| Two accidents on Nine Mile Road contributed to the BLM’s decision to deny Bill Barrett Corporation’s exception request, according to the Price BLM. |
The Bill Barrett Corporation (BBC) was denied an exception request to continue drilling and completion operations in the Nine Mile Canyon area by the Bureau of Land Management.
According to Fred O’Ferrall, associate field manager for the Price BLM, notice that the corporation was to be off the site by the winter closure date of Nov. 1 was clearly stated in the environmental assessment and decision record issued prior to the beginning of operations.
O’Ferrall said that groups can petition for an exception to closure and should do so at least 10 to 14 days prior to the closure date.
The request from BBC for exception was received on Oct. 28, two working days before the winter closure date, pointed out O’Ferrall.
A number of reasons led to the BLM’s decision to deny BBC’s request for exception, O’Ferrall indicated. He cited the early onset of wet winter weather and wildlife concerns as key to the BLM’s denial.
O’Ferrall said two separate incidences of slide-offs from the Nine Mile Road showed that winter weather posed a public safety threat.
“Their own operations have clarified that this is a safety issue,” he commented.
The location of the drilling is also considered to be a high value winter range for mule deer, stated O’Ferrall. Without access to the winter range, the mule deer would be forced to move into the critical area early and consume forage that was meant to last them through the late winter months.
O’Ferrall said feedback from the Division of Wildlife Resources regarding the area wildlife was also taken into account when the exception was reviewed. O’Ferrall said that BBC was given a 10-day extension to conclude operations after denial of the exception.
However, BBC Investor Relations Manager Jim Felton asserts that the group was summarily shut down after weeks of what the company felt was open discussion about later season drilling plans.
“We had been lead to believe as late as last week that, as was the case last year, BBC would probably be able to finish drilling operations by early Decemberand continue finishing rigless completion operations into December,” commented Felton. “The BLM was also well aware that we had pads constructed and drilling rigs contracted at least through November. While we had budgeted 13 wells for the area for 2004, this BLM decision means we will instead have four wells completed and selling into the pipeline and four more that will not be allowed to be completed until next spring.”
As a result of the shortened operations, Felton said that $10 to $12 Million that was to have been invested in the area this year will now be allocated to Colorado and Wyoming.
“Granted, winter stipulations do technically start on Nov. 1, we had understood that we could usually work past this deadline in a reasonable manner as we have done in the past including offering to provide mitigation as we’ve provided in the past,” he pointed out.
Felton said the cost of moving the rig without any drilling was hundreds of thousands of dollars and that BBC was leaving four very promising wells with gas ready for delivery to market.
“This in a time when the American public is looking at gas prices between $7 and $8 per mcf and the feds won’t let gas get to consumers prior to winter, the highest consumption period of the year,” concluded Felton. “The tax implications to your community, both from a severance tax and all the multipliers from labor crews and contractors in town, are significant.”