Denver oil and gas company pays for minerals removed from public lands without permission
GRAND JUNCTION, Colo. (KKCO) -Extraction Oil and Gas, Inc. has agreed to pay over $462,000 to resolve allegations that it drilled and operated three oil and gas wells where it removed minerals from federal public lands without permission.
Extraction agreed to make this payment in addition to a $884,407 settlement it paid in February 2020 for another set of wells it removed minerals from on federal public lands without permission.
Oil and gas exploration companies may drill for oil, gas, or other minerals on federal lands the Bureau of Land Management, BLM, manages only after first obtaining a federal mineral lease and permit to drill from the BLM.
Once companies obtain the proper lease and permit, they pay royalties, which are a percentage of the value of the federal minerals they remove. Removing minerals without permission is considered trespassing.
The 2020 settlement covered twelve wells drilled in Weld County, Colorado. The United States claims for eleven of these wells, Extraction’s trespass was deliberate. This intentional trespass made Extraction liable to the U.S. for the full value of all minerals removed from the wells.
The 2021 settlement covered three wells, also located in Weld County. The U.S. claims for these wells, Extraction removed minerals without permission, buy did not act intentionally. This trespass made Extraction liable to the U.S. for the value of all minerals removed from the wells but the company was allowed to offset its payment with a credit for its costs of drilling and production.
“Protecting public lands and resources is a priority for our office,” said Acting U.S. Attorney Matt Kirsch. “Oil and gas companies that do not follow the mineral leasing process before removing natural resources from federal lands are trespassing. We will continue to hold them liable for damages from that trespassing--in amounts up to the full value of the minerals they removed, not just the royalties they would have owed had they first obtained a federal lease.”
Copyright 2021 KKCO. All rights reserved.