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Photo by Hans Hallgren

The Beartooth rig crew began drilling for natural gas at 10 a.m. Thursday. They planned to work straight through until early this morning.

Photo by Hans Hallgren

Driller Jay Scarbro, of Elenburg Exploration, monitors drilling pressure Thursday at a Beartooth Oil & Gas Co. rig north of Craig.

Craig — Over the hills and through the fields, to a natural gas drilling rig set inside a wheat crop about 10 miles north of Craig.

After about seven months of work, Montana-based Beartooth Oil & Gas Co. started drilling for natural gas Thursday morning on a secluded 1.5-acre spot inside Moffat County resident Jim Simpson's land.

Ken Currey, Beartooth vice president of field operations, went to sleep about 4 a.m. Thursday and was up to see the drilling start. He said he probably would be awake most of the night, at least until the rig crew runs an open-hole pipe 3,000 feet down to the bottom of the drill site.

Then he and the rest of the crew - an on-site geologist and the five guys working the rig - will know for sure whether they hit a sandrock formation with natural gas to harvest or just a bunch of water and sand.

Before that moment comes, before Currey or anyone will know whether this whole drilling operation will amount to anything, Beartooth will have spent about $300,000 to find out.

"You have to be optimistic in this business," Currey said, pretending to roll a pair of dice.

And you have to do your homework. Beartooth did a geological survey of the area before it leased any land.

This patch of dirt was especially attractive, Currey said, because the natural gas pockets are relatively close to the surface. With demand for rentable drilling rigs shooting up in the energy industry, it's more affordable to lease them for smaller jobs.

Of course, doing your homework doesn't always guarantee an "A."

Last year, Beartooth drilled two dry holes in Moffat County and was out about $600,000, Currey said. The company and its investors packed up their operations in Moffat County until now.

Beartooth has five producing wells in the same general area as the rig, but it is a small operation compared to others, Currey said.

"Beartooth is a very small, exploratory company," he said. "A big operation for us is about five rigs. For the Encanas and the Williamses, a big operation would be about 500.

"Beartooth has more in common with ranchers than the Encanas and Williamses of the world. What we do is basically sell a commodity, like a farmer sells wheat. Natural gas is the most volatile commodity in the United States."

One thousand cubic of feet of natural gas sold for about $1.36 a year ago, Currey said. This month, the price is about $7.

"It's a rollercoaster," he said.

How does a smaller company like Beartooth stay in business?

"You get lucky," Currey said. "You get a well that produces."

Perception

Currey said it bothers him to hear people say energy companies ruin America's landscape and take its natural resources without a care.

"I think a lot of it is misunderstandings and more that has been passed on," he said. "People don't understand that when we enter on private land, almost everything is an equitable agreement. We don't bowl our way in."

Mineral rights do trump land rights, however. In a case such as Moffat County where it's common for one entity to own the minerals and another to own the land, a landowner who does not own minerals cannot refuse a company access to what is under the dirt's surface.

"We work very hard not to reach any impasses like that," Currey said.

He pointed to the reclamation work done on other sites where a wellhead was installed after a rig drilled into gas.

The wellhead is no bigger than a large outside faucet. Around the wellhead, a machine separator divides the natural gas from the water, which is then stored in a nearby tank, on a piece of ground about a half acre in size.

About 80 percent of the land Beartooth will disturb in its operations will be farmable again, Currey said.

It takes about a week to start and finish a drilling operation, he said. Then, if the hole produces gas, a wellhead is installed and pipelines buried.

After a month or two, depending on the size of the pipeline, the operation is done.

"Quite frankly, it does bother me to go into somebody's wheat field," Currey said. "But we respect the landowners we work with, and that is something that hasn't changed in the 20 years I've been doing this."

He added the energy industry has not always been as land-conscious as it is now.

"They made some messes years and years ago," he said. "But you can see a lot of differences in just people's land ethics. People everywhere are a lot more aware of what they're doing to the land."

When it comes to industry perception at the state level, Beartooth is not up in arms about the Colorado Oil and Gas Conservation Commission's proposed new regulations, Currey said.

It may be a rocky learning process, though, he added.

"We're not scared, but we're concerned about some of the requirements in it and perhaps some of the reduced understanding of the process," Currey said. "It's going to take a while, it's going to take the state a while to get a system in place where everybody knows what the process is and how long it's going to take to get a permit."

Payoff

With its five producing wells, Beartooth puts about 600,000 cubic feet of gas into underground pipelines each day, compared to about 800 million cubic feet of gas produced in one day by wells around Parachute, Currey said.

Beartooth's gas feeds into Questar Gas' network of pipelines, which Atmos Energy taps into during the winter to power heating units across the Yampa Valley.

Currey said he doesn't know how much any natural gas produced by this week's drilling will be worth.

There's only so much homework a person can do.

"Tell me what gas is going to be sold for next year, and I'll tell you what it's worth," he said.