The Crestone Eagle, August 2006:

Baca Wildlife Refuge faces oil exploration—Lexam plans to drill 2 deep test/production wells
by Lisa Cyriacks

Ron Garcia, Baca National Wildlife Refuge Manager, is organizing an informational meeting at the Baca Grande POA (Property Owners Association) building on August 9 at 6:30pm. Lexam Explorations, Inc. has notified the Baca Wildlife Refuge of their intention to exercise their mineral rights and explore for oil on the Baca Grant portion of the Refuge. Ron has already identified several concerns as a refuge manager and would like to gather input from the community about their concerns. This information would be utilized in negotiations with Lexam about the scope and impact of the proposed work.

Lexam is currently proposing to drill two test wells 12,000 to 14,000 feet at sites 7,800 feet and 10,500 feet from the extreme western boundary of the Grants (Baca Grande subdivision). Each site would result in about 2 acres of disturbed land. Also, they are planning a thorough seismic exploration to determine if there are other target sites that may be oil producing. The grid for that activity has not yet been disclosed.

Lexam is currently in the process of applying for the required permits from the Colorado Oil & Gas Commission and Saguache County. Lexam is also currently seeking $3 million in funding on the Toronto Venture Exchange to pay for the costs of developing their rights on the Baca Grant. Lexam has been engaged in oil and gas exploration for more than ten years, and while the company has no direct experience as an operator of oil and gas wells, Lexam’s management team does have significant experience running a large-scale, profitable operation. The independent summary technical review on the Toronto Exchange lists Red Lake Mine, one of Canada’s largest gold mines (in terms of annual ounces of gold produced) as one of their successful projects.

Should the test wells pan out, they will become production wells including all the supporting infrastructure that goes along with processing and storage. Because of the depth of the wells, the oil rigs would be very large due to the fact that the additional weight to drill very deep requires bigger derricks. As part of the site, there would be trailers for the workforce, including geologists, chemistry labs, and safety experts; diesel generators for power; and various pits for holding waste and contaminants. An interesting item to note is that, should the wells go into production, the Bureau of Land Management would authorize drilling on any portions of the refuge outside the boundary of the Baca Grant to allow the government to take advantage of comparable profits.

The Refuge is exploring all options, including legal, that are available to them in order to mitigate the impact of this exploration and test drilling. Surface access and use on the Refuge is provided by Lexam’s ownership of the mineral rights, and is further provided for by a Surface Use Agreement signed by American Water Development Inc (AWDI) in 1992 that is binding on surface owners who are successors to AWDI.

Gary Boyce extended this agreement with Lexam Explorations Inc. in 2002. This agreement is scheduled to expire in 2011, unless Lexam Explorations has achieved production. Solicitors for the Department of the Interior are reviewing and preparing an interpretation of that agreement and the scope of the Refuge’s authority in relationship to the agreement.

The agreement gives the mineral rights owner the right to enter the property for the purpose of exploration, development and mining of minerals found on the property. It also grants the mineral rights owner the exclusive right to determine the extent of activities on the property, and to construct roadways for access.

Ron is also compiling a list of negotiable items to bring to the table. He has already made the request twice to relocate the wells further west due to concerns about ecologically sensitive riparian areas and the wet meadows. Each time Lexam’s staff has carried the request back to the scientists and, the first time, complied with his request. He is hoping to be able to request that Lexam use a closed loop system that gives more protection to the land, water and especially birds. A closed system utilizes a tank rather than an open pit to contain waste and contaminants, and would result in less disturbance to the soil and easier cleanup of the site.

Ron is committed to minimizing the impact of this exploration and keeping the process as environmentally friendly as possible, given the limitations presented under pre-existing agreements. He is requesting the community’s assistance as he enters into negotiations with Lexam’s representatives. If you are unable to attend the meeting, but have concerns or information to share, you can reach Ron at the Baca Wildlife Refuge office at 719-256-5527 or by email: ron_j_garcia@fws.gov.

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