All right, with that, I'm gonna call to order the town council meeting on June 2nd, 2026.

This is a study session, and we have one item to discuss tonight, and that is the potential sale of the town's mineral rights.

Um and with that, I've got a few comments uh logistically that'll probably be um important to many people here.

First, um we're not gonna be making any decisions tonight.

Um if we come we come out of the study session and we um and there's no major changes or anything, it will come back to us on June 16th for discussion, public input, and a decision would be uh made at that particular meeting.

The terms of the agreement were settled today, and so um it is back in our attorney's hand.

Um who will be looking through it um tomorrow.

Uh the goal is to publish the actual agreement as soon as that's possible with a an ability to put questions attached to it so that we can gather additional um feedback from the community on the actual agreement.

We're also working on a QA document uh for all the questions that have been asked.

It'll be updated based upon the discussion here tonight.

Uh so the goal is to also get that published this week as well.

Um for tonight's meeting.

Um we are also gonna have the opportunity for the audience to ask questions that have not already been asked.

And so uh Debbie is here, she's got uh note cards or posted, she's gonna hand them out.

And what I'd like you to do is write down your questions, even write them down now, one question per per card.

And then when we get to the end of the meeting, I'll ask, are you holding any questions that were not asked tonight?

And if um they weren't asked, then we'll collect those and we'll do our best to work on that and get those answered tonight as well.

Okay, with that, I think I'd like um everybody at the table here to introduce themselves tonight.

Maybe the council members can just also say what district um you represent.

Um and then uh we'll launch into the presentation uh with Mr.

Franks.

John Mortalaro, uh council member district one.

Matt Owens, I'll meet a mineral advisors.

John Sullivan, Sullivan Green, TV Jarvis.

Outside counsel for the town.

Council member district two.

Uh David Frank, I'm the director of environmental services for the town of Erie, and I'm also a resident of district two.

Brian O'Connor, Council Member District Three.

All right, and if I didn't say it earlier, I'm answering more on the mayor of the town.

All right, with that, I'll turn it over to Mr.

Frank.

All right, uh, thank you so much, Mayor and Council members.

Uh so uh this will be a lot of this material is is the same as we discussed a couple of weeks ago uh in the open question and answer format.

Um but we want to review it here again.

Uh there's also a lot of new information.

Um thank you, John and Brina for making some of this available uh this afternoon.

So um quick quick recap.

Uh I first heard uh about Draco probably would have been early to mid-2023.

Um obviously uh there was a lot of work by the operator um well before um I or Weld County uh heard of that, but I was informed that there was an application uh to Weld County for a facility just outside of Erie.

Um that began conversations with uh then civitas, uh now SM Energy Um about what that facility would look like.

Um what engineering control would be present, uh etc.

Well County heard that application in February of 2024.

And then it was brought to ECMC that fall.

So October, November of 2024.

They ultimately made a stay.

Oh, sorry.

The Energy and Carbon Management Commission, formerly COGCC, the Colorado Oil and Gas Conservation Commission.

It's the portion of the Department of Natural Resources at the state of Colorado that oversees oil and gas regulation and production.

And that is the permit to construct and operate the surface facility, which is which included 26 wells, associated separators, other equipment at that location, which is just outside of Erie's municipal boundary.

After that, then the state's procedure is uh is to then get into the what happens underground, and that's through a form two, uh, which is an application for permit to drill.

Those have not yet been filed because prior to those being filed, you have to go through what is called pooling, which is to pool the mineral interests that was defined in the spacing unit.

Um, obviously, oil and natural gas are liquids and they flow.

So it's not like hard rock mining where you can mine this property and not that one.

There's a certain area of influence to these wells.

Uh, and so in the state of Colorado, other states do this differently, but in Colorado, um, within the spacing unit, the operator is obligated to demonstrate that at least 45% of the mineral interest is uh either within either owned by the operator or leased to them.

Uh sometimes that's through a sub-lease from another oil and gas company or or uh mineral rights holder.

Once you've achieved the bar of 45%, uh the other up to 55% can be what's called force pooled, uh, provided that they have been offered fair lease terms.

So everyone with mineral rights has to have been given the opportunity to lease or sell their minerals.

Um if they decide, hey, these lease terms aren't aren't good enough, or for principled reasons, I don't want to sign this agreement, then you can be what's called force pooled, which is um there is a standard agreement that the state of Colorado has defined that says these are the terms under which your mineral rights will be produced and you will be compensated.

In January of 2024, legislation went into effect in the state of Colorado, which restricts uh force pooling of local government owned minerals within the jurisdictional boundary of that local government.