SUBJECT:
Title
Reconsideration of Ordinance No. 028-2026 - An Ordinance of the Town Council of the Town of Erie Authorizing the Sale of Minerals to 7N, LLC, Accepting the Conveyance of Real Property from 7N, LLC, and Approving Agreements with 7N, LLC, SM Energy Company, and Extraction Oil and Gas, Inc. Regarding the Exchange of the Mineral Rights for the Real Property
Department
DEPARTMENT: Town Attorney
Presenter
PRESENTER(S): Breena Meng, Town Attorney
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Time
TIME ESTIMATE: 45 minutes
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For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
Approval of the ordinance and agreement would approve for the Town:
* $4.5M cash payment.
* Three properties on County Line Road appraised at ~$13.575M.
* Production revenue increased from 2% to 3%, estimated as high as ~$25.5M over the life of the Draco Well.
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.
Reconsideration is allowed per the Council Rules of Procedure and would be of the item exactly as it was presented on June 16. Council may discuss the item without reopening the public hearing; however, if Council would like to ask questions or introduce any new information, the public hearing will need to be reopened.
Recommendation
STAFF RECOMMENDATION:
Staff has no recommendation; this is a policy decision of the Council.
Body
SUMMARY/KEY POINTS
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 to access from the Draco pad.
The basic contract points are:
* ...
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