Oil company planning to drill exploratory wells in Moffat County
Shell Exploration & Production Company meets with county officials Monday
Matthew Holman, a project lead for Shell Exploration & Production Company, sat Monday in a room of Moffat County officials with a map of Northwest Colorado spread out on the table.
“You don’t find too many areas like this on Mother Earth,” he said looking at the map.
Holman and other Shell officials met with the Moffat County Commission and other county officials to discuss the oil company’s interest in the area around Craig, a recent mineral leasing effort throughout the county, and the possibility of exploratory oil drilling and production that could take place in the summer.
“What we are doing here is laying the ground work for several years of engagement if we should be so lucky as to find something that merits a larger project out here,” Holman said. “And, we are hopeful. I like the play.”
Holman said Shell plans to start drilling exploratory wells to test the amount of oil available in the local portions of a geological layer, known as the Niobrara formation, in the summer. Shell’s area of drilling interest is located mostly in the Hamilton area, south of Craig, but extends east to Routt County in places, Holman said.
“At this point, we don’t know if the play is a total bust or if there is a lot of oil there or what the deal is,” he said.
The company plans to drill seven to 12 exploratory wells to determine if the area is worth increased future production, Holman said.
“So, basically the idea is we would like to drill as much as we possibly could to learn as much as we could about the play so we can make a decision after this first round of drilling and say, ‘Well, it looks like we are either on to something here, or we are not on to something here,’ instead of dribbling it out over the years,” he said. “Knock it out and be done.
“With luck … there will be something to do and then we can go to the next step, which would be subsequent appraisal on a little bit more refined area.”
Carolyn Tucker, Shell community relations representative, said it would be hard to know what could spur along the development of the drilling interest.
“Our intention is that we wouldn’t be here looking if we didn’t think there was some promise to the play,” she said. “And I think we will be in a much better position down the road when we understand cost, when we understand … how easy it is to drill to the target zone and if it does flow.”
Tucker noted, however, the drilling and oil production processes take a long time to mature.
“This isn’t going to happen overnight by any means,” she said. “This is going to be a two-, three-, five-year process where we gain enough information to make decisions and make good decisions.”
Moffat County Commissioner Tom Mathers asked Shell officials if, when they are doing experimental drilling, there would be supplementary business for local contractors to provide.
“We try to use as much of the local resource as we can,” Holman said.
Commissioner Tom Gray said he thinks a lot of local businesses are eyeing Shell’s activity, and the activity of other oil companies, with a good deal of interest in hopes it would become an economic benefit to the area.
“But, under the heading of reality, I want the message to be, ‘This isn’t 500 people here for the next five years in the exploratory phase,’” he said. “Methodically, if these pan out, then there will be more and in a five-year build up, you might have that many people come into the area, 500 new jobs.
“But, initially we are looking at maybe three months of a couple hundred jobs, and that includes the contractor jobs and everybody.”
Gray noted, however, even the company’s pre-drilling presence has had a sizeable, positive impact on the local economy.
Tucker said Shell’s presence in the area is “not the silver bullet to fix the economy in Craig.”
“I can’t stress that enough — it is a long, slow process,” she said. “It is not jobs tomorrow.”
Brian Smith can be reached at 875-1794 or firstname.lastname@example.org.