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Southwestern Energy slows down exploration in Moffat and Routt counties

Noelle Leavitt Riley
Southwestern Energy has an office at 390 Yampa Ave. in Craig.
110416__Southwestern

If you’re wondering what’s going on with Southwestern Energy’s exploratory play in Moffat and Routt counties, the simple answer is… not a darn thing.

Since oil and gas prices plummeted 18 months ago, Southwestern Energy now focuses mainly on the production side, meaning the company is putting efforts only into producing wells, none of which exist in Northwest Colorado.

“Moffat is largely an exploratory place,” said Moffat County Director of Natural Resources Jeff Comstock. “In these markets, companies focus on their producing fields.”

Southwestern had big plans for Northwest Colorado when it spent $180 million in March 2014 to acquire 312,000 net acres of mineral leases in Moffat and Routt counties.

Houston-based Southwestern Energy purchased leases from Quicksilver Resources Inc., targeting crude oil, natural gas liquids and natural gas contained in the Niobrara formation in Routt County and other exploratory wells in Moffat County near Sand Wash Basin.

Prior to Southwestern’s entrance into Northwest Colorado, Shell Oil — which had a joint venture with Quicksilver on the mineral leases — announced that it would pull out of Northwest Colorado and put its stake up for sale in the summer of 2013. That’s when Southwestern entered into the multi-million dollar transaction that allowed the company to take over the leases.

In August 2014, the company announced that it had entered an agreement to acquire an additional 74,000 net acres of mineral leases in the Niobrara shale formation for $31 million.

That same month, the company finished drilling the Welker well near Moffat County Road 30 west of Craig, hiring contract workers from Kawcak Inc. to help with the well.

Southwestern Energy officials boasted how about 50 workers passed through Craig, eating, shopping and lodging in Craig hotels while working on the Welker well.

In May 2014, the Routt County Planning Commission unanimously approved to recommend a permit for Southwest Energy to drill a new oil well located off Routt County Road 80. The State Land Board north of Hayden controls that land.

A month later, Routt County commissioners approved the permit.

Fast forward to less than two years later, and the company had to rearrange business plans.

In January, Southwestern Energy announced that it would cut 40 percent of its staff, equaling 1,100 jobs, to deal with low gas prices. Two employees in Northwest Colorado were laid off, and the company closed its office in Steamboat.

“We currently have five employees based out of Southwestern Energy’s Craig office. We have slowed our investment activity in exploratory plays as we focus on maneuvering through this challenging commodity cycle,” the company’s spokes woman, Christina Fowler, said in an email.

As reported in the Craig Daily Press, at the end of 2014, Southwestern had five exploratory wells across Moffat and Routt counties and another two planned for 2015.

“These organizational changes are required to maintain competitiveness in this low gas price environment. We regret having to make this decision and we thank all of our employees who were affected by today’s announcement for their contributions to Southwestern Energy Company,” stated a news release from Southwestern.

Contact Noelle Leavitt Riley at 970-875-1790 or Contact Noelle Leavitt Riley at 970-875-1790 or nriley@CraigDailyPress.com or follow her on Twitter @noelleleavitt.Contact Noelle Leavitt Riley at 970-875-1790 or nriley@CraigDailyPress.com or follow her on Twitter @noelleleavitt.


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