By Denver Business Journal

Ultra Petroleum Corp. has completed its $20 million purchase of 18,000 undeveloped acres of the Banning Lewis Ranch on the east side of Colorado Springs, and has begun plans to drill in unincorporated El Paso County.

The Houston-based energy company (NYSE: UPL) closed on the purchase of the ranch on Tuesday, spokeswoman Kelly Whitley said Wednesday.

The company is negotiating with city officials over its plans for oil and gas operations on the ranch, Whitley said.

The company and the city have been at odds over whether the cityâ¿¿s existing master plan for the ranch and other agreements should dictate future oil and gas operations on the ranch. Plans for the ranch, annexed by Colorado Springs in 1988, have included 75,000 homes and 180,000 people. Ultra bought the undeveloped part of the ranch after its previous owners filed bankruptcy.

And the company has filed three requests with the Colorado Oil & Gas Conservation Commission asking the agency to review three locations in El Paso County as possible drilling sites, according to the COGCCâ¿¿s website.

The locations are east and southeast of Colorado Springs â¿¿ in unincorporated El Paso County, according to the COGCC.

But Ultra doesnâ¿¿t anticipate any delays in its activity due to the countyâ¿¿s three-month moratorium on drilling applications, Whitley said.

El Paso County Commissioners on Sept. 29 voted in favor of the moratorium to give county officials time to review and update the countyâ¿¿s rules governing oil and gas operations. The commissioners are expected to review and vote on new rules in early January.

State rules, in general, address well sites and drilling activity while local government rules can address off-site activities such as trucking routes and noise control.

⿿We haven⿿t found it [the moratorium] to be an impasse for us,⿝ Whitley said. ⿿We understand they want to take a step back and review their rules. We⿿ll work with the county officials.⿝

If the COGCC approves Ultraâ¿¿s general well locations â¿¿ each of them seven to eight acres in size â¿¿ the company then will ask the COGCC to approve more specific plans for individual wells.

El Paso County hasnâ¿¿t had much oil and gas activity to date. Of Coloradoâ¿¿s 46,000 active wells, only three are in El Paso County, according to state records.

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