To: Board of County Commissioners
Through: Katherine Smith, Acting, Public Works and Development
Prepared By:
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Ernie Rose, Energy Planner, Public Works and Development
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Subject:
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MICS26-001 Request for Consent: Crestone Peak Services Holdings to assign County Oil and Gas leases to Anadarko E&P Onshore LLC
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Purpose and Request:
recommended action
Crestone Peak Resources Holdings (“Crestone”) has requested that the Board of County Commissioners consent to the assignment of an oil and gas lease between Crestone Peak Resources Holdings and Arapahoe County (the “County”). Crestone intends to assign the lease to Anadarko E&P Onshore LLC. It is recommended that the Board of County Commissioners consent to the assignment of the lease and authorize the Chair to sign the Notice of Assignment Letter provided by Crestone.
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Alignment with Strategic Plan: Good Governance - Deliver mandated and essential services with excellence.
Background and Discussion: The County executed an Oil and Gas Lease with ConocoPhillips to lease the County’s oil and gas interests to ConocoPhillips. The lease is dated August 29, 2012 (“2012 Lease”), and was recorded under Rec. No. D2100252. Pursuant to an addendum to the 2012 Lease, the Lessee, ConocoPhillips, is required to get written consent from the County in order to make such assignment. On November 25, 2019, the Board of County Commissioners approved a Consent to Assignment of the 2012 Lease from ConocoPhillips to Crestone, making Crestone the current Lessee.
As the current Lessee, Crestone intends to convey all of its interest in the 2012 Lease to Anadarko E & P Onshore LLC and requires the Board of County Commissioners to consent to the assignment, pursuant to the 2012 Lease’s addendum. Accordingly, Crestone respectfully requests the Board of County Commissioners’ consent and approval of the assignment from Crestone to Anadarko E & P Onshore LLC.
Alternatives:
1. Consent to the assignment by executing and returning the Notice of Assignment letter for the lease.
2. Object to the assignments and direct staff to notify Crestone Peak Services Holdings s that it does not consent. However, the County must have a reasonable basis for refusing to consent.
Fiscal Impact: If the County consents to the assignment, the County will continue to be entitled to any royalty payments under the assigned lease from Anadarko E&P Onshore LLC for oil and gas production from the associated well.
Alignment with Strategic Implementation Strategies: This proposal is a third-party application and is required to facilitate a business transaction pursuant to a fully executed contract.
Concurrence: The Public Works and Development Energy Division and the County Attorney’s Office have reviewed the application and recommend approval of this transaction.
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