Homeowners who receive a contract asking to lease mineral lights on their property should start by contacting their realtor to learn what they actually own.
That’s according to Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners (CAMRO), who was responding to a recent situation in which residents living in Willow Trace were sent contracts from an energy company inquiring about leasing their mineral rights.
Willow Trace is a subdivision in Arapahoe County near E-470 and East Quincy Avenue.
”First thing [residents] should be doing is identifying whether they own whatever that contract explains they own," Ray said. "You can talk to the real estate agent you bought your home from to see, 'Where in the world did this come from?'"
That’s exactly what Kayla, a resident of the neighborhood, said was her first step after receiving a contract from Aspired Energy asking to lease her mineral rights. 9NEWS is honoring Kayla’s request not to share her last name.
Kayla said she originally thought the contract was a scam, but realized that was not the case after the Willow Trace Homeowners Association called a town hall to talk about residents’ options.
Matt Sura, an attorney that specializes in the mineral rights of homeowners, presented at the meeting, breaking down what was in the contract and the next negotiating steps residents could take.
"I was very shocked to learn that Arapahoe County is now going to be a place that they're going to start speculating and looking to start fracking,” Kayla said. "We all started realizing, 'This is real, so what can we do now?'"
Aspired Energy is a land service company that works on behalf of an operator. The company said it's in the very early stages of the project and that a permit has not yet been issued. Aspired Energy also would not share with 9NEWS which company they represented.
A map from the Colorado Oil and Gas Conservation Commission shows current and pending project locations, including Willow Trace.
"I'm trying to reach out and get more information as a property owner what our rights truly are and what options…we have here," Kayla said. "Now, I really feel like I need to start educating myself, because it's showing up at my doorstep."
Ray said a real estate agent can help homeowners sort out their mineral rights, and that talking to neighbors and hiring a lawyer as a group should be the next step.
"You're in a position to negotiate better," he said.
If there are wells already producing near a neighborhood, land there is even more valuable because it’s proven to be productive, which typically means homeowners have more bargaining leverage, according to Ray.
Ray added that there’s no rush to completing these steps.
"Time is not of the essence in something like this," Ray said. "You may get pressured to sign because all of your neighbors are signing, but take your time. There's no reason to sign any kind of a document like that until you're completely educated."
Kayla said negotiating her mineral rights isn't something she expected to do when she moved into her home late last year.
"Regardless, if you got a letter like this, whether you like fracking or don't like fracking, it's coming to this area," she said.
If one homeowner signs and his or her neighbor doesn’t, the company can still extract minerals in a process called forced pooling. Forced pooling is a controversial legal tool in which drillers gain access to minerals beneath private property because it allows them to extract minerals from a large area – or “pool” – if leases have been negotiated for a certain percentage of that land.
The homeowners who didn’t sign would still get a check, but not for the full amount that was offered in the initial contract, Ray said.
