Oil and gas operator files counterclaim alleging the county was “unjustly enriched”

(Boulder County, Colo.) -- On Wednesday, June 19, 2019, Crestone Peak Resources filed a counterclaim against Boulder County in response to the county’s 2018 lawsuit against Crestone. In its filing, Crestone requests money damages against the county.

Last September, Boulder County filed a lawsuit alleging that several of Crestone’s mineral leases had expired and, as a result, Crestone had lost the legal right to drill on those properties. Those expirations arose when wells stopped producing oil and gas for long periods at various times in the past. The leases subject to the lawsuit were granted in the 1980s and were attached to county open space properties when the county purchased them.

Many of those wells returned to producing afterward and Crestone paid the county the royalties required by the leases. Now, Crestone claims that if the leases expired, it was “unjust” for the county to keep those royalty payments.

Statements from the Board of County Commissioners

“Crestone’s claims are baffling,” said Boulder County Commissioner Deb Gardner. “Crestone extracted and sold county-owned minerals before and after the leases expired. They kept most of the profits and now it appears they’re arguing they should get them all. In other words, they think they should reap even greater profits by selling the county’s minerals after the leases expired.”

“Crestone complains that the county did not notify Crestone that the leases expired until recently,” said County Commissioner Matt Jones. “Crestone, and Encana before it, were in a much better position than the county to know when their leases expired. As far as we know, neither company made any effort to contact the county when the wells stopped producing and caused the leases to expire.”

“We dispute the validity of the counterclaim and we look forward to hearing what the court has to say about it,” said Board of Commissioners Chair Elise Jones. “We believe the people and lands of the county have been harmed by Crestone’s activities.”

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Reference: Crestone's Amended Answer to Amended Complaint and Counterclaim