Developer makes deal with one firm on drilling
The developers of Aurora Highlands, a huge mixeduse development south of Denver International Airport, and ConocoPhillips have reached an agreement that will allow the oil and gas company to drill in the area while keeping its distance from homes, schools and other businesses.
Aurora Highlands LLC and ConocoPhillips had been negotiating since 2015 and formally approved the agreement Nov. 2, developer Carlo Ferreira said Tuesday. The plan to drill the wells in a 1,300-acre corridor on the far east side of the 3,000-acre development will provide a “purposeful separation” between the industrial and commercial sites and homes, the company said in a statement.
“We are pleased to confirm we have reached a mutually beneficial solution with The Aurora Highlands to relocate our surface use agreement within the ATEC Energy Corridor,” ConocoPhillips said in a statement.
Efforts to keep wells away from homes, schools and other residential sites and the energy company’s desire to access the oil and gas had threatened to throw a wrench into plans for what is considered a linchpin in the development boom around the airport.
The initial construction phase of Aurora Highlands will cover roughly 3,100 acres, with the ultimate build-out encompassing about 5,000 acres and up to 23,000 residences. Office buildings, restaurants and other businesses as well as schools, libraries, pedestrian and biking trails are proposed as part of the masterplanned community.
“We have high hopes for the area,” said Aurora City Councilman Dave Gruber. “The entire E-470 corridor is now poised for extraordinary growth.”
And Aurora has planned for years to reap the benefits of being part of the “aerotropolis,” the airportanchored development corridor. Gruber said the city filed an appeal last week with the state objecting to Extraction Oil and Gas’ application to drill on the Aurora Highlands site because the wells are proposed near residential sites.
Ferreira said the developers have been in separate negotiations with Extraction, but so far the company hasn’t agreed, as ConocoPhillips did, to keep its well pads inside the area reserved for industrial and other uses.
“We have an ongoing and continuing discussion with Extraction and hope to reach an accommodation,” Ferreira said.
Extraction Oil and Gas spokesman Brian Cain said in a statement that the company is negotiating with Aurora Highlands “to ensure that proposed energy development in Aurora is thoughtfully and properly sited in a way that makes the most sense for everyone.” He said one of the company’s proposed sites is nearly a mile — far exceeding the required setback — from any occupied or planned structures, but that the developer has proposed moving it as close as 700 feet, which Extraction doesn’t think is in everyone’s best interests.
“We have only been working with Aurora Highlands for less than one year — a very short time relative to the two-year negotiation process they have undertaken with other operators in the area — and we continue to negotiate in good faith while seeking a solution that makes sense for everyone involved,” Cain said.
Aurora Highlands and ConocoPhillips said the terms of their agreement are confidential and declined to say if they include compensation for the energy company, which will have to drill horizontally about 3 miles to reach the oil and gas. Although drilling that far could stretch the limits of companies’ technical capabilities, Ferreira said the developers assembled a team of oil and gas engineers, geologists and land planners to determine what was feasible. The approach worked when the partners built Shadow Creek Ranch in the Houston area, he said.
“Texas is the most mineral-friendly state in the U.S.,” Ferreira said, referring to his mixed-use development in Houston. “Colorado, being more of a purple state, we thought it would be easier here than in Texas. But it wasn’t.”
The developers started talking to ConocoPhillips and Extraction about where to locate the wells because they didn’t want to gamble with people’s property and safety, Ferreira said.