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FARMINGTON — After a year of heated debate, the Hilcorp Energy Company and the San Juan Citizens Alliance, as well as two state agencies — the State Land Office and the New Mexico Oil Conservation Division — have reached a compromise about increasing the number and density of wells drawing from the Blanco-Mesaverde formation in the San Juan Basin.

Hilcorp is taking existing wells that draw from the Dakota formation and altering them to pull natural gas from a reservoir in the Blanco-Mesaverde formation. However, a pool rule limits the number and density of wells drawing from the Blanco-Mesaverde formation. That meant Hilcorp had to apply for exceptions to the pool rule before modifying many of the existing wells.

More: Hilcorp applies to change well density rule in San Juan, Rio Arriba counties

Last year, Hilcorp filed an application to change the pool rule to allow double the number and density of wells allowed in a 320-acre unit, but environmental advocacy groups like the San Juan Citizens Alliance feared that could lead to a large increase in new wells being drilled.

The compromise approved by the Oil Conservation Commission on Aug. 15 allows Hilcorp to recomplete existing wells, but won't allow new wells to be drilled exceeding current pool rule requirements.

The Oil Conservation Commission previously granted Hilcorp’s application in November to change the pool rule. In January, the Oil Conservation Commission chose to rehear the application and suspend its previous approval.

More: OCC decision in Hilcorp case signals change for activists, industry

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

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