its drilling plan to avoid the town’s minerals, according to a town news release Tuesday night this week.

‘Does not come as a great surprise’
That night, the council took a 3-3 vote, with Erie Mayor Andrew Moore, Mayor Pro Tem Brandon Bell and Councilmember John Mortellaro voting in favor of the agreement.

Councilmembers Emily Baer, Brian O’Connor and Anil Pesaramelli voted against, while Councilmember Dan Hoback was absent from Tuesday night’s meeting for, he said, a family obligation.

In a statement to the Daily Camera about the motion to reconsider the council’s decision, Hoback said: “While disappointing, it does not come as a great surprise. The … process to this point has been conducted under a dark shadow of misinformation, deception and secrecy. Town residents deserve better.”

The Camera has reached out to O’Connor for comment about the move to reconsider.

The potential deal is a highly watched issue in Erie. Residents have asked the state to step in on the potential sale, after questions about the deal’s process have continued.

A letter signed by over 100 Erie residents, according to the letter, and addressed to Colorado Attorney General Phil Weiser, said the situation is 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 Camera reached out with questions about the letter, Lawrence Pacheco, with the state Attorney General’s Office, did not offer specific comments.

This story may be updated with more details.