June 8, 2018

Mayor Randy Ahrens

Mayor-Pro Tem Bette Erickson
Councilmember Elizabeth Law-Evans
Councilmember Stan Jezierski
Councilmember Mike Shelton
Councilmember Sharon Tessier
Councilmember Deven Shaff
Councilmember Kevin Kreeger
Councilmember Kimberly Groom
Councilmember David Beacom
Councilmember Guyleen Castriotta
City and County of Broomfield
One DesCombes Drive
Broomfield, CO 80020

Re: Request for Recusal of Mayor-Pro Tem Erickson and Councilmember Kreeger

Dear Councilmembers,

On behalf of Extraction Oil & Gas, Inc. (“Extraction”) we respectfully request the recusal
of Mayor-Pro Tem Erickson and Councilmember Kreeger for the upcoming city council meeting
on June 12, 2018 and from future discussions involving Extraction’s Comprehensive
Development Plan (“CDP”) submitted to Broomfield pursuant to that certain Amended and
Restated Operator Agreement, dated October 24, 2017 (the “Operator Agreement”). Both
Mayor-Pro Tem Erickson and Councilmember Kreeger’s inherent and blatant personal biases
against oil and gas development and Extraction in particular, along with their continued crusade
against Extraction’s efforts to develop its lawfully acquired property rights and for which it has
vested rights is improper and unacceptable. Their actions are in violation of all rules of ethics for
which they swore an oath to abide and makes it impossible for them to reasonably listen and
consider our CDP with impartiality.

The Broomfield Municipal Code section B.M.C. section 2-70-010 states: “[t]he city
council intends to prohibit the appearance of impropriety as well as actual conflicts of interest.”
“Appearance of impropriety” is defined as “an action that would give a reasonably prudent
person the impression that an elected official or appointee is using his or her public office for
private gain, giving preferential treatment to any person, or losing impartiality in conducting city
business. B.M.C. section 2-70-020 (A).

Further, section 2-70-030, B.M.C. prohibits conflicts of interest as follows:

370 17th Street, Suite 5300   Denver CO 80202  www.ExtractionOG.com  P (720) 557‐8300   F (720) 557‐8301

 City and County of Broomfield
June 8, 2018
Page 2

A. No elected official or appointee to any city board, authority, or

commission shall appear before the city council or any city board, authority, or
commission if the city council or such board, authority, or commission is acting in
a quasi-judicial capacity.

B. An elected official or appointee who (1) has a substantial interest in any

transaction with the city, (2) has a spouse or relative up through the second degree
of consanguinity with a substantial interest in any transaction with the city, (3) has
a substantial interest as an affiliate of a firm with a substantial interest in any
transaction with the city, or (4) has a substantial interest as an affiliate of a firm
appearing on behalf of or employed by a person with a substantial interest in any
transaction with the city shall disclose the interest above described on the record
of a public meeting of the city council or the city board, authority, or commission
of which the person is a member.

C. The interested elected official or appointee shall thereafter (1) refrain from
voting upon or otherwise acting in an official capacity in such transaction; (2)
physically absent himself or herself from the room in which the matter is being
considered; and (3) not discuss the matter with any other member of the city
council, board, authority, or commission of which the person is a member.

“Substantial interest” is defined as a pecuniary stake in the outcome of a decision or other

interest of such weight that would lead a reasonably prudent person observing the situation to
expect such interest to make the rendering of an objective decision unlikely. B.M.C. section 2-
70-020.

Colorado law provides a presumption that quasi-judicial hearings will be conducted with
impartiality by its elected officials. Soon Yee Scott v. City of Englewood, 672 P.2d 225 (Colo.
App. 1983). This presumption can be overcome by evidence of actual bias or conflict of interest
that creates an appearance of impropriety. Id. When administrative proceedings are quasi-judicial
in character, agency officials should be treated as the equivalent of judges. Hadley v. Moffat
County School District RE-1, 641 P.2d 284 (Colo. App. 1981), rev’d on other grounds, 681 P.2d
938 (Colo. 1984). Under the Code of Judicial Conduct Canon 2, a judge should avoid
“impropriety and the appearance of impropriety in all his [or her] activities” (emphasis added).
“Even though a judge may believe in his or her own impartiality, it is the court’s duty to
eliminate every semblance of reasonable doubt or suspicion that a trial by a fair and impartial
tribunal may have been denied.” Wells v. Del Norte School District, 753 P.2d 770, 772 (Colo.
App. 1987); see also Wood Bros. Homes, Inc. v. City of Fort Collins, 670 P.2d 9 (Colo. App.
1983) (“Courts must meticulously avoid any appearance of partiality, not merely to secure the
confidence of the litigants immediately involved, but to retain public respect and secure willing
and ready obedience to their judgments.”). As a result, it is imperative that city councilmembers
exercise extreme caution in their activities and statements outside public hearings.

