County files motion to lift stay
Company moving forward on project as appeals hang in limbo due to bankruptcy
As par t of its ongoing efforts to prevent oil and gas wells from being drilled on property near its border with Weld County, Boulder County on Wednesday filed an emergency motion requesting that the a cour t lift a stay on pending litigation between the oil and gas company and the county.
A hearing regarding the emergency motion involving Extraction Oil & Gas has been scheduled for Nov. 6 in Delaware bankruptcy court, where the oil company in June filed for Chapter 11 bankruptcy. The Denver-based company, which is spearheading the Weld County drilling project, is incorporated in Delaware. Its bankruptcy allows the company to reorganize and issues an automatic stay on pending litigation.
However, given the “imminent drilling plans,” Boulder County wants a judge to lift the stay so its appeals on two lawsuits the county filed challenging Extraction’s legal rights to drill on the protected property can more forward.
” … They have different legal bases, but both relate to these same projects,” Boulder County Senior Assistant Attorney Kate Burke said of the lawsuits.
The county chose to file the emergency motion after a Boulder County resident informed county officials that Extraction Oil & Gas intended to begin construction on 21 oil and gas wells as soon as Nov. 11. A letter from Extraction to landowners near the drilling site — that’s included in the cour t documents — explains the company’s plans to drill wells at the northeast corner of Weld County roads 1 and 20. The 2,720-acre drilling unit is south of Longmont and east of Boulder County.
Boulder County has long been concerned about the potentially hazardous impacts of oil and gas development. As par t of its stated commitment to increasing local control over mitigating those impacts, the county has renewed a moratorium on staff accepting or processing new oil and gas drilling applications several times since initially enacting it in June 2019. It lasts through the end of the year while the county works to update its regulations.
Additionally, Boulder County purchased a conser vation easement on the property where Extraction intends to drill since it’s a valuable agricultural proper ty located at the confluence of two water ways.
“A conser vation easement gives us the right to prevent development and protect the property,” Burke said, adding that the county also owns mineral rights on the property.
Once land is damaged, there is no going back, Burke said. For that reason, she is hopeful the judge will move quickly.
Prior Camera reporting references Boulder County’s belief that the oil and gas leases prohibit the exceedingly large unit that Extraction subsidiar y 8
Nor th initiated. The county also alleges that 8 Nor th’s proposed 32-well pad site will violate the protections in the conser vation easement that the county owns over the site in Weld County.
The oil and gas company and Boulder County filed competing motions, both arguing they were entitled to a ruling in their favor based on the legal interpretation of the leases and conser vation easement. The court issued an order agreeing with 8 North that establishing the drilling and spacing unit does not breach the leases and that the proposed well pad does not violate the conser vation easement. The county appealed this decision, and it is in limbo in the courts due to the bankruptcy-related stay.
Extraction spokesperson Brian Cain said in a statement that the company’s oil and gas leases long predate the conser vation easements on the property, and he noted the district cour t agreed that Extraction had the right to drill the mineral property in accordance with approved state permits.
Plus, Cain said “completion operations” won’t be conducted until after a judge issues rulings on the county’s appeals.
“At this point, Extraction is only planning on initial work at the drill site,” he said.
Had it not heard from a resident, Boulder County might not have known about Extraction’s plans to move for ward with construction, but the company was not required to notify it since it holds a conser vation easement but does not own the land.
Indeed, the Weld County Oil and Gas Location Assessment process requires a notice of a proposed oil and gas location be sent to building unit owners or residences within 1,000 feet of the location, Weld County Communications Director Jennifer Finch confirmed. Weld County’s website notes properties outside of the 1,000 foot zone will not receive notification of the planned development.
“We notified our neighbors and the local government that has jurisdiction over this property, Weld County, which is in full compliance with state regulator y requirements,” Cain said.
Still, Burke said Extraction could have opted to notify Boulder County as a professional courtesy.
“They know on no uncer tain terms that we are extremely interested in protecting this property and in this whole issue,” she said.
“It is shocking that Extraction would attempt to proceed with drilling on our conser vation easement property while its legal rights to do so are in question,” Boulder County Commissioner Elise Jones said in a news release.
Boulder County obtained legal representation in Delaware, but Burke said she’s not cer tain of the county’s chances in next week’s hearing.
“We’re hopeful, I’ll say that much,” she said.