Energy rights owners in Routt advocate for property rights
August 30, 2012
Steamboat Springs — More than 50 people with a stake in surface and subsurface mineral rights and the emerging oil play in Routt County have formed an organization called Citizens Supporting Property Rights in order to impress upon local officials and candidates for office their desire to see their property rights developed.
And it's not unrealistic to say that subsurface owners who have executed leases with energy exploration companies here have hundreds of thousands of dollars at stake.
Steamboat Energy Consultants’ John C. Lamb, who spoke at the Northwest Colorado Oil & Gas Symposium in March, said Thursday that depending upon the individual well and the lease, the subsurface rights holders could realize "many tens of thousands of dollars per month" during early phases of production.
Citizens Supporting Property Rights hosted a private forum in Hayden on Monday involving candidates for two Routt County commissioner seats that are up for election Nov. 6. And on Tuesday, the group delivered a letter to the Routt County Board of Commissioners expressing its concerns, saying it does not view the oil and gas industry as its friend or its enemy but as its business partner.
"Like any other business relationship, we believe they deserve fairness, respect and clarity while we hold them to the highest possible standards," the letter reads. "We are a group of landowners, farmers and ranchers who own land and mineral rights in Routt County and are establishing this group to ensure their responsible development. We have a reasonable right to responsibly develop minerals owned beneath our property."
David Ludlam, executive director of the Western Slope Colorado Oil and Gas Association said that statement is an ideal characterization of what a relationship with the energy industry should be.
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"I have not, to this point in my tenure as executive director, seen a group come together with as much focus and organization as they have," Ludlam said. "It shows there is another side to the dialogue, and we encourage it."
Ludlam said the potential economic benefits from oil and gas wells to private property owners are real and measurable across Northwest Colorado.
"The public sometimes thinks that when we talk about revenue to landowners, it's some kind of talking point," Ludlam said. "But whether it's 100 barrels a day to a thousand barrels a day, it's the type of revenue stream that can make or break a family ranch or allow a ranch to continue operating."
Spokeswoman Amy Williams reminded those at the Monday gathering about the impact that development of mineral rights (including oil and natural gas) can have on local economies.
"Responsible energy development can be a part of a stronger local tax base that diversifies our regional economy," Williams wrote in a related press release. "Just as importantly, mineral rights are property rights. Considering we've paid local taxes on those minerals, there is no shame in advocating our rights to responsible access to our property."
Williams told the Steamboat Today that the forum was not publicized and the intent was to conduct it for the benefit of members of Citizens Supporting Property Rights. In attendance was Democratic incumbent Commissioner Doug Monger, of District Two, and his Republican challenger Tina Kyprios. The two challengers for the open District One seat, Republican Jim "Moose" Barrows and Democrat Tim Corrigan, took part, as well.
Also helping to organize the forum was lifelong rancher Harry Thompson, a Citizens Supporting Property Rights member, who said that through the leases, energy exploration would be placed in the hands of the region's best land stewards: farmers and ranchers.
"This is important because preserving large-acre ranches can be achieved through the new mineral revenues that our families will receive from responsible oil and gas production on our lands," Thompson said.
Subsurface mineral rights owners who enter into agreements with energy exploration companies potentially stand to benefit financially in two ways: first with a rental or bonus payment when they sign a lease, Lamb said, and later from royalties that could reach many tens of thousands of dollars per month or more depending on the well, he added.
The amount of royalties mineral rights holders receive can vary significantly and depend primarily on whether a well is drilled to access their holdings and whether it produces, but lease values also vary with the well field and its history as well as the leases already executed in a field.
Documents on file at Routt County show that the mineral rights lease for an approved well here would pay the lessor 15 percent of oil produced. Lamb cautioned against assuming that 15 percent is typical because the terms of leases vary widely.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com