A drilling rig in a residential Greeley neighborhood? It’s not what you think
January 13, 2017
The Milliken No. 1 oil and gas well was drilled in 1963, prior to the development of the Highland Park West subdivision in Greeley. The well was plugged and abandoned after two months, producing nothing. Synergy Resources must re-plug the well prior to its own drilling operations in the area, which should commence next year.
Here are promises Synergy made to residents:
» Hours of operation, 7 a.m. to 5 p.m.
» 24/7 site security.
» The direct area of operations will be enclosed with a security fence.
» A Synergy representative to be on site at all times.
Bobbie Burke looked out her front window in west Greeley on Wednesday morning and saw an almost unbelievable sight.
A drilling rig — in her neighborhood. Upon closer inspection, the rig towered 60 to 70 feet in the air in a resident's front yard in the Highland Park West subdivision near 54th Avenue and 26th Street.
"It's a little strange looking at this out your front window," said Burke, who lives on 56th Avenue.
Aren't there supposed to be rules against drilling in a neighborhood, she wondered? And in someone's front yard?
She and others quickly grew angry.
But this rig is doing anything but drilling for oil. It's there for one of the most unique circumstances oilman Craig Rasmuson has ever encountered.
Rasmuson, executive vice president of business development at Synergy Resources, is leading his crews to cap a well drilled in 1963 that never produced.
"This is an extremely unique situation to find a well that, lo and behold, was built over," Rasmuson said. "It was just an open field back in 1963, and it had a house built on it in 1988, and it has had numerous owners. There's no record of it in the title. I don't know how that was missed."
Synergy has plans to drill 20 wells in this area in the next year, a good $100 million investment. Its plans are to drill the wells as what the industry calls "long laterals," meaning the company will stage drilling equipment up to 2.5 miles away from the site to meet required setbacks of at least 500 feet in a residential neighborhood.
This abandoned well would put a wrinkle in that plan if they didn't do something.
"There is no risk to it sitting there as it was," Rasmuson explained. "The concern is when we do future development in proximity of that old well, that could compromise it."
Here's the technical stuff: The well was drilled vertically — straight down — 54 years ago. Prior to any new horizontal drilling, energy companies must check the integrity of all vertical wells within the vicinity.
In this case, Synergy found one, drilled in a formation called the J-Sand, which is about 7,600 feet below the surface.
Synergy needs to cap it above the formations in which it plans to drill, the three benches of the Niobrara and the Codell, which are about 800 feet above its actual cap.
"The concern is the cement and pipe integrity of a well over 50 years old," Rasmuson said. "So when you add the pressure of a hydrofrac it could communicate to that well. Because the plug is below the formation we're in, it could compromise that existing hole. It could come back to the surface."
Synergy contractors had to use high powered metal detectors to find the well.
"We originally thought it was homeowner to the north. In 1963, there was no GPS mapping. We had an engineering company with high powered metal detectors and they wanded both of the yards," Rasmuson said. "It's commonplace to have to re-enter an old well, but the majority of the time it is in ag areas. This is one that just happened to have a subdivision built over it."
Synergy workers went in and found the old oil well casing 4-5 feet below the surface.
Then they had some explaining to do, sending out notices to 44 surrounding residents about their need to cap the well. They needed to go in and drill, which would displace not only the homeowner — who does not want to be identified for this story — but his neighbor across the street, former Greeley City Councilman Harry Felderman, for about 10 days.
Synergy put the family up in a local hotel.
"It's a very small chance this would ever happen, and the family has been great," Rasmuson said. "They giggled it off and said, 'We should have played the Powerball.'"
Synergy is footing the bill for a host of entertainment for the family in Denver, as well. Rasmuson said the couple's children are having a ball "living" in the hotel's pool. Synergy also is paying much of the expenses for the Feldermans, who opted to go out of town to visit friends during the operation.
Neighbors, however, are living with the monstrous operation, which has blocked traffic in the middle of 54th Avenue. Detour signs direct them around the next block to get to their homes to the north of the site.
"I'm OK with it," said Ivan Pagel, who lives about two doors to the south of the site. "They came in and were upfront about it and talked to everyone. We were all surprised. They said they were going to be really noisy, but we haven't heard much. We didn't feel the ground shake.
"They're just plugging a hole that no one knew was there."
It helped a bit that a Synergy employee lived in the neighborhood, a familiar face neighbors could trust.
Two houses to the north of the site, Terri Faulkner curled her nose a bit a the diesel fumes emanating from the site. She came back to town the day after the work-over rig — that's the technical term — went up.
"It's a little overwhelming," Faulkner said. "It's pretty intense. My neighbors thought people were shooting guns" when the drilling started.
Most neighbors are in agreement: If the well could become a problem, they'd rather have it fixed.
"I guess there's not a better season for this, and it's not been that much of an inconvenience" to have to drive around the block to get home, Faulkner said.
There is, she said, a constant hum.
Down the block, Jamie Dennis said she thought the site — now a mini industrial complex — was street work at first. She's been amused by the amount of interest and picture taking that has been going on.
"My 3-year-old thinks it's cool," she added.
Synergy originally estimated the entire operation would take until Jan. 20, but Rasmuson said the company is running into some complications that could stretch it into the following week.
"The date is a moving target," Rasmuson said Friday. "Back in the '60s they just threw everything in. We're running into some obstacles as we're trying to get it cleaned out. It will be a little longer than we had hoped."
One silver lining, Rasmuson said, is that minerals from this area couldn't be produced before the advent of hydraulic fracturing and horizontal drilling. Being able to drill from 2.5 miles away is a way around that. Residents in that area could see from 12.5 percent to 20 percent royalties on production.