Larimer County approves oil lease on open farmland near Berthoud

Larimer County has approved a lease allowing Extraction Oil and Gas to horizontally drill beneath the Little Thompson Farm, a preserved property south of Berthoud that is currently and will remain a working farm.

This site, if drilled, will constitute the first oil production on any preserved open space owned by Larimer County.

The county will receive $594,243 for the right to drill on the property for the next three years, then 20 percent of any profits from that production. All of that money that will go toward paying off a loan for a portion of the $8.4 million purchase price of the land, formerly known as the Malchow farm.

But the agreement is about much more than money, noted officials with the Larimer County Department of Natural Resources, which owns the property.

Charlie Johnson, the senior land agent that negotiated the deal, said the priority was to negotiate a lease that will prevent any wells or drilling infrastructure on the farm.

“No roads, no rigs, no temporary infrastructure,” added Meegan Flenniken, the conservation, planning and resource program manager for the natural resources department. “There’s no surface impact.”

Larimer County did not know where the drilling equipment will be located, and a representative of Extraction Oil and Gas could not be reached to comment.

The county cannot prevent the company from drilling, but with this deal, can prevent it from happening on site and can negotiate a better price, Johnson said.

“There is some revenue involved here,” said Todd Blomstrom, the county’s public works director.