Gunnison Energy LLC Agrees to Drop Damage Claims

DENVER, CO – Gunnison Energy LLC (“GELLC”), a division of Oxbow Corporation, has announced that it has decided to voluntarily dismiss its pending damage claim against Delta County. It is the first step in an effort to resolve pending litigation between GELLC and Delta County.

Delta County and a number of citizens originally appealed the decision of the Colorado Oil and Gas Conservation Commission (“COGCC”), in the summer of 2002, to issue to GELLC state permits for natural gas exploration in Delta County. GELLC filed a countersuit in Denver District Court, claiming the County’s actions in denying local land use permits for GELLC’s proposed gas wells were preempted by the COGCC’s authority. A state district court judge concurred in part with GELLC, and the extent to which the County’s oil and gas regulations are preempted by State law is still being litigated. GELLC also claimed that the County’s denial of GELLC’s application violated GELLC’s constitutional rights, entitling GELLC to damages. GELLC has estimated those damages at $2 million. Delta County has denied that GELLC is entitled to any damages from the County.

In deciding to dismiss the damage claims, Brad Robinson, Executive Vice President of GELLC, stated that “GELLC’s and Oxbow’s long-term desire to work cooperatively and in a spirit of good will with the County and its citizens was more important than pursuing a claim for damages. Had we prevailed in Court, the damages would have come out of the County taxpayers’ pockets,” Robinson said.

“Our purpose in filing these claims was to defend our rights to conduct business on fair terms, not to impose financial hardships on or alienate the local community,” Robinson added. “Remember, we are a part of the community, with nearly 300 GELLC and Oxbow employees who live and work in the North Fork Valley.”

Robinson said Oxbow and GELLC have always considered themselves good corporate citizens. Oxbow contributes millions to the local economy and donates tens of thousands of dollars to the public schools in Delta County, and its employees volunteer valuable time to youth organizations.

“We look forward to resolving the remaining parts of the litigation between Delta County and GELLC,” Robinson said.