Boulder County announced on Thursday that the Colorado Court of Appeals has ruled a lawsuit against oil and gas drilling company 8 North, LLC can proceed despite 8 North’s parent company, Extraction Oil & Gas, Inc., filing bankruptcy.
"Bankruptcy filings can result in automatic 'stays' or holds put on all pending litigation against the bankrupt party (as a subsidiary entity of Extraction, 8 North could qualify for that protection). However, the county, the city of Lafayette and the (Colorado Oil and Gas Conservation Commission) argued the case should go forward and the appellate court agreed," the county announced in a news release.
The suit challenges the Colorado Oil and Gas Conservation Commission's policy of accepting only summary, unofficial evidence of mineral ownership from operators in its hearings.
The complaint alleges "that 8 North failed to provide adequate evidence that owns the mineral rights it claims and the COGCC should not have accepted or relied on the summary and hearsay evidence 8 North did provide," the county stated in a 2018 post to its website announcing the suit.
It also alleges the approval was "contrary to state statute and that the COGCC’s rules for establishing drilling units are flawed. Although 8 North has indicated that the well pad sites for the approved units will not be in unincorporated Boulder County (one is proposed in Weld County and one in Erie), the county nonetheless has concerns about the effect these pads would have on Boulder County residents and environmental resources in Boulder County, in addition to its concerns about the fairness and adequacy of the COGCC’s procedures," the county stated in the 2018 post.
All briefs have been filed in the case; the next step will be scheduling oral argument to the appeals court, the county stated in its Thursday news release.
The appeals court, however, did decide to apply the automatic stay in another suit the county has filed against 8 North, according to the release.
In that lawsuit, the county alleges 8 North breached several oil and gas leases when it sought and obtained COGCC approval of a 2,720-acre drilling unit in Weld County immediately south of Longmont and east of Boulder County along County Line Road, the county stated in an Aug. 29 post to its site.
"Boulder County alleges that the leases prohibit the exceedingly large unit that 8 North initiated. The county also alleges that 8 North’s proposed 32-well pad site will violate the protections in the conservation easement that the county owns over the site in Weld County," the post states.
The appeal will be on hold until the bankruptcy court issues any further direction or completes the bankruptcy proceedings, according to the news release.
Additional information about proceedings involving 8 North can be found on the county's oil and gas website under the 8 North LLC tab.