Greeley's Mineral Resources partners with Denver firm

Source: Greeley Tribune article by Sharon Dunn

Greeley’s hometown oil and gas exploration company just got a little less hometown. Officials from Mineral Resources Inc. announced on Monday it had formed a “strategic alliance” with Denver-based Extraction Oil and Gas, a private exploration and drilling firm. Word on the street for the last month has been that the Denver firm put out nine figures to acquire Mineral, but no specific numbers have been confirmed. It’s a move that’s privately getting mixed reviews. Some wonder if the addition of a Denver company will offer new blood to renegotiate proposed Mineral Resources drilling sites that have drawn the ire of some residents. Others wonder how local this new operation could be.

 “I’m glad to hear Extraction has acquired Mineral,” said Trisha Golding, a representative of the Frontier Parent Group, which has resisted Mineral Resources’ efforts to drill more oil and gas wells near the playground of Frontier Elementary in south Greeley. She said the acquisition was confirmed last month to her by officials from the Colorado Oil and Gas Conservation Commission. “We’re looking forward to working with them,” Golding said of Extraction. “I’m thinking it’ll be better. They’re really looking forward to working with Greeley, and they are already fostering a better conversation with Frontier parents than we’ve had in the past.”

Word about a buyout had been circulating in the oil and gas community for the last month, but officials from both companies would not discuss the deal other than through a news release issued late Monday. Officials from the companies refused to comment any further than the release, and did not return calls from The Tribune or answer questions via email. According to the release, what the “alliance” means is a combination of assets that they say will strengthen a commitment to Greeley and “ensures the support and development of positive initiatives like the use of quieter drilling rigs, reduced traffic and continued environmental stewardship.”

 The release stated that Mineral Resources will continue to work on leasing operations, while Extraction will do the rest, maintaining its Greeley field office. “Extraction represents one of the most logical industry partners we could identify to help us further develop our Greeley area assets,” said Mineral Resources President Arlo Richardson in a news release.

“They are Denver-based with a Greeley office, are a well-capitalized, private company that shares our views on prudent oilfield operations and community responsibility. We value their operational expertise and experience developing horizontal wells in the Wattenberg field. The strategic alliance creates a stronger private-company presence in the Basin, and also provides assurance to our royalty owners, surface owners and the local community that they are working with a respected operator that is highly experienced in the Basin. We value strongly our community, and believe that Extraction aligns with our ideals.”

 Extraction Chairman and CEO Mark Erickson said in the release that many of its employees live in Weld County, “and understand the importance of best-practice operations in their communities. … Both companies understand the nuances of urban operations, and we believe our past operations have helped establish our reputation in the Basin as preferred operators.”

Mineral Resources has been one of two companies drilling inside Greeley city limits in the last couple of years, but they’ve met with resistance from residents, who don’t want such an industrial process so close to neighborhoods and schools. Kristina Bain, secretary of Weld Air and Water, a resident group formed to protect the county’s air and water from oil and gas drilling, said she was a mineral leaseholder on some of Mineral Resources’ proposed wells, and didn’t feel representatives of the company cared enough about residential concerns. She said she thinks Mineral officials “flipped” the company for quick profits. “It just doesn’t sound like a good neighbor,” Bain said, noting strange past dealings with the company changing their lease terms, and methods they used to convince residents to sign off on their mineral rights. “I’m looking at their past behavior, and I don’t know if they care enough to sell to a better operator.” Bain said she knew nothing of Extraction, so she couldn’t comment about what Greeley could see under the new ownership. 

Frontier Parent Group members already have reached out to talk with Extraction officials to find better Greeley drilling locations that are currently suggested by Mineral Resources. Some have said privately they feel that Extraction’s presence will be better; others have privately worried the mix of outside players could spell trouble. Golding said she is hopeful the new blood will be good news. With Mineral Resources being local, she said some parents felt inhibited to speak openly about the drilling plans. “Some of the problems we’ve run into with Frontier Parents is they have personal relationships with Mineral ownership which prevented them from speaking out,” Golding said. “We’re hoping people will feel a little more free, and we’re kind a hoping it’s a new day, and new way of doing business and we’ll have a bit better communication.”

 The process of approval of wells at the Mineral Resources site near Frontier has started from scratch, Golding said. With Mineral’s plan to move the wells, they had to reapply to the state. The Colorado Oil and Gas Conservation Commission requires companies to demonstrate they’ve tried all options on suitable locations of multi-well pads to comply with a portion of the law that says multi-well pads should be sited as far away as possible from homes and businesses.