Lowry Ranch CAP

Lowry Ranch is a proposed oil and gas project in Arapahoe County, Colorado. Crestone, a subsidiary of Civitas Oil and Gas, submitted the Comprehensive Area Plan (CAP) to the Energy and Carbon Management Commission (ECMC) in late October 2022. Civitas submitted a revised project plan in April 2023 and a final submittal in January 2024. A CAP is a holistic, consultative process for planning and permitting locations for the production of oil and natural gas in Colorado. The ECMC is the state body that regulates oil and gas development in Colorado.

The ECMC’s mission is to regulate the development and production of oil and gas in a manner that protects public health, safety and welfare, including protection of the environment and wildlife resources. Because the CAP process supports this mission, ECMC is encouraging oil and gas operators to develop and submit CAPs for review, rather than taking the traditional approach of permitting one oil and gas location at a time.

The Lowry Ranch CAP is a proposed 32,000-acre, 10-surface location, 166-well comprehensive area plan in unincorporated Arapahoe County. All of the surface locations are on State Land Board property, with only two building units located within the entire CAP boundary, and the closest existing neighborhood are more than 3,000 feet away from any pad location. The Lowry Ranch CAP surface locations are all located east of Monaghan Road.

The CAP approach results in fewer well sites, less land disturbance, better consideration of cumulative impacts of energy production and more protection for disproportionately impacted communities.

The map represents the total area developed by the project. Via long reach laterals, Civitas will develop this area from a limited number of surface locations, concentrated on the Lowry Ranch. Each surface location is more than 3,000’ away and down-gradient from the Aurora Reservoir, which means in the unlikely event of a spill, fluids would flow away from the reservoir.

After collecting more than 10,000 air samples from Colorado operations, a 2017 CDPHE study found all measured samples in communities near Colorado energy producing regions were within health guidelines. The state subsequently collected about 5,000 additional air samples near well pads, but did not measure concentrations above what the state would expect to cause a short or long term health impact. In 2019, CDPHE conducted another health risk study informed by their previous data collection. The study’s model predicted a hypothetical, extremely rare worst case scenario could present the potential for short term acute impacts. Well pads in our Lowry Ranch CAP meet and exceed these standards, with the shortest setback at 3,000 feet away from any wells.

The State of Colorado through the Colorado State Land Board (CSLB) owns the Lowry Ranch. With a long history of recreation, ranching, and other industrial uses, CSLB has a fiduciary duty to manage these lands and resources to generate revenue, which benefits the state’s K-12 students.

Established in 1938, the 100-square-mile former Lowry Bombing and Gunnery Range was used during World War II as a military training site.

The Federal Government transferred ownership of most of the range after 1963. Today, the range is owned by a variety of public and private landowners, the largest of which is the CSLB (roughly 22 square miles).

CSLB owns, stewards, and leases four million acres of Colorado trust land in order to leverage those investments into our public schools. CSLB has a Constitutional mandate to manage these lands and resources and a fiduciary duty to achieve a reasonable and consistent return on their assets to benefit the State’s public schools and children. CSLB spends millions of dollars every year through grants to support our public schools needs from building improvements to technology needs and safety infrastructure.

In 2012, ConocoPhillips paid $137 million to CSLB to lease oil and gas resources underlying 21,048 acres of Lowry Ranch land. In 2020, Crestone Peak Resources acquired this lease and existing facilities and infrastructure from Conoco. In 2021, Civitas Resources acquired Crestone Peak. Revenues derived from these original oil and gas lease payments have helped fund new school construction and the state’s K-12 system.

Civitas is committed to responsible oil and natural gas production and to finding solutions, making investments, and adopting new technologies to safeguard public health, the environment and quality of life for all Coloradans. As part of this commitment, we are adopting new technology to improve air quality. This includes:

• Deploying real-time, continuous air quality monitors.

