NEWS FLASH 8/19/2026

In a dramatic shift following months of public pushback and legal maneuvering, SM Energy has officially terminated its mineral rights agreement with the Town of Erie.

The Town received formal written notification from SM Energy’s legal counsel on Wednesday, Aug. 19. The unexpected cancellation unravels a high-stakes agreement that would have granted the energy producer access to municipal mineral holdings in exchange for financial compensation, land, and environmental commitments. While the financial aspect of the deal was emphasized as necessary for Erie’s economic future, the guaranteed benefit was a $4.5 million up front, which would have gone directly to Matt Owens, the consultant who brokered the deal. Erie was expected to receive an additional 3% of the production revenue (only after the Draco Pad had recovered 200% of its cost to build), which was estimated to be less than 10% of the town’s annual budget.

The termination follows a wave of community opposition to the proposed Draco Pad project and SM Energy. On June 23, the Erie Town Council passed an ordinance authorizing the original deal in a tight vote. 

However, local residents quickly mobilized against the deal. Opponents launched a citizen-led petition seeking a referendum on the ordinance. By July 28, Town Clerk officials confirmed the petition had gathered the necessary signatures to move forward, effectively putting the council’s decision on hold and setting up a potential public ballot vote.

With SM Energy stepping away, town officials and legal experts are now working to parse the legal and procedural fallout.

The primary question facing town leaders is the future of the referendum itself. Because the petition challenges an agreement that no longer exists, the Town Council may consider repealing the ordinance, ending the process. Alternatively, residents may either withdraw their petition or allow the referendum effort to proceed as long as the ordinance remains on the books.

The Town Council is expected to review the ordinance and evaluate potential next steps during its regular meeting on Tuesday, Aug. 25. Town officials noted that no decisions have been finalized regarding a repeal or alternate council action. Additional updates will be released as legal reviews progress and as ECMC proceedings move forward.

Additional Coverage: What Does “Going Around” Actually Look Like?

YS full coverage of Erie’s Mineral Rights Deal

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