HomeMy WebLinkAbout1.05 Certification of Mineral Owner Research1
Memo
Mineral Rights for Battlement Mesa
Half Moon Subdivision 11/09/2021
Pursuant to the Garfield County Memorandum, dated June 24, 2014, regarding Mineral Interest
Research, in which the severance of mineral interests from surface right interests in real property is
detailed and the requirement to notify the current owners of mineral interests on a property for which a
land use application has been submitted is noted, the following efforts were made to identify the
current owner of said rights:
1. The current ownership deed for the property was reviewed. No reservation of mineral interests
was noted.
2. Likewise with Schedule B-II of the title insurance policy.
3. As such, Connect One Design, on behalf of the client, researched the subject property on the
Clerk and Recorder’s computer.
a. There were no Notices of Mineral Estate Ownership filed which directly aligned with the
subject property, nor any specific to Section: 18, Township: 7, Range:95.
b. There were several Surface Use Agreements, however, that appear to have been
negotiated with the previous owner of the subject property, Battlement Mesa Parcel 5
LLC.
i. A memo dated January 15, 2009 transferred surface use from Exxon Mobil
Corporation to operator, Antero Resources Piceance Corporation. (Exhibit A)
ii. A memo dated July 17, 2017 transferred surface use to Ursa Operating Company
LLC whose address is listed as 1600 Broadway, Suite 2600, Denver, CO 80202.
(Exhibit B)
c. Although Ursa Operating Company filed for bankruptcy in the Fall of 2020 (Exhibit C),
Resolution no. 2020-57 of the Board of County Commissioners for Garfield County,
dated November 9, 2020, extended the “time to meet the conditions of approval for a
special use permit for extraction and processing of a natural resource”, such that we
believe Ursa Operating Company LLC to be the current holder of the mineral rights for
the subject property. (Exhibit D)
https://www.gjsentinel.com/news/western_colorado/ursa-files-for-chapter-11-bankruptcy/article_745e038c-ee04-11ea-b1a7-e797c66d7bb6.html
Ursa files for Chapter 11 bankruptc y
By By DENNIS WEBB Dennis.Webb@gjsentinel.com
Sep 4, 2020
An Ursa rig near Battlement Mesa.
Christopher Tomlinson
Ursa Resources, one of the few companies to have drilled natural gas wells in recent years in
western Colorado’s Piceance Basin, has filed for Chapter 11 bankruptcy.
Citing challenges ranging from low gas prices to regulator y uncertainty in Colorado to
burdensome pipeline contracts inked during better times, the company is hoping to deal with
its debts by finding a buyer, something it so far has been unable to do.
The company’s bankruptcy filings show it has $282.7 million in secured debt. Its largest
unsecured debts include $5.3 million owed to the Garfield County Treasurer’s Office, $5
million owed to the interstate Ruby Pipeline and $718,000 owed to the Rio Blanco County
Treasurer’s Office.
Ursa is privately owned and formed in 2012 to buy and operate properties in the Piceance
that had been owned by Antero Resources.
It currently owns 41,000 net acres of oil and gas properties in the Piceance Basin, and has 579
gross operated wells now producing gas, natural gas liquids and oil, according to its court
filings. While its most high-profile drilling had occurred around and in the Battlement Mesa
residential community, it most recently had been drilling in rural Rio Blanco County, but isn’t
currently drilling any wells.
Its bankruptcy filings indicate it has obtained financing allowing it to continue operating
during bankruptcy proceedings, as it seeks to continue paying its 21 employees, along with
royalty owners, and operating, utility and other ongoing expenses.
One of Ursa’s filings says an oil and gas price downturn in late 2014 “dealt a blow to the oil
and gas industry and to the Company in particular.”
Ursa “was able to rally somewhat in 2016 and 2017,” according to the filing, by Jamie
Chronister, chief restructuring officer for Ursa and its affiliates. But Chronister said in the
filing that in 2017, depressed prices and “drilling disappointments, particularly with
development from a well pad that did not meet expectations” led to renewed financial
difficulties and a reduced borrowing base that kept it from drilling more wells.
“The passage of Senate Bill 181 in Colorado made it even more difficult for the Company to
operate due to the increased restrictions on drilling and operating oil and gas properties, and
the uncertainty caused by the bill also dampened the ability to raise capital,” the filing says.
Senate Bill 181, passed last year, overhauled how oil and gas development is regulated in the
state, in part by putting a priority on protection of public health, safety, welfare, and the
environment and wildlife. State agencies continue to work on adopting numerous rules to
implement it.
Ursa worked through most of last year to try to refinance or restructure its debt, or sell its
assets. According to Chronister’s filing, low gas prices, regulator y uncertainty and the
financial burdens of two interstate pipeline contracts all have made a sale difficult to date.
The pipeline contracts, one involving the Ruby Pipeline and another involving Wyoming
Interstate Co., were agreed to in 2013. Ursa says it doesn’t currently use any pipeline capacity
under either agreement, but WIC and Ruby recently sued “based on alleged amounts due
under these agreements.”
Ruby Pipeline is seeking about $13.7 million plus interest in a breach-of-contract suit. In its
suit WIC is seeking about $362,000 in damages. Ursa didn’t return a message left with its
Denver office Thursday requesting comment.
Dave Devanney, who until recently lived in Battlement Mesa, where he frequently voiced
concerns related to Ursa’s drilling in that area, said it’s not a good time to be in the oil and gas
industry and he was anticipating Ursa filing for bankruptcy.
“We only hope that the residents of Battlement Mesa are not further impacted by our
neighbor Ursa Resources and their presence in our residential community,” he said.
Dennis Webb
Devanney now lives in Denver but remains active in oil and gas issues, recently having
testified to the Colorado Oil and Gas Conservation Commission as it continues with
rulemaking to implement Senate Bill 181.
Ursa noted in a filing that one natural gas drilling rig is currently being operated in the
Piceance Basin, down from 100 at one time, due to depressed gas prices. That peak was
reached in 2008. Now, Terra Energ y Partners is the only company running a rig locally.