• Using a vent-free, fully-enclosed flowback process to capture temporary natural gas emissions coming from a well before it goes into production and directing this gas to a pipeline to be transported offsite, rather than vented or flared, reducing any potential impact on air quality.

In 2017, the Colorado Department of Public Health and Environment (CDPHE) published its review of over 10,000 air measurements of over 50 different oil and gas related volatile organic compounds (VOCS) collected between 350 and 3,700 feet from well pads during different operational phases, and also conducted a review of hundreds of studies looking at associations between oil and gas and health effects. Subsequently, it has collected over 30,000 community air measurements near well pads. The analysis of these tens of thousands of air measurements showed all remain within health guidelines.

The protection of water resources in relation to oil and natural gas development has been studied extensively for decades and is actively regulated by environmental officials at all levels of government. All Civitas projects meet and/or exceed water standards set by the Colorado Oil and Gas Conservation Commission (COGCC). Civitas operates at the highest standards to protect water quality in Arapahoe County and the rest of its operating area.

Prior to drilling, the company measures water tables to monitor impact, then uses a protective casing and cement around wells past the water table. Monitoring wells are tested on a prescribed cycle to ensure local freshwater resources are protected. Water quality is tested prior to drilling to establish a baseline, and monthly testing continues throughout the drilling and completion phase. Finally, Civitas conducts a test six months after production as a last method of verification to ensure the integrity of its operating assets.

The company reduces water use through numerous efforts, including the use of tanks and temporary collapsible water pipelines to minimize unnecessary water evaporation. At sites where water collection infrastructure systems are available, Civitas reverses piped water disposal systems to enable water reuse. When water is disposed, Civitas uses saltwater disposal (SWD) wells provided by a third party.

Consistent with regulatory requirements and industry best practice, Civitas discloses its hydraulic fracturing fluid ingredients at FracFocus.org.

Civitas is Latin for “community”, and this defines our steadfast commitment to our stakeholders. Civitas launched with a focus on community support and collaboration and we’re continuing to strengthen our relationships with neighbors every day. We are proud to support organizations that tangibly impact the lives of our closest constituents.

Through the Civitas Community Foundation, we are proud to invest in the Colorado communities where we operate. In the first quarter of 2023 alone, more than $300,000 has already been committed to support community organizations.:

Civitas focuses giving in the following priority pillars:

Q&A

What is a Comprehensive Area Plan?

A Comprehensive Area Plan (CAP) is a holistic, consultative process for planning and permitting locations for the production of oil and natural gas in Colorado by the Colorado Oil and Gas Conservation Commission (COGCC), under COGCC Rule 314.

The COGCC’s mission is to regulate the development and production of the natural resources of oil and gas in Colorado in a manner that protects public health, safety, and welfare, including protection of the environment and wildlife resources. Because the CAP process supports this mission, COGCC is encouraging oil and gas operators to develop and submit CAPs for review, rather than taking the traditional approach of permitting one oil and gas location at a time.

The CAP approach can result in fewer well sites, less land disturbance, better consideration of cumulative impacts of energy production and more protection for disproportionately impacted communities, compared with the traditional oil and gas development approach.

Why develop a Comprehensive Area Plan (CAP)?

In 2021, the legislature created the CAP process through SB-181 to promote thoughtful, landscape level development and eliminate unnecessary infrastructure. This approach to oil and natural gas planning focuses on larger geographic areas in order to reduce overall land disturbance and efficiently plan. By focusing on larger, long-term planning areas, Civitas can install impact-reducing infrastructure - thereby reducing land disturbance and can take a methodical approach to operations – in order to reduce the cumulative impacts. Civitas has committed to a 50% reduction of CO2e emissions by 2027, and the Lowry CAP will help achieve those goals.

Has anything like this been done before?

Yes. Crestone Peak Resources, now a subsidiary of Civitas, was the first company to submit a CAP in 2021. It was approved in November 2022 and covers all of Crestone Peak’s existing and future operations sites in Aurora. Moreover, Civitas is one of several operators in Colorado currently using this approach. The Colorado ECMC has approved three CAPs to date.

