Boulder County is asking the Colorado Supreme Court to overturn a state Court of Appeals ruling that said two of the county’s oil and gas leases remained valid despite four-month gaps in oil and gas production.
The case — Board of County Commissioners of Boulder County v. Crestone Peak Resources Operating, LLC — is a critical state-wide issue, said Senior Assistant County Attorney Kate Burke.
“Oil and gas leases stay valid as long as production continues,” Burke said in a news release. “But what does the word ‘production’ mean? The Court of Appeals said production includes shut-in wells that yield no oil or gas, meaning operators can hold leases open without actually producing anything.”
Boulder County sued Crestone Peak in 2018 arguing that the two leases had expired for lack of production, according to the news release. The Boulder County District Court and the Court of Appeals agreed with Crestone Peak that the leases were satisfied, so long as oil and gas had been ‘discovered in commercial quantities.’
“The ruling places Colorado in a small minority of states that sees it this way,” Burke said. “That is not a good policy for Colorado.”
“We’re glad that Boulder County can take the lead in aligning Colorado law with the majority of states and adopting a policy that prevents leases from being extended, in some instances, indefinitely. This is an important question,” Boulder County Commissioner Claire Levy, said in the news release.
The Colorado Supreme Court will read briefs from both sides and determine whether it will grant certiorari review. Typically, the highest court only grants review of a tiny percentage of cases presented to it, the news release states.
Boulder County Commissioners said the court will decide if people’s mineral private property should have priority over oil and gas companies’ profits.
“We inherited dozens of decades-old leases with our open space acquisitions,” Boulder County Commissioner Marta Loachamin said in the news release. “This is just one of our important efforts to monitor our rights and protect property in Boulder County.”
