State’s High Court Affirms Ruling Against the County, Overturns Disfavored Ruling

Boulder County, Colo. - The Colorado Supreme Court has today (Nov. 20) issued its opinion in Board of County Commissioners of Boulder County v. Crestone Peak Resources. Although the high court affirmed the judgment of the court of appeals finding that the county’s oil and gas leases remained valid, it overturned a legal ruling that was unfavorable to the owners of oil and gas leases across the state, including the county.

“Today’s ruling by the Colorado Supreme Court takes a poor piece of law off the books,” said Senior Assistant County Attorney Kate Burke. “Although we didn’t get the full outcome we were hoping for, the rejection of the appeals court’s legal conclusion is a win for the county and other mineral owners going forward.

“It’s clear our efforts to enforce our lease rights can yield positive shifts in the law,” said Commissioner Claire Levy. “This ruling gives us more clarity when we are evaluating the status of the county’s leases. The county’s legal team will continue to push for clear and coherent law around oil and gas.”

“Boulder County took the fight all the way and we are grateful to our team for taking on these difficult legal arguments,” said Commissioner Ashley Stolzmann. “It is rare for mineral and land owners to score any wins in this area and we got a partial victory, which is something to be proud of.”

In 2019, the county sued Crestone Peak Resources, arguing that certain oil and gas leases owned by the county had expired when oil and gas production on those leases stopped for four months. The leases provided that any gap in production longer than 60 or 90 days could lead to termination of the leases. However, the appeals court held that the existence of a well that could produce oil or gas, even if it was not doing so, meant that production had not actually stopped.

The highest state court rejected the court of appeals’ “sweeping” ruling, finding instead that each oil and gas lease must be interpreted based on its own terms with respect to what type of production is required and in what context. The supreme court interpreted inconsistent language in the leases and found that the leases the county challenged did not expire due to the production stoppage.

View more information on oil and gas development regulations in unincorporated Boulder County.