Where will the wells be drilled?

The oil and natural gas wells that will be used to develop these leases will be sited east of Monaghan Rd., and more than 3,000’ from any neighborhoods, as shown in orange on the map.

Will the Aurora Reservoir be impacted?

No. More than 7,500 feet of rock, including multiple impermeable “seal” formations, exists between the reservoir and oil and gas resources. COGCC regulations are designed to protect water quality in areas being used for oil and gas development. State regulations require that all wells are constructed with a cemented surface and production casing extending 50 feet below the base of the freshwater aquifer to isolate groundwater from the hydrocarbon zone. In addition, Civitas will perform groundwater sampling tests within half a mile of the drilling site before and after drilling operations to verify that there is no contamination.

Decades of research, real-world observation and regulatory oversight shows that the fracturing process is not a threat to drinking water sources below the surface or on the surface. A comprehensive study sponsored by the U.S. Department of Energy determined the risk of the fracturing process impacting groundwater to be less than 1 in 200 million.

How deep will Civitas Resources be drilling in this area?

The productive segments of the wellbores (including all hydraulic fracturing) will occur within the Niobrara Formation, approximately 7,500 - 8,000’ below the surface.

What are horizontal drilling and hydraulic fracturing?

Horizontal drilling is a commonly used technique in onshore United States operations for development of our minerals. An operator will build a consolidated surface site, drill wells vertically down to the target hydrocarbon-bearing formation, and then turn those wells horizontal and drill three miles or more. This technique has the advantage of dramatically decreasing the surface imprint relative to traditional vertical drilling.

Hydraulic fracturing is a step in the production process used to free the oil and gas reserves trapped in shale formations over a mile underground. It is frequently used in conjunction with horizontal directional drilling. After drilling, the operator injects a mixture of water, sand, and other ingredients at high pressure into the well to create small fractures in the shale formation and to release the gas trapped inside.

This process has been safely used in the United States since 1947—including tens of thousands of permitted wells in Colorado.

For more information, go to coga.org/factsheets.For more information, go to coga.org/factsheets.

The permit applicant is Crestone Peak Resources, and some leasing activity is being undertaken by Axis Exploration. Who are they?

Axis and Crestone Peak are wholly owned subsidiaries of Civitas Resources.

When would you start this project?

Civitas is requesting a six-year duration for the Lowry Ranch CAP, with successive, geographically distinct operations commencing in 2024, and concluding by 2029. The productive life of the wells is anticipated to be 20-25 years.

Are local officials aware of this project and leasing effort?

Yes, Civitas has and will continue to both brief and receive feedback from state and local elected officials and staff.

What are the benefits of signing a mineral lease if I own mineral rights?

In the short term, the main benefit to you is a one-time lease bonus payment. Once signed, there is the potential for long-term financial benefit through a royalty interest. Meanwhile, Colorado schools, police and fire will benefit from significant new tax payments from oil and gas operations, in addition to the State Land Board trust funds generated.

I heard the Lowry CAP application been withdrawn, what is the status?

The application is still pending review by Colorado ECMC staff.

What are the next steps for this project?

The application is still pending, and will be considered at hearing in 2Q2024. Civitas submitted its CAP application in late 2022 to the Colorado Oil and Gas Conservation Commission (COGCC) for review by COGCC staff and submitted a revised project plan in April 2023, and a final filing in January 2024. Civitas will continue to engage with the community and local and state agencies on the project.

Lowry Ranch CAP

Lowry Ranch CAP Application - Informational Meeting

Lowry Ranch Fly Through Video

Overview & Location

CAP-Area Boundary

Adhering To Stringent Setbacks

The Lowry Ranch

Estimated Community Financial Benefits

Air Quality – Air Monitoring

Ground Water Protections

Best-in-Class Operations and Mitigation

Community Impact

Q&A