A Devon Energy representative told the City Council on Tuesday night that proposed rules to consolidate gas well sites on the city’s west side would not allow the company to fully develop its holdings.
Speaking on behalf of a small delegation of Devon employees at the city’s public hearing, Chance Wilson said company representatives had met with city staff several times to get an exception for operators that have already negotiated agreements with surface owners.
If the city’s new rules go into effect, Wilson said, “we would be effectively prohibited from drilling any new wells in Denton.”
Late last year, the city unveiled an innovative plan to have energy companies select a single location for the gas wells they want to operate in hopes of freeing up land for development on the city’s west side. During his public testimony in Austin on Monday, Mayor Chris Watts told state leaders that Denton had already seen developers walk away from projects because they could not negotiate with energy companies.
The program, dubbed “co-location,” allows the city to review an energy company’s application to drill by pulling together all contiguous leases, selecting a single location for multiple horizontal wells and releasing the rest of the land for other development.
Devon has about 10,000 acres leased inside the city limits and another 28,000 leased in the city’s extraterritorial jurisdiction, Wilson said.
He brought out a map of the 3,400-acre Cole Ranch, projected overhead for the council and the people in the chambers to see, and pointed out 15 well sites that Devon was working on the ranch. He said the company needs every one of those pad sites in order to get all the gas underneath.
Pressed several times and in different ways by three council members to explain why consolidating some of those well sites couldn’t work — after all, advances in horizontal drilling technology allow companies to drill lateral lines a mile long or more — Wilson demurred.
He told the council the company couldn’t drill 32 wells from one 5-acre site safely. He said he couldn’t say how many well sites could be drilled from one site safely.
“To drain the Barnett [of its natural gas], we need one well for every 20 acres,” Wilson said, citing well-spacing rules from the Texas Railroad Commission.
Cole Ranch, which straddles FM2499 just west of Interstate 35W, has been sold and sold again to developers looking to build a master-planned community there. Wilson said that Devon had not yet met with the current developers about the proposed subdivision that could bring many new homes close to the company’s existing well sites.
Council member Greg Johnson said that while he appreciates the company’s right to preserve its massive holdings, the city also is looking for ways to preserve the rights of surface owners to develop their property, too.
In addition to the consolidation and co-location programs, the city is also planning to improve disclosure of existing gas well locations to people buying homes and property in Denton. Many residents in some of the city’s newer subdivisions say they weren’t told that operators might come back to old wells to drill and hydraulically fracture them.
The council also is expected to increase insurance coverage requirements of operators and hire an independent firm to conduct additional equipment inspections. The council discussed adding several other amendments, many proposed by residents, to better address some of the nuisances of urban drilling.
Council member Kevin Roden asked the staff to make sure the rewritten ordinance and any additional amendments that might be considered individually be published on the city’s website well in advance of the vote, scheduled for April 7, so the public can review them.
During the meeting, Watts and several council members thanked Cathy McMullen for her tireless work and professionalism in leading the citizens’ initiative that led to November’s landslide vote that banned fracking in the city limits.
Watts, who had spent Monday and half of Tuesday in Austin testifying against bills filed in response to Denton’s ban, told her he was happy to see so many Denton residents in Austin, too. He was proud to defend the initiative, he said.
And he remained optimistic for the final outcome, he said. The ban also is being challenged by the Texas General Land Office and the Texas Oil and Gas Association in court.
“We’re a community that follows the rule of law,” Watts said. “The verdict is not out on all this.”
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.