Upper Hoback project makes headlines in PXP's hometown

Buyout talk amid Wyoming Range gas drilling plan

By MEAD GRUVER Associated Press © 2010 Houston Chronicle

Dec. 2, 2010, 3:52PM

CHEYENNE, Wyo. — A new conservation strategy could debut in Wyoming as a result of a company's preparations to drill gas wells in the Wyoming Range.

Environmentalists are talking about buying out drilling leases in the western Wyoming mountain range. Lease buyouts have occurred elsewhere in the past few years — namely along northern Montana's Rocky Mountain Front — but not in Wyoming.

The Wyoming Range Legacy Act signed by President Obama last year prohibits new leasing on 1.2 million acres in the Wyoming Range. The act allows voluntary buyouts of 77,000 acres of existing leases in the area.

The first buyout opportunity under the act appears to be a Houston-based Plains Exploration and Production Co. proposal to drill 136 gas wells. The company's leases date to the mid-1990s and are among those grandfathered in under the act.

The wells would go in a few miles south of Bondurant in the upper Hoback River drainage. Bridger-Teton National Forest officials expect to release a draft plan for the drilling in a week or two.

The project is farther along than any other drilling proposal in the area covered by the Wyoming Range Legacy Act.

A PXP spokesman and groups that have worked to shield the Wyoming Range from development said they're waiting to see the plan before considering in detail a lease buyout or donation of the leases.

The process would work much like a conservation acquisition by The Nature Conservancy or some other group, said Dan Smitherman, spokesman for the group Citizens for the Wyoming Range.

"This would just go back to the public as part of the national forest," he said.

The Wyoming Range Legacy Act gives PXP the right to drill — environmentalists recognize that — yet offers alternatives, said Lisa Dardy McGee, national forests and parks program director for the Wyoming Outdoor Council.

"It kind of envisioned this very scenario, that holders of leases here would hopefully make the calculation that Congress and the citizens of Wyoming have seen this area as really valuable," she said.

Only a few exploratory wells would be drilled at first, followed by others if those wells are productive, said PXP spokesman Scott Winters.

The scope of drilling would be modest compared to the nearby Jonah and Pinedale Anticline fields, he said. It would be guided by more than five years of environmental review and public input.

"While PXP always considers all economically viable options, any discussion of a lease buyout is premature," Winters said by e-mail.

In Montana, groups such as Trout Unlimited and the Coalition to Protect the Rocky Mountain Front have coordinated the buyout or donation of gas drilling leases covering 120,000 acres in recent years, said Jen Ferenstein, Rocky Mountain Front outreach coordinator for The Wilderness Society.

Buyout details, including the amount paid, have remained confidential.

"The leases were always sitting out there," Ferenstein said. "And while they were out there, they were highly controversial in an area where people didn't know what they would do."

The upcoming release of the draft drilling plan in Wyoming will open up a 90-day period during which the public will have an opportunity to comment on the project.