Extraction Notifies City That It Has 30 Days from June 15 Letter to Approve CDP Before Lawsuit

In a June 15 letter to Broomfield City Manager Charles Ozaki, Extraction Oil and Gas stated that the City is in breach of contract because it has “engaged in bad faith by unreasonably withholding approvals and attempts to impose new conditions of approval that do not exist either in the agreements or law.”  The letter served to notify the City under a provision of the Operator Agreement that allows 30 days for either party to rectify any breach of contract.  Extraction stated that the only way for the City to rectify the breach is “to approve the CDP, grant the local permits (including, but not limited to, pending PPIPs), pipeline easements, and execute any and all oil and gas leases submitted to the City pursuant to the Operating Agreement.”  Subsequent action would involve a lawsuit and request for injunctive relief, according to Extraction’s June 15 letter.

This letter was issued three days after Extraction began the June 12 Council meeting by demanding that the Staff approve the Comprehensive Drilling Plan (CDP) that evening, despite the fact that the Staff had told Extraction that Council would be reviewing it on June 12 and June 26.  Also during the June 12 meeting, Extraction representatives later stormed out after objecting to answering further questions about the inadequate risk management information it provided for the CDP.

Extraction claimed that it submitted a complete CDP on January 26, 2018 and that approval should have occurred by February 28, 2018.  In contrast to Extraction’s claim of a “complete CDP,” the City responded with a long list of deficiencies on March 7.  In Extraction’s June 15 letter, it stated that, “Even if the time requirements of Broomfield Municipal Code §17-54-200 (B)(6) did not start until the April 16, 2018 submission, the City is now well beyond 30 working days.”

Extraction indicated that the COGCC’s approval of the Livingston Pad permits gave it a right to expediency from the City with the CDP.  It also objected to what it claimed was the City’s involvement in the permitting process, resulting in “the following language being inserted into the COGCC’s approved Form 2A: ‘In both citizens’ and staff comments we have identified areas where Broomfield is requesting additional information and where we believe the Plan is not complete. Broomfield believes that Extraction has an obligation to correct or update any deficient statements in the Plan. The issues that remain outstanding in the Plan include the following:’”

Extraction also repeated its objection to the Staff’s request for Council approval and its recusal requests of Council Members Bette Erickson and Kevin Kreeger.  The Extraction letter claimed the City is in breach of contract because it has also not granted all pipeline right-of-way nor signed its mineral lease with Extraction.

Here is a link to the entire eleven page June 15 letter where Extraction claims breach of contract by the City https://www.broomfield.org/DocumentCenter/View/26964/Notice-of-Breach—June-15-2018