 
370 17th Street, Suite 5300   Denver CO 80202                       www.ExtractionOG.com                                                  P (720) 557‐8300   F (720) 557‐8301 
 City and County of Broomfield
June 8, 2018
Page 3

Courts have held that an applicant had been denied a fair and impartial hearing when the
town board of trustees had investigated the application prior to the hearing and then
recommended against its issuance. Booth v. Trustees of the Town of Silver Plume, 474 P.2d 227
(Colo. App. 1970).

Here, Mayor-Pro Tem Erickson and Councilmember Kreeger have both engaged in
conduct outside of a City Council meeting which transcends all presumptions and even notions
of fairness and impartiality. We have received from the Colorado Oil & Gas Conservation
Commission (the “COGCC”) the comments submitted to the COGCC as part of the notice and
comment requirements of the 300 Series COGCC Rules. Included in those comments was a
communication that the Mayor-Pro Tem wrote in her elected official capacity to Director Julie
Murphy dated Tuesday, May 29, 2018 stating as follows:

Ms. Murphy~
Briefly, I’m writing to ask that you deny administrative approval of Broomfield’s
19 wells at the “Livingston Pad” near the site of our proposed water reservoir.
Extraction Oil & Gas has other multiple sites identified and immediately ending
in Broomfield. Thank you for your thoughtful consideration to my request.
~~Bette Erickson

This statement is clearly and unequivocally biased and includes no basis for the request.
Further, it is in complete disregard to the Operator Agreement, the Settlement Agreement and the
Surface Use Agreement, which are all documents approved by City Council Resolution 2017-
186, adopted during a City Council meeting on October 24, 2017 that the Mayor-Pro Tem
participated in. The aforementioned agreements strictly prohibit the communication made by the
Mayor-Pro Tem.

Additionally, Councilmember Kreeger’s ongoing bias and objection to Extraction’s

operations to be conducted pursuant to the Operator Agreement have been unrelenting. For
example, at a public anti-oil and gas forum held on May 18, 2018, Councilmember Kreeger
stated that:

“Extraction goes right into neighborhoods and they are not invited. It causes an uproar.
And this uproar is helpful. And in fact this Extraction could be the best advocate we have
for getting this out of residential areas. Because while they are one of the companies most
adamant about getting into residential areas, they are making so many thousands…tens of
thousands…hundreds of thousands of people so angry that there is a rising tide of people
that don’t want this in residential areas and it’s because of companies like Extraction that
honestly the momentum has grown so great.”

Extraction’s recent CORA request is to determine if there have been other similar
communications by Councilmembers or City staff in contravention of the Operator Agreement.

 
370 17th Street, Suite 5300   Denver CO 80202                       www.ExtractionOG.com                                                  P (720) 557‐8300   F (720) 557‐8301 
 City and County of Broomfield
June 8, 2018
Page 4

As members of the City Council, both Mayor-Pro Tem Erickson and Councilmember
Kreeger are required to exercise quasi-judicial functions in their review of materials presented by
Extraction, listening to Extraction’s presentation and deliberation over the project. Although
contrary to both B.M.C section 17-54-200 and the Operator Agreement, which call for
administrative approval of Extraction’s CDP, we have been informed that City staff are looking
for “consensus” and a “head-nod” from City Council before any approval of Extraction’s CDP.

The Operator Agreement is clear that “[t]he Operator shall not be required to obtain from
the City Council any use by special review or any other approvals for any New Wells subject to
the terms and conditions of this Agreement, as long as the Operator complies with the terms and
conditions contained herein.” So while Extraction’s CDP should not even be subject to any
“consensus” or “head nod” of City Council before the CDP is approved, if this is the course of
action to be taken by the City, then Councilmembers with a conflict of interest should be recused
from this quasi-judicial proceeding. Extraction’s participation in the proