FORT LUPTON — Oil and gas activity may be trailing off throughout the country, but officials at Anadarko Petroleum are gearing up to make their southern Weld County acreage more active than it has been in five years.
Officials from the Fort Lupton city, along with economic development folks and energy industry advocates, celebrated Anadarko — one of the top two oil and gas companies in Weld County — amid a backdrop of vacant grassy land that will house the next phase of development for the county due east of town. The pomp was about Anadarko’s continued commitment to Weld County. This time it centered in its upcoming Fort Lupton drilling program.
Craig Walters, vice-president of operations for Anadarko, said the company planned to drill up to 50 wells within the city as part of a much larger project in southern Weld. “In 2015, we expect to drill over 300 wells, which will generate approximately $320,000 worth of tax revenue (per well),” Walters told a community group that had assembled under a tent near the Fort Lupton Fire Station No. 2.
“At Anadarko, we want to be known as a company that does what it says,” he said. “We recognize the importance of the energy we produce, but (also) the importance of the manner in which we produce it.”
Walters said the drilling should begin in September or October. The drilling area encompasses much of the acreage the company gained when in 2013 it swapped roughly 100,000 acres throughout Weld County with Noble Energy. The land swap allowed both companies to concentrate their efforts in compact regions in Weld rather than the hopscotching throughout the county they had been doing for years.
The swap put Anadarko’s “territory” in southern Weld, in more of the heart of the Wattenberg Field, the area from which the county derives much of its natural gas. Noble’s new territory became concentrated in northern Weld.
Weld County Commissioner Barbara Kirkmeyer lauded Anadarko’s investment into the community, through its donations to schools and nonprofits.
“They’re very active in investing back into the community that we work and play in, and they work in and employ our residents,” Kirkmeyer said. “The list goes on and on how they contribute back to community.”
Anadarko has always had some long-established vertical wells in the Fort Lupton area. This new phase of development will be the company’s first jaunt into horizontal drilling there.
For the city, it means working with the company to ensure mitigating impacts on neighbors in what is really the center of the Wattenberg Field. It’s not hard for residents to jump on board, as most have grown up with drilling activity, Fort Lupton Mayor Tommy Holton said.
“Drilling has been on and off in the last five years,” Holton said after the barbecue luncheon. “They were west of U.S. 85 and east of U.S. 85, and they were just converging this way.
“What Anadarko was waiting for was the perfect time to drill to get underneath the town,” he added.
The Fort Lupton City Council earlier this month approved the company’s request to begin drilling 11 new wells, which should be running 24 hours a day over the next three to four months.
Holton said the economic impact of each producing well in taxes came to $300,000-plus, which goes a long way toward polishing city roads and infrastructure.
Anadarko has been hit with the oil and gas downturn like many in the drilling fields, but it’s taken a different approach. There have been no major announced layoffs at the company. In its most recent operations report, Anadarko stated it would defer completing 120 wells in the Wattenberg, which would result in flat production for the remainder of 2015.
Deferring completion means the company will drill the initial holes, but not stimulate and frack the rock beneath to produce the oil and gas. The strategy of waiting allows the company to continue to drill, and keep crews working, but also wait to stimulate until crude prices rebound.
Anadarko and companies throughout the field have been working to reach efficiencies in drilling, and paring down costs through service companies. In doing so, Anadarko reported it was able to double the workload of its drilling rigs, which has helped bring the cost of drilling a horizontal well to $1 million.
Holton said the company had also been working with Fort Lupton to do it right. “They’re working with the municipality on land-use issues so we can make oil and gas work in the city and the county,” he told the group. “The highest and best use for land is not oil and gas, it’s oil and gas and development and oil and gas and ag. Between us and Anadarko, we’re making that happen.”
This article was written by Sharon Dunn from Greeley Tribune, Colo. and was legally licensed through the NewsCred publisher network.