Southwestern Energy’s plans for second well at Dill Gulch include water pipeline from the Yampa River | CraigDailyPress.com

Southwestern Energy’s plans for second well at Dill Gulch include water pipeline from the Yampa River

Tom Ross

— When Southwestern Energy drills the second oil well on its Dill Gulch pad 3.25 miles south of Hayden it will use a temporary surface pipeline to shuttle approximately 8.4 million gallons of water from the town of Hayden, either directly from the Yampa River or the new water tower near Yampa Valley Regional Airport.

Routt County Commissioners unanimously approved the second bore at Dill Gulch, which is in addition to the original vertical bore. The new well will be hydraulically fracked and will be a horizontal bore (initially vertical to a depth of 9,600 feet before turning to the west), according to Southwestern regulatory analyst Cheryl Rowell.

The vote came a day after the Colorado Water Trust announced that Southwestern was collaborating with the trust, the city of Steamboat Springs and the Upper Yampa Water Conservancy to boost late summer flows in the Yampa between Stagecoach Reservoir and Lake Catamount. The Lake Catamount Metropolitan District has agreed to pass the extra 12 cubic feet per second along, raising the possibility it will also boost flows in the town section of the Yampa.

Water, and plenty of it, is implicit in the hydraulic fracturing process.

Southwestern geologist and planning coordinator Brian Bohm told Routt County Commissioners Tuesday that, in terms of impact, the temporary pipeline is preferable to the many truck trips it would take to deliver the water.

"We'll cross (under) several county roads using culverts, and any landowners we cross, we'll negotiate a surface-use agreement," Bohm said. "If there are land damages, we pay them after the fact."

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The temporary pipeline could range from eight to 14 inches in diameter and be similar to a fire hose in that it is designed to lay flat on the land.

"We'll use a two-track Bobcat with a reel to lay it out," Bohm said.

Hayden Town Manager David Torgler confirmed Southwestern representatives have discussed the matter with the town's water staff.

The water pipeline, which is new to Routt County in the context of exploratory oil well drilling, does not come under its purview, according to county planning staff. And although the County Commissioners agreed they didn't want to get in the middle of Southwestern's negotiations with landowners to cross their land with the temporary pipeline, they asked Bohm to return with a satellite map showing the finalized route of the pipeline.

The first Dill Gulch well was drilled in 2014, with completion carrying into 2015. The well pad will be increased from 2.4 to 2.8 acres to accommodate the second well, but access will not change. The fracking of the new well will be accomplished through the course of 35 days. The vertical well will be "closed in" for safety reasons while the second well is being drilled, Rowell, added.

Analysts rated Southwestern's stock a "hold" earlier this month, indicating neither a positive nor a negative stance. TheStreet.com noted that, in spite of deteriorating net income and weak operating cash flow, its profit margins are expanding, and its debt levels are "reasonable."

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

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