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Exactly how much oil are companies trying to pull out of the Huasna Valley?

Think of it like a kid you knew growing up. One day, he moves away, and you don’t see him again until you’re both older, maybe a little wiser. You didn’t really like him that much to begin with, but now he’s different from the kid you knew, and you’re not sure who this new guy is.

click to enlarge EXCELARON’S NEW GERBER BABY :  Huasna Valley residents used to associate Excelaron, a company planning to drill as many as 12 oil wells, with Australian Oil Company Managing Director Grant Jagelman. However, company acquisitions have made the new face of Excelaron United Hunter Oil & Gas Corp. CEO Dr. Art Halleran. Pictured left is Pismo Beach City Councilman and Excelaron Advisory Committee member Ted Ehring. - PHOTO BY STEVE E. MILLER
  • PHOTO BY STEVE E. MILLER
  • EXCELARON’S NEW GERBER BABY : Huasna Valley residents used to associate Excelaron, a company planning to drill as many as 12 oil wells, with Australian Oil Company Managing Director Grant Jagelman. However, company acquisitions have made the new face of Excelaron United Hunter Oil & Gas Corp. CEO Dr. Art Halleran. Pictured left is Pismo Beach City Councilman and Excelaron Advisory Committee member Ted Ehring.

Besides, you never really liked him that much to begin with.

If you live in the Huasna Valley, this may be the relationship you’ve had with Excelaron, the self-proclaimed independent oil company seeking to drill as many as 12 production wells in the quaint ranching community on the southeastern side of San Luis Obispo County.

What began as a proposal by Excelaron to drill four wells under the review of a mitigated negative declaration was adjusted in 2009—in response to community pressure on the company—to four “exploratory” wells, followed by another eight if the first four eke out a profit. This incarnation comes with a hefty 700-page Environmental Impact Report (EIR).

The Excelaron many people loved to hate was originally fronted by Grant Jagelman of the Australian Oil Company, backed by a small team of Cal Poly grads, all crammed into a rarely occupied downtown SLO one-room office. Jagelman has since stepped back. Indeed, the very financial structure of Excelaron itself has been chipped off and resold. These days, the face of Excelaron is actually the CEO of Canada-based United Hunter Oil & Gas Corp., Dr. Art Halleran, who was brought in primarily to handle the more technical aspects of the project.

Even the office location has changed. Excelaron, United Hunter, and Australian oil all now list the same address for the U.S. location as the office for local planning firm Oasis Associates.

Huasna residents—many of whom have banded under the Huasna Valley Association—remain as leery as ever of Excelaron’s assurances that this project will have little impact on their daily lives, or that the drilling will stop at 12 wells. Some believe their fears—namely their concern that Excelaron was only the first step in a larger plan to sell off the company, spread out its oil rights, and begin a much larger oil business in Huasna than originally promised—are already being confirmed.

There’s a key distinction made by Excelaron and its representatives between the oil extraction Excelaron is applying for and the oil it might want later. Effectively, the distinction is that Excelaron is only one company and isn’t affiliated with companies seemingly planning future projects.

United Hunter recently announced to investors that it had acquired a total of 9,051 acres of mineral lease rights from Porter Ranch, another piece of Huasna property near the Mankins Ranch where Excelaron plans to drill. Lease rights are a tricky business, obtuse in almost every way. The Mankins Ranch project, for example, would tap as much as 160 acres of oil underneath the surface from two acres of drilling rigs and equipment above.

Yet United Hunter also bragged to investors that it could drill up to three exploratory wells “as soon as approvals are granted by the county.” The problem is that United Hunter hasn’t applied to drill anything yet. When asked by locals if there are plans to drill, the answer thus far has been a resounding “hey, look over there.”

The same question has been asked over and over again: Does Excelaron have plans to drill more than the 12 wells it’s proposing? And the less-than-satisfying answer to the public has generally been that the company can only drill 12 wells under the existing permit application. Representatives have shrugged off questions about lease rights acquired by United Hunter and other Excelaron affiliates because, in short, those companies aren’t Excelaron.

Except that they kind of are.

Excelaron used to be more closely tied to Jagelman and Australian Oil Company, where he’s the managing director. In the last few years, Excelaron’s corporate holdings have been split among at least a half-dozen different companies. In February 2009, Australian Oil sold some of its share in Excelaron to Mogul Energy International, reducing its holding from 46 percent to 35 percent, according to Reuters. The whole package was eventually enveloped under a Canadian capital pool company, Vesta Capital Corp., which is now United Hunter. Today, United Hunter owns a 65-percent stake in Excelaron’s Huasna project.

At a July 11 public meeting on the EIR, one resident asked why United Hunter was scooping up lease rights in the surrounding Huasna area and what its plans were. Carol Florence of Oasis Associates responded that she couldn’t comment on anything beyond the proposed project.

Then on July 14, the public got as close as it ever has to a straight answer.

Ron Skinner of the Huasna Valley Association asked Halleran, “What’s the 9,000 acres for?”

“Basically the two aren’t related,” Halleran answered, drawing a distinction between United Hunter’s rights and the Excelaron project.

He said there had been no attempt to hide United Hunter’s oil interests, which are public information, and that it’s common practice to purchase lease rights early on while exploring the area, even if only 10 percent of those rights are ever tapped … maybe.

“There’s no plans,” Halleran later answered. “It’s just a concept right now.”

By the grumblings in the room, it was clear people took that answer as an indication more plans are in the works.

Following the meeting, Halleran and Florence told New Times that Excelaron is focused solely on its first four exploratory wells right now. Any future drilling operations, they said, are far too speculative.

“I don’t have the foggiest idea,”
Halleran said of the potential for oil extraction in other areas of Huasna
outside the Mankins Ranch.

There have been some steps locals see as positive. Halleran stressed that the Excelaron project will utilize current technologies to avoid the rotten-egg smell residents associate with older projects like the one in Price Canyon. He also assured that the company won’t get its oil through the controversial and unregulated practice of hydraulic fracturing. Surprisingly, Halleran even acknowledged that he’s fixed up the veritable engineering mess that Mogul Energy left before he took over.

But Huasna residents are still skeptical at best, and remain fervently against oil drilling in their quaint valley.

“This is our lives; this is where we live,” Huasna Valley Association Anna Gabriel said at the July 11 hearing. “… And to have it smell and stink and be polluted, for what? So you can have a nicer car than me? That’s not right.” ∆

 

News Editor Colin Rigley can be reached at crigley@newtimesslo.com.

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