Beth Sultemeier says she knows the U.S. needs to boost its supply of domestic oil and gas. She's not anti-drilling and wasn't opposed to Texas-based Approach Resources drilling an oil well on land her family owns in the mountains east of Tierra Amarilla. They own the mineral rights, she figured, and the company representative seemed nice on the phone.

But when she found out the company bulldozed a grove of aspen and a meadow in the family's favorite box canyon last fall to put in a well pad and an open, lined waste pit, she was shocked. "That's not where we had verbally agreed to put the well," Sultemeier said.

The company's handling of her family's land, she said, has made them the "poster family" for why other landowners in the area are suspicious of dealing with Approach Resources.

Property owners, including the Sultemeiers, are appealing four wells sites approved by the state Oil Conservation Division in the Tierra Amarilla area. A hearing on the appeal is scheduled for 9 a.m. Friday at the state Oil Conservation Division office.

Approach Resources of Fort Worth, Texas, which owns more than 90,000 acres of mineral leases in Rio Arriba County, is suing the county in U.S. District Court in an effort to stop Rio Arriba from enforcing a four-month moratorium imposed this spring. The county is expected to approve a new drilling ordinance in August.

However, Approach Resources contends the power to regulate mineral extractions lies with the state Oil Conservation Division.

Sultemeier, the youngest of six children, said she has acted on behalf of her mother, who owns the ranch.

Company representatives said Sultemeier's mother was offered a contract and compensation for the first of two wells planned on the ranch. But Beth Sultemeier said she received only a letter acknowledging receipt of compensation for the first well and not a detailed contract.

Sultemeier said she spoke numerous times by telephone last year with a company staff member, Brice Morgan. They agreed on a general location for the first test well between N.M. 64 and some cliffs outside Tierra Amarilla.

Company officials confirmed Morgan works for them but declined to have him comment.

Ralph Manoushagian, executive vice president of land acquisition for Approach Resources, said he didn't know what was said between Sultemeier and Morgan, but he said the family was notified about a land survey and invited to visit the site during and after it was staked. "They were invited to participate," he said, "to be out there with the surveyors."

Sultemeier said the family was never invited to see the staked site. She trusted the company would put the well pad in the area she had discussed with Morgan, she said. Her brother discovered what happened, she said, when he went to the ranch last September to picnic in the box canyon for his birthday.

Instead, they found the spot devoid of most of the trees and the meadow. "It's heartbreaking," said Beth Sultemeier, who has since been up to the property to see the site. "Even if they reclaim it, it will never be the same in our lifetime."

Sultemeier claims Morgan subsequently admitted the company's error and Approach Resources sent a second letter and a second compensation payment for the first well site.

The company confirmed it made two payments on the first well site because they thought the first payment wasn't adequate.

"We were trying to work with them," Sultemeier said. "But because we didn't understand how it works, we didn't know what to ask. If they had handled it right on the first (site), it wouldn't have been such a problem on the other wells. Now our situation has scared other people away from dealing with the company."

Sultemeier said the company sent a lengthy contract for the second proposed well site, but she said the family refuses to sign anything until they have seen the new site and everything they want is in writing.

Mineral rights in the West are managed under federal law. In general, for the last century, those rights have superseded surface-owner rights. Basically, anyone who owns mineral rights has the right to drill and extract those minerals, with a state permit.

Last year, the New Mexico State Legislature approved a Surface Owners Protection Act, the first time a law requires oil and gas companies to offer some guaranteed protections to landowners. The legislation was one largely negotiated between ranchers, other private property owners, and members of the oil and gas industry.

"We believe we are going above and beyond (the law) to work with the property owners," Manoushagian said.

A scheduling conference in the Approach Resources lawsuit against Rio Arriba County is scheduled for July 28 with Federal Magistrate Judge W. Daniel Schneider.

Of the 10 projects that Approach Resources is proposing east of Tierra Amarilla, the company said, all will contain and haul off waste in tanks, although its permits give it the right to use open waste pits. An open lined pit is at the first Sultemeier well site, but Manoushagian said the company was going to close it and use tanks instead.

Bob Gallagher, president of the New Mexico Oil and Gas Association, said Approach Resources talked to him about the Tierra Amarilla area and what it needed to consider before drilling there. Gallagher declined to say the exact nature of conversations with the company. In general, he said, "as an industry, we need to become more familiar with the areas in which we operate, understand the culture and the sensitivity of those areas."

Sultemeier claims, along with fellow Tierra Amarilla ranch owner John Sena, that Approach Resources didn't handle things well at the beginning with landowners in the area. "They need to recognize we're not in that business," Sultemeier said. "They're the experts. They know how this works. They need to treat us fairly."

Contact Staci Matlock at 470-9843 or smatlock@sfnewmexican.com.