Thornton sells oil and gas rights for $33.5M to Denver-based investment company
The City of Thornton has struck a multimillion-dollar deal with Denver-based Phoenix Capital Group to sell some of its mineral rights. City officials say the final sale price was $33,541,930.22, and the deal closed on November 4.
The city's communications director, Todd Barnes, tells CBS News Colorado, "Thornton had been following the market for these rights for quite some time and determined it was the right market conditions to sell."
Phoenix Capital Group says it acquired over 4,000 net royalty acres from Thornton, and the purchase is the largest acquisition in the company's history.
"Phoenix Capital Group's company goal is to bring our technology driven and disruptive business model to the oil and gas industry while providing meaningful value increases to mineral owners throughout the United States. This unique approach has benefitted the mineral owner community at large along with the 60+ full-time employees at Phoenix Capital Group," said Brynn Ferrari, Phoenix Capital Group's VP of Marketing. "This business model resulted in success with the Thornton acquisition. We've completed transactions with values from $5-15MM, but $33MM is certainly the largest acquisition to-date and represents one of the most significant single-seller mineral transactions in the DJ (Denver-Julesburg) Basin."
Asked about how the rights will be used, Ferrari said, "the City of Thornton's mineral rights are already leased by a variety of Denver-based operators including PDC, Bayswater, and Civitas. All three operators are currently conducting drilling or production operations across all these lands."
Barnes says the revenue from the sale will go back to the city's water utility, because the rights were on property owned by the utility. He says the money may fund "capital improvements or maintenance of the city's water systems."
One big expense Thornton's water utility is currently evaluating is how to mitigate PFAS — or "forever chemicals" — contamination in the city's drinking water. Asked if the money may help fund those efforts, Barnes said it's far too early to tell.
He says the city council will need to approve any specific plans on how to spend the money.
