“Statutes Trump Rules:” Wildgrass Challenges Extraction Spacing Unit as Test of 181

“Statutes trump rules,” stated Hearing Officer James Rouse in a July 22 prehearing at the Colorado Oil and Gas Conservation Commission (COGCC) regarding the protest of Wildgrass residents, Wildgrass Oil and Gas Committee (WOGc) and Boulder County regarding Extraction’s proposed new spacing unit off of the Livingston Pad.  In addressing Extraction, Hearing Officer Rouse was referring to the new statute SB19-181 and the fact that there were rule questions he could not answer given the new perspective that SB19-181 brought.  WOGc Officers Lizzie Lario and Jean Lim also took this “new” message to the City and County of Broomfield (CCOB) in a letter and public comments on July 23 to try to get CCOB to also view the spacing unit under SB19-181. 

Livingston S19-25-1N is the westernmost boundary well off of the Livingston Pad that impacts many Wildgrass mineral owners.  Since it is a boundary well, a special spacing unit is required to be created for it, different from the Lowell South spacing unit which contains 13 wells off the Livingston Pad.  The COGCC prehearing on July 22 was only for the well spacing unit, with any eventual spacing unit approval still to be followed by a Form 2 wellbore permit process and a likely forced pooling protest.  During their July 22 prehearing, WOGc/Colorado Rising Attorney Joe Salazar and attorneys for Boulder County convinced the COGCC, over Extraction objections, to delay the full COGCC hearing until at least September 25.  However, in what seemed like an unreasonable request to WOGc, WOGc was directed by the COGCC to produce a list of WOGc members in the spacing unit within the week, even before Extraction would be required to turn over a clear street map of the area.  

Almost three years ago, Wildgrass residents in the northwest section began asking questions of Extraction as to why Extraction was not recognizing their mineral rights by offering them a lease with other Wildgrass mineral owners.  For several years, these residents stated that Extraction continually refused to acknowledge them as unleased mineral owners until they finally secured the help of their title attorneys recently.  Now, many mineral owners who are believed to be in this spacing unit have not been given proper notice by Extraction.

WOGc Officer Jean Lim began asking questions of the COGCC and CCOB almost a year ago when it became clear that these northwest Wildgrass residents’ mineral rights were involved in a unique well off the Livingston Pad.  The COGCC drew a rough map of this proposed spacing unit and tried to explain the complicated special rules for boundary wells.  CCOB explained some basic facts about the boundary well and suggested that these northwest Wildgrass residents retain their own attorney. 

In Monday’s prehearing, Hearing Officer Rouse noted that there were around 28 known protestants with the possibility of that number rising to around 50.  The hearing officer characterized the approval process for this spacing unit as being complicated and made a point to note that no one from CCOB was present to give any input or observe.

In a WOGc email to CCOB Staff and Council on July 22, WOGc pointed out that, “The Hearing Officer noted that part of the complexity of this issue was the question if any provisions of the Operator Agreement actually covered this previously undefined spacing unit. This was not clarified at the hearing as there was no one [from Broomfield] qualified to comment.”  Attorney Shaun Sullivan replied that the Operator Agreement covered this well in the total of 19 and CCOB would “reach out to Extraction about the notice issues and would like to have more specifics from you on the shortcomings.”  WOGc Officers Lizzie Lario and Jean Lim provided a list of suggestions during public comments at the July 23 Council Meeting.   These included a request that CCOB ask the COGCC to attach all the BMPs to the Form 2 for this well and not to take “any actions that might impact the hearing PRIOR to the hearing date and do not make any decisions prior to hearing date without including WOGc or other impacted Broomfield Residents.”

Meanwhile, Extraction has drilled three wells of 16 approved by the COGCC off the Livingston Pad, with no way for the public to know which wells are being drilled.  Three of these 16 permitted Livingston wells involve mineral rights of homeowners in the Sheridan South spacing unit, which includes WOGc mineral owners mostly in McKay Landing whose forced pooling protest is pending at the COGCC.