SUBJECT:
Title
Discussion - Potential Sale of Town's Mineral Rights
Department
DEPARTMENT: Legislation
Presenter
PRESENTER(S): Breena Meng, Town Attorney
David Frank, Director of Environmental Services
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Time
TIME ESTIMATE: 150 minutes
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For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
Yet to be determined
Policy
POLICY ISSUES:
Per the Town Charter, the purchase and sale of Town property, including mineral rights, must be approved by the Town Council by ordinance.
Recommendation
STAFF RECOMMENDATION:
Discussion of potential sale of mineral rights and negotiation points.
Body
SUMMARY/KEY POINTS
* This in a chance for the Town Council members to discuss the possible sale of Town-owned mineral rights, understand the current negotiation points, and ask questions.
* No vote will be taken or decision made at this meeting.
BACKGROUND OF SUBJECT MATTER:
The Draco Pad was approved, March 26, 2025, by the Colorado Energy and Carbon Management Commission (ECMC) despite Erie's objections and thorough testimony. The Civitas/SM Energy project involves 26 wells in a pad located in unincorporated Weld County with underground drilling extending west under the Town of Erie and Boulder County.
Civitas/SM Energy approached the Town in Spring 2025 regarding the possibility of acquiring the Town's mineral rights.
June 2, 2026 will be a chance for the Council to discussion in more detail the possible sale of Town mineral rights to SM Energy. The Town Attorney has been negotiating this sale with Civitas. The basic negotiation points currently are:
* Land to be received by the Town to include three parcels on County Line Road approximately 158 acres
* The plugging of 17 existing wells in Erie
* The ability of the Town to pursue its own environmental testing at the Draco Pad including air quality monitoring
* Percentage of the revenue off the wellhead to be paid to the Town - 2%; estimated to be $15M+.
Should an agreeme...
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