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Broomfield City Council last summer approved additional monitoring by a contractor in the wake of a growing number of noise complaints related to Extraction Oil & Gas’ Livingston well site.
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Broomfield hired outside counsel in December, to protect its interest and those of residents, in anticipation Extraction Oil & Gas Inc. filing for bankruptcy.

Broomfield will participate in the bankruptcy proceedings, according to a letter the city posted on its website last week. Because of the company’s “declining financial situation,” the city and county’s attorney’s office retained the law firm of Shapiro Bieging Barber and Ottenson to “advise and represent the city in potential bankruptcy proceedings.

John Leininger, one of the firm’s partners who has more than 20 years of bankruptcy experience and has worked on oil company bankruptcies, is lead counsel on this matter, according to the statement.

On June 14, Extraction Oil & Gas, Inc. filed for bankruptcy protection to allow it to reorganize under Chapter 11 of the Bankruptcy Code.

The Operator Agreement between Broomfield and Extraction remains in “full force and effect” during, and after, the bankruptcy proceedings, according to city officials. Extraction officials say the company’s current plan will leave the company and its existing management operating the company and its assets as debtors in possession during the reorganization.

“We do not expect to see any change in Extraction’s operations,” according to the city’s letter. “Extraction has previously advised Broomfield that other than continuing production at the Interchange and Livingston Pads, it does not have further drilling or fracking operations scheduled in Broomfield in 2020.”

As of June 22, Extraction had confirmed that 14 wells were in production and four were in flowback, according to Broomfield’s Oil & Gas Data Snapshot.

Extraction is required under the operator agreement to provide 30 day advance notice of its intent to restart operations.

Extraction has filed a notice of bankruptcy and the automatic bankruptcy stay in all it’s pending court cases, which includes the noise cases filed in Broomfield Municipal Court, according to the city. The bankruptcy code provides an exception for enforcement of government regulatory and criminal prosecutions. On June 19, Broomfield filed a motion in Municipal Court saying the automatic bankruptcy stay does not apply to the noise citation cases and asks the court to set the cases for trail.

The judge set the noise cases for arraignment at 9 a.m. July 7, and advised he would take up the question of the bankruptcy automatic stay at that time, according to Broomfield’s Oil and Gas Q & A Dashboard.

If approved by the bankruptcy court, this agreement will provide finances for operations while the bankruptcy plan is negotiated, according to the document.

The bankruptcy court has already granted a number of motions, according to the dashboard document, including: an order to allow Extraction to continue to pay taxes and fees for the next 21 days; an order to allow payment of insurance premiums; an order to allow payment of mineral interests; an order limiting the trading and transfer of Extraction debt and stock; an order allowing payment of utilities; and an order to allow payment of wages, salaries and other compensation.

The health and safety of Broomfield residents remain “paramount,” city officials said in the letter to residents. Broomfield’s oil and gas inspection staff continues to be onsite for routine inspections and daily monitoring of all processes on the Extraction well pads to monitor Extraction compliance with the law and the terms of the Operator Agreement, the best management practices, and the comprehensive drilling plan.

Broomfield’s inspectors monitor all of Extractions plugging and abandoning operations and well maintenance operations, with onsite monitoring and staying in contact with the Colorado Oil and Gas Conservation Commission  throughout these processes, according to the city’s letter. Broomfield has implemented a soil gas testing program to monitor plugged and abandoned wells.

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