{"id":276266,"date":"2026-09-01T04:48:11","date_gmt":"2026-09-01T04:48:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/276266\/"},"modified":"2026-09-01T04:48:11","modified_gmt":"2026-09-01T04:48:11","slug":"mineral-rights-deal-repealed-as-eries-unleased-minerals-force-draco-redesign","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/276266\/","title":{"rendered":"Mineral-Rights Deal Repealed as Erie’s Unleased Minerals Force Draco Redesign"},"content":{"rendered":"

Three days after the Erie Town Council formally repealed its controversial mineral-rights sale<\/a> to SM Energy, the town received a new offer from the company to obtain the same minerals \u2014 this time through a lease. At nearly the same time, SM Energy\u2019s subsidiary was moving ahead with a revised Draco drilling plan designed to exclude the town\u2019s unleased mineral interests.\n<\/p>\n

The developments came in a rapid series of filings after SM Energy notified Erie Aug. 19 that it was terminating the agreement<\/a> to buy the minerals. On Aug. 25<\/a>, the council repealed the ordinance authorizing the sale, ending the referendum<\/a> process that residents had launched to challenge it. Town staff said the repeal also cleared the way for Erie to participate as an affected party in upcoming proceedings before the Colorado Energy and Carbon Management Commission.\n<\/p>\n

\"\"<\/p>\n

The amended\/proposed Draco Drilling and Spacing Unit (DSU)<\/p>\n

Then came a twist. Extraction Oil & Gas, an SM Energy subsidiary, dated a new lease offer Aug. 25 for the same municipal minerals. Erie did not receive the offer until Aug. 28, when it was already set to expire that same day. The town told Extraction that council approval was required and could not be obtained in time, and the offer expired without council consideration.\n<\/p>\n

The proposed lease covered 112.97 net mineral acres in sections 22, 23 and 24 of Township 1 North, Range 69 West. Extraction offered Erie $12,000 per net mineral acre, for a total bonus of $1,355,640, and a 20% landowner royalty. The proposed primary term was three years, with an option to extend for two additional years.\n<\/p>\n

Even though the offer expired and was not approved, Town Council has a study session, Sept 1<\/a> to discuss the procedure for leasing mineral rights moving forward. Staff is asking council for direction on how to handle any future offers, including whether to bring every offer to council, establish parameters for negotiations, reject all offers, or pursue another policy direction. Discussion item<\/a> submitted by Breena Meng, Town Attorney, Meredyth Muth, Acting Town Manager, David Frank, Director of Environmental Services.\u00a0\n<\/p>\n

Extraction had other plans to avoid Erie minerals, including a different version of Draco<\/a>.\n<\/p>\n

\"\"<\/p>\n

The original Draco Drilling and Spacing Unit (DSU)<\/p>\n

In an Aug. 28 application to the ECMC (Docket number 260800225<\/a>), Extraction asked the commission to get rid of the original drilling and spacing unit and replace it with two new drilling areas with the same 26 wells, one to the east of the pad and one to the south, under the Front Range Landfill.\n<\/p>\n

Extraction\u2019s filing explains that Erie\u2019s unleased mineral rights forced the change. Because state law<\/a> prevents the commission from forcing a local government to participate in pooling without a lease, Extraction said it had to redraw<\/a> the Draco drilling unit to exclude Erie\u2019s unleased minerals.\n<\/p>\n

\u201cAs a result, Extraction has determined that amendment of the Draco DSU is necessary to exclude the unleased local government owned mineral interests,\u201d the filing states.\n<\/p>\n

The change does not reduce the number of wells, but does reduce the drilling under Erie. Extraction is still seeking approval for 26 horizontal wells from the existing Draco Pad, but it wants to redraw the underground drilling units around the minerals Erie retained. The original area included 4,446 buildings, mostly residential; the reduced footprint<\/a> is 3,069 buildings.\n<\/p>\n

The Town\u2019s Sept. 1 study session materials state that because Erie retained its mineral rights, the Town is able to participate as a \u201cparty of interest\u201d in upcoming ECMC hearings on the Draco Pad drilling and spacing units to ensure its unleased mineral rights are not force pooled. Because Extraction withdrew its previous application and submitted an amended application, Erie will need to submit a new petition to participate in the new proceeding.\n<\/p>\n

The council\u2019s Aug. 25 vote ended the referendum by repealing the ordinance, eliminating the need to send the issue to voters.\u00a0\n<\/p>\n

Residents urged the town to take a more active role in the Draco proceedings moving forward. Public comments raised concerns about the project\u2019s health and safety impacts, the future of the 17 existing wells near town, and the extent of the town\u2019s remaining mineral interests.\n<\/p>\n

Councilmember Dan Hoback said the community had demonstrated its commitment to the referendum process and that the council should keep looking for ways to address the legacy wells. \u201cI would like to see us do as much as we can to pursue our claims within the Draco Pad area before the ECMC,\u201d Hoback said. \u201cI do not know what all that entails. I will leave that to the experts and the legal team.\u201d\n<\/p>\n

