Oil Conservation Commission hears arguments in well-density case

Energy company seeking to double number of wells per unit

Hannah Grover
Farmington Daily Times
A Hilcorp pump jack is pictured in Animas Park in Farmington.

FARMINGTON — Members of the Oil Conservation Commission went into closed session late this afternoon to discuss an application from Hilcorp Energy Co. to increase the number of wells that can draw from the Blanco-Mesaverde oil and gas pool in San Juan and Rio Arriba counties.

The hearing began at 9 a.m. and stretched into the afternoon, but no decision had been made by 4:30 p.m.

The closed session followed a lengthy public comment period and testimony from Hilcorp officials regarding the application.

Hilcorp asked for the number of wells to be increased from four per every 320-acre unit to eight active wells on each 320-acre unit.

Gobernador-area rancher Don Schrieber, who attended the meeting in opposition of the application, said he did not anticipate a decision would be made today when reached by phone in the afternoon while the commission was hearing public comments. However, he said he believed the commission would approve Hilcorp's application.

"They only wanted to hear from industry," he said.

The proposal drew controversy, and the incoming Land Commissioner-elect Stephanie Garcia Richard requested that the decision be delayed until she takes office because it will impact her administration.

Regardless of Garcia Richard’s request — as well as letters to the state agency that presides over the Oil Conservation Commission from other Democratic state and federal elected officials requesting that the hearing to be postponed — the commission pushed forward with the hearing. Schrieber said current state Land Commissioner Aubrey Dunn, a Republican-turned-Libertarian, sent representatives to the hearing to also ask for the decision to be postponed.

The hearing was delayed in September when the New Mexico Attorney General’s Office questioned whether the proper noticing procedures had been followed.

Hilcorp hopes to recomplete wells, meaning it will take existing wells that are drawing from the Dakota formation and reconfigure them so they draw from the Blanco-Mesaverde formation instead. The Blanco-Mesaverde formation is closer to the surface.

Hilcorp already has been recompleting wells throughout the San Juan Basin.

The city of Aztec has approved about half a dozen applications from Hilcorp to recomplete wells within its city limits, including one located near residential property off of Western Drive and another for a well site located across an irrigation ditch from McCoy Elementary School. Both permits were approved in late October.

The one off of Western Drive was approved with the condition that Hilcorp address residents’ complaints about odor from the site.

Changing the well-density rule will not impact the permitting requirements for modifying or drilling new wells. In more than 70 instances this year, Hilcorp has been granted exemptions from the current density regulations, which have allowed the company to have more than four active wells on a 320-acre unit.

Opponents attended the Oil Conservation Commission hearing today to voice concerns about the potential environmental impacts the change could have. The opponents cite increased methane emissions among those impacts. Prior to the hearing, the opponents highlighted a recent U.S. Environmental Protection Agency request for information from Hilcorp regarding emissions from recompleted wells.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.