LOVELAND, Colo. – On Dec. 4, Larimer County entered into a non-surface use lease for the oil and gas rights for Little Thompson Farm Open Space, located southwest of Berthoud, Colo. Larimer County owns 100% of the surface and mineral rights for this property, including all oil and gas.
The Board of County Commissioners approved the lease between Larimer County and Extraction Oil & Gas, Inc. at its weekly Administrative Matters meeting today. The lease has been granted for a three-year term with an option to renew for an additional two-year term if production is not established in the initial three-year term. The lease includes an upfront bonus payment of $2,700 per acre, or $594,243, to Larimer County and a 20% royalty if production occurs.
The lease does not include any surface use of the 220-acre open space, so no infrastructure related to oil and gas extraction will be allowed on the property. With a non-surface use lease, Larimer County has ensured the open space remains a working farm and the property’s agricultural and other conservation values are protected.
Larimer County was approached by Extraction Oil & Gas, Inc. to lease the oil and gas rights for Little Thompson Farm Open Space. The County was not actively pursuing this lease opportunity.
By voluntarily entering into the lease, Larimer County could maximize the financial benefits from oil and gas extraction for the benefit of the public and ensure the County has a non-surface use lease, avoiding surface impacts on the open space. An alternative would have been to reject offers to lease the County’s mineral interest, become a nonconsenting owner and potentially be forced pooled as a result of a third-party application to the Colorado Oil & Gas Conservation Commission (COGCC).
At this time, a permit for this project has not been approved by the COGCC, so any future well pad location is unknown. Ultimately, the well pad location will be determined through the COGCC’s permitting process.
For additional information on this lease, please contact Charlie Johnson, Senior Land Agent, at (970) 498-5725 or firstname.lastname@example.org.