June 24, 2021
Boulder County requests that Colorado Supreme Court overturn BoCo v. Crestone oil and gas Court of Appeals ruling
Outcome of the high court’s decision on Boulder County v. Crestone Peak Resources Operating, LLC could have statewide effect.
(Boulder County, Colo. - June 24, 2021) – Boulder County has filed a petition with the Colorado Supreme Court asking it to review and overturn the Court of Appeals ruling in Board of County Commissioners of Boulder County v. Crestone Peak Resources Operating, LLC.
The Court of Appeals ruled that two of the county’s oil and gas leases remained valid despite four-month gaps in oil and gas production.
“It’s a critical issue for the whole state,” said Senior Assistant County Attorney Kate Burke. “Oil and gas leases stay valid as long as production continues. 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. 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,” said Burke. “That is not 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,” said Boulder County Commissioner Claire Levy. “It’s not only of interest to us in the County, it will impact landowners statewide.”
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 the cases presented to it. “We’re hopeful,” said Burke, “this is an issue of first impression for the Court and a very meaningful one.”
“People’s mineral private property should have priority over oil and gas companies’ profits,” said Boulder County Commissioner Matt Jones. “We hope the Colorado Supreme Court will overturn the Court of Appeals and help fix this problem.”
“We inherited dozens of decades-old leases with our open space acquisitions,” said Boulder County Commissioner Marta Loachamin. “This is just one of our important efforts to monitor our rights and protect property in Boulder County.”
The answer from the high court could take months. Updates will be made available on Boulder County’s oil and gas website at https://boco.org/OilGas.
