A temporary drilling moratorium spanning Banning Lewis Ranch in eastern Colorado Springs and enacted by the city has halted certain activity by Ultra Petroleum in the Niobrara Shale area, said Global Hunter Securities analysts in a note to investors December 1.
The ban, expected to be in place through the end of May, covers acreage acquired in the area by Ultra Petroleum for $20 million just this past October.
Elsewhere in the county (El Paso County), Ultra holds leases on nearly 100,000 acres acquired in July and August of this year.
In late September, the county imposed a four-month moratorium on new drilling permits in an effort to carve out time for officials to sort out land use regulations for the industry. Permits to drill three vertical wells in the county, and plans to frac them, had previously been filed with the state of Colorado by Ultra.
“Although this makes up a small portion of Ultra’s position in El Paso County, we are watching this issue closely to see if the drilling ban is extended across the entire county or whether the county decides to work under the framework of the existing state guidelines. Regardless, El Paso County Niobrara development may proceed slowly in early 2012 despite the fact that there has been historic oil and gas drilling in the county,” the analysts concluded.