State approves Noble Energy drilling plan in Weld County

DENVER — The Colorado Oil and Gas Commission voted this week to approve a plan by Noble Energy Inc. (NYSE: NBL) to drill new oil and gas wells across a 100-square-mile swath of unincorporated Weld County.

The plan allows the Houston-based operator to begin the process of drilling nearly 800 new wells east of Greeley. Noble would have six years of exclusive drilling rights in the area described in the plan.

Noble’s goal in developing the comprehensive drilling plan was to “maximize production and minimize environmental impacts and disturbance,” Jim Martin, an attorney with Denver-based law firm Beatty & Wozniak P.C., told the COGCC during a hearing Monday. The law firm represented Noble in the hearing.

As part of the plan, Noble agreed to plug and abandon 1,471 existing wells.

The COGCC developed the current regulations for comprehensive drilling plans in 2007 in an effort to mitigate impacts of oil and gas operators while maximizing production efficiency. The Noble plan is the first large-scale operation approved under these guidelines.

“I think this is extraordinary,” Commissioner Howard Boigon said. “I don’t think we could have imagined in 2007 and 2008 that anyone could have pulled this off.”

He added: “We are fortunate that this is all in a rural area and (Noble) control(s) so much acreage.”

The company controls about 85 percent of the acreage within the 100 mile area included in the plan.

Mike Wozniak, president of Beatty & Wozniak, said, “hopefully this will create some sort of a template” for future drilling plans.

Commissioner Ashley Ager echoed his sentiment.

“The ultimate goal would be for other (operators) to start doing this,” she said.

It is unclear — to both the commissioners and Noble representatives — exactly how the passage of Proposition 112 will impact operations within the planned drilling area.

The issue could hinge on whether drilling permits, which must be applied for separately from the drilling plan, are issued before law is approved and ultimately goes into effect.

If passed on Nov. 6, Proposition 112 would push new oil and gas drilling activity farther from certain open spaces, homes and other types of buildings, and waterways. That activity could be no closer than 2,500 feet from occupied structures and areas such as parks. Current setback regulations are 500 feet from residential properties and 1,000 feet from structures such as schools and hospitals.

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