Erie council to consider Draco mineral-rights deal June 16 after residents seek more scrutiny
Town officials say the proposed deal would exchange Erie’s remaining Draco-area mineral rights for $4.5 million, about 158 acres and future production revenue. Residents have urged council to slow down and seek more environmental review before any vote.
Erie officials have scheduled a June 16 special meeting for the Town Council to take public comment, deliberate and vote on a proposed agreement to sell town-owned mineral rights tied to the Draco oil-and-gas project, according to the town’s meeting notice.
Under the proposed package with SM Energy, Erie says it would receive a $4.5 million cash payment and about 158 acres that the town values at $13.575 million. The town also says the agreement would provide about 2% of production revenue from the Draco project. CBS Colorado has reported that officials publicly estimated the total value could exceed $20 million over time.
The upcoming vote follows extensive public concern at recent meetings. Public comment at Erie’s June 9 council meeting focused heavily on the pending mineral-rights sale, with residents urging more public discussion and environmental review before any deal moves ahead.
The immediate decision before Erie is not whether the Draco project will exist. The Draco well site has already been approved by the Colorado Energy and Carbon Management Commission, according to the town. The question now is whether Erie will sell the remaining municipal mineral interests it controls in the drilling area and accept the negotiated cash, land and oversight terms.
The town’s FAQ says Erie owns about 183 acres of mineral rights associated with the Draco area, including about 80 acres already leased to other entities. The same FAQ says the unleased mineral rights are valued at about $2.3 million and represent roughly 2.7% of total production from the Draco pad.
The exchange documents posted by the town show the deal is structured as a property-and-mineral-rights exchange with subsidiaries of SM Energy tied to a 3,951.25-acre approved Draco oil and gas development plan. A separate related agreement says SM Energy, 7N and Extraction would be jointly and severally liable for defaults under that agreement.
Town officials have argued the proposal is intended to convert Erie’s bargaining leverage into compensation and project concessions after a 2025 state law took effect that the town says bars forced pooling of municipal mineral rights. Town materials say the package would also include commitments to plug certain wells and give Erie inspection access connected to the Draco site.
The town’s FAQ says Erie will not provide water to the oil-and-gas development and that SM Energy will obtain water elsewhere. The same FAQ says on-premises air monitoring matters because Erie has no control over the state-approved well site itself.
Public criticism has been building for weeks. Erie held a dedicated April 21 public meeting to hear comment on a possible mineral-rights sale at the Draco well pad, without a council vote that night. Yellow Scene reported that a June 2 study session drew continued resident questions about groundwater, wastewater, health impacts and the negotiating process.
Residents speaking publicly have raised two broad objections: whether selling the rights would further enable drilling beneath parts of Erie, and whether the town has moved too quickly without enough public discussion of environmental and financial risk. CBS Colorado reported that residents at the June 2 discussion voiced concerns about property values, health outcomes and environmental impacts.
Town officials have framed the choice differently. The town’s FAQ says council may evaluate the proposal through the net present value of Erie’s resources and that leasing instead of selling remained an option during negotiations. Officials’ public materials argue that if Draco proceeds regardless, Erie must decide whether holding a small unleased mineral share serves the public better than exchanging it for land, cash, revenue and site-specific concessions.
What remains unresolved is whether council will accept that argument after the latest round of public pushback, whether members will seek any additional public review before voting, and how much weight they will give to residents asking the town to slow the process. For now, the town has told residents that the June 16 meeting is the time set for public comment and council action on the proposed agreement.