Mineral owners assert property rights in Colorado’s oil and gas fight

OilPumpBy John Aguilar – The Denver Post – March 6, 2016

LA SALLE — The devastating floods of 2013 sent water from the South Platte River cascading across Chuck and Roni Sylvester’s farm and into their home, creating a high-water mark 17 inches above their baseboard.

The damage to the couple’s house on the outskirts of La Salle was $250,000 — an amount that could have led to financial ruin for the 78-year-old semi-retired farmer and his wife had the 11 oil and gas wells on his 200-acre property not been spinning off a consistent stream of royalty income year after year.

“Having those royalties made it possible to repair my house,” said Chuck Sylvester, who bought his home — and the mineral rights underneath it — from his mother in the early 1970s.

But Sylvester and more than half a million mineral rights owners like him in Colorado increasingly feel like their underground assets are under attack as communities opposed to oil and gas exploration call for temporary drilling bans or well-siting restrictions.

Compounding their troubles has been a dramatic drop in the price of oil — from more than $100 a barrel in mid-2014 to around $35 a barrel Friday. Michelle Smith, president of the Colorado chapter of the National Association of Royalty Owners, said royalty revenue has plummeted up to 70 percent in some cases.

“We are all having to tighten our belts just like industry and reduce expenses,” she said. “It is most difficult for those who are on a fixed income who depend on their royalty checks to survive.”

The upshot: Mineral owners are fighting back more ardently than ever.

At a contentious meeting in Adams County in January that carried on until the early-morning hours, several mineral rights owners stood up before the commissioners and lambasted a proposed 10-month drilling moratorium as an abrogation of their property rights.

Continue reading story at The Denver Post

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