The Aug. 25 meeting also reopened disagreements over how the original Alameda Mineral Advisors contract<\/a> came together and how the town handled public criticism of the deal.\n<\/p>\n

Moore pushed back on accusations that he and others had privately negotiated with Alameda Minerals. He said he first met Matt Owens, the company\u2019s representative, during an executive session in January when the council selected Alameda as its consultant. Moore said that after Owens\u2019 public statements about the proposed mineral agreement, he emailed the town attorney because he was concerned about what had been published.\n<\/p>\n

Later in the meeting, Baer offered a different recollection of how Owens came to the town. \u201cMy memory is, and I\u2019ve triple checked my memory with others, is that you brought the contact forward, said, \u2018I talked to Matt Owens. I\u2019ll give you his number. We should do business with him,\u2019 and instructed staff to do that,\u201d Baer said. \u201cSo, I think that\u2019s where we got off course.\u201d\n<\/p>\n

A separate audit presented that night<\/a> found a significant deficiency involving the town\u2019s sole-source selection of Erie\u2019s contract with Alameda Mineral Advisors. The outside auditor characterizes it as a town policy violation. Town Finance Director Sara Hancock says the missing piece was documentation of the approval for the sole-source procurement.\n<\/p>\n

For months, one of the central arguments around the mineral-rights deal was that Draco would proceed whether Erie agreed to a deal or not<\/a>. That remains broadly true: Extraction is still seeking authorization for 26 wells from the Draco Pad.\n<\/p>\n

However, Extraction\u2019s own application says Erie\u2019s unleased local-government interests are preventing the company from proceeding as planned and forcing them to redraw the drilling paths. This is completely contradictory to the past position of many members of town council, including Mayor Moore, who claimed that Erie could not make a meaningful impact on the Draco Pad, and could choose to \u201cget something or get nothing.\u201d\n<\/p>\n

In a CBS Colorado report<\/a>, Moore said, \u201cWe will see what the drilling plan is. Perhaps there might be significantly less drilling that might happen in Erie.\u201d The new ECMC filing still calls for 26 wells, although it changes the configuration of the units beneath the Draco Pad.\n<\/p>\n

Moore acknowledged during the Aug. 25 meeting that the town cannot simply make Draco disappear and said he wanted a future council discussion focused entirely on oil and gas and what Erie can do going forward. \u201c\n<\/p>\n

Emily Brecht, a referendum petition representative who addressed council that night, said more than 1,800 people had signed the petition and argued that now, the town should focus on what Erie does with the mineral rights it retained.\n<\/p>\n

\u201cIf the town is approached with another deal or opportunity to sell or lease communally owned resources, please be transparent and tell us,\u201d Brecht said. \u201cHave public Q&As where people can ask follow-up questions. Listen to our feedback. Put it to a townwide vote.\u201d\n<\/p>\n

The town also clarified that the filing does not prevent Erie from later claiming additional mineral interests. That possibility became a major topic during the meeting as residents and council members discussed whether the town should identify and protect more of its holdings.\n<\/p>\n

\"\"<\/p>\n

Erie resident, Steve Drew, addresses the Erie Town Council<\/p>\n

One resident, Steve Drew, urged Erie to go further in protecting Erie\u2019s assets. \u201cFile everything with the ECMC,\u201d Drew said. He described a strategy that would include claiming clear, disputed and co-mingled rights, as well as interests associated with open space, town-controlled property and roads.\n<\/p>\n

Councilmember Emily Baer raised the same issue, asking staff what the process would look like for identifying and claiming all the town\u2019s minerals. Town staff responded that the initial filing did not determine the amount, depth or location of all of Erie\u2019s interests and that those questions could be addressed later in the process.\n<\/p>\n

The council will discuss future mineral-rights offers and the ECMC process at a Sept. 1 special meeting, including how the town should respond if another lease offer arrives.\n<\/p>\n

Meanwhile, Extraction is seeking ECMC approval for its amended drilling units and says it expects to pursue pooling of the remaining mineral interests. Erie must now decide what to do with the minerals it retained as Draco moves forward.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Three days after the Erie Town Council formally repealed its controversial mineral-rights sale to SM Energy, the town…\n","protected":false},"author":2,"featured_media":276267,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[4877,6836,6837,1676,22628,6833,57516,6838,1681,136,138,137,7359,1677,57514,8945,6835,25382,115876,976,4753,115877],"class_list":["post-276266","post","type-post","status-publish","format-standard","has-post-thumbnail","category-erie","tag-arts","tag-boulder","tag-business-directory","tag-colorado","tag-deal","tag-denver","tag-draco","tag-east-county","tag-entertainment","tag-erie","tag-erie-headlines","tag-erie-news","tag-force","tag-front-range","tag-mineral","tag-minerals","tag-north-metro","tag-redesign","tag-repealed","tag-restaurant","tag-rights","tag-unleased"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/276266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=276266"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/276266\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/276267"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=276266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=276266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=276266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}