Drilling Permits Backlogged

Record Numbers Cause Delays in Utah

New efforts are under way to provide better access to oil and gas resources in Utah now that drilling activity and permit applications have increased dramatically.

Kent Hoffman, deputy state director of lands and minerals in the Utah state office of the Bureau of Land Management, said his office has seen significant increases in permit applications for drilling as well as interest in energy related rights-of-way and unconventional energy resources such as shale and tar sands.

He said Utah has a myriad of opportunities for petroleum exploration and development.

Efforts to permit more access include preparation of new land use plans, environmental impact statements and proposals for research and development leasing of oil shale, he said.

"We recognize access as being fundamental as we try to make resources available," he said. "Access ranges from the planning stage, where we make allocations in our resource management plan for leasing and development, down to the physical access, like getting a road in.

"Utah certainly has some topographical and archaeological challenges," he added.

Hoffman, who was a speaker at the recent AAPG Rocky Mountain Section meeting in Jackson Hole, Wyo., said that some of the federal legislation that can present obstacles to drilling in the region includes compliance with the National Environmental Act and Endangered Species Act.

Recent case law relating to the National Historic Preservation Act also affects development in Utah, he said, because "most of the concerns we have are the prehistoric Indians and artifacts here."

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New efforts are under way to provide better access to oil and gas resources in Utah now that drilling activity and permit applications have increased dramatically.

Kent Hoffman, deputy state director of lands and minerals in the Utah state office of the Bureau of Land Management, said his office has seen significant increases in permit applications for drilling as well as interest in energy related rights-of-way and unconventional energy resources such as shale and tar sands.

He said Utah has a myriad of opportunities for petroleum exploration and development.

Efforts to permit more access include preparation of new land use plans, environmental impact statements and proposals for research and development leasing of oil shale, he said.

"We recognize access as being fundamental as we try to make resources available," he said. "Access ranges from the planning stage, where we make allocations in our resource management plan for leasing and development, down to the physical access, like getting a road in.

"Utah certainly has some topographical and archaeological challenges," he added.

Hoffman, who was a speaker at the recent AAPG Rocky Mountain Section meeting in Jackson Hole, Wyo., said that some of the federal legislation that can present obstacles to drilling in the region includes compliance with the National Environmental Act and Endangered Species Act.

Recent case law relating to the National Historic Preservation Act also affects development in Utah, he said, because "most of the concerns we have are the prehistoric Indians and artifacts here."

Applications for drilling permits in Utah this year are expected to rise to a record of just under 1,000. However, there will be a backlog of 400 applications that have yet to be acted on, Hoffman said.

"It will still be a six-month backlog," he said. "It's a record number -- we can't keep up with them."

In comparison, the state approved 500 drilling applications in 2003 and 700 in 2004, he said.

More than 90 percent of the current applications deal with the Uinta Basin.

Infield drilling for secondary oil recovery and exploration and production of deeper gas in the area has piqued interest in the region, he said.

"It's an old field (40-50 years old) but we're getting a double whammy there," he said. "Its production has been sporadic in the last four to five years, and it got very active in the last two and a half years. It's a good solid producing basin. But lately we've seen an exponential interest in secondary recovery and seismic geophysical exploration.

"New discovery of deeper gas also has piqued interest," he added.

Covenant Field Update

Along with the Uinta Basin, the big news in Utah has been the Covenant Field discovery in central Utah (April EXPLORER). Even though so far production is limited to just a couple of wells, Hoffman agrees that it is a "very significant discovery for increasing the energy supply."

He also noted that the Covenant play is in an area where the BLM's office lacks the skills and expertise to be readily available -- it's "definitely a new area for production and permitting."

Wolverine Energy made the discovery of the new Covenant Field in Sevier County in May 2004, said Tom Chidsey, petroleum section chief for the Utah Geological Office, part of the state's department of natural resources.

"Since then, they're up to seven wells and one is a dry hole," Chidsey said. "They're producing from two wells now and the field averages 1,500 barrels of oil a day.

"They're building some additional production facilities for the remaining wells but they won't be completed until September," he added. "Once those are in place, then they will complete the remaining wells. Production could go up to 20,000 barrels a day."

Chidsey noted that the Covenant Field is located on private land as well as BLM land and on state school trust lands.

"Wolverine has stated it is delineating 25 additional targets as wildcat prospects, besides what they're developing in Covenant Field," he said.

He noted that obtaining drilling permits for federal land is more difficult than on state or private land.

"At least the east portion of this land does not involve forest land, but the western portion of the play involves some forest land and that becomes more difficult to drill in," he said.

However, none of the land is located near a national park.

"There are other areas in Utah that are more environmentally sensitive," he said. "At this point the new discovery has not had a significant impact on Utah, but it has the potential to be very significant if the play pans out -- if some of those 25 prospects turn out to be discoveries. It could have a huge impact on Utah's oil production.

"However, sometimes we get a one-field wonder with a big discovery like this and then never find another one," he said.

Chidsey noted that other companies are exploring in the region, too, and leasing activity has picked up.

"Right now what we're seeing is a lot of leasing, not drilling. They're just development wells now," he said.

Chidsey added that some farmers currently are getting as much as $1,000 an acre for drilling rights in the area.

"In central Utah there have been as many as 25 wells drilled in the past 50 years looking for what Wolverine has found," he said. "It's a hot leasing play. Basically it was dead for leasing and drilling here before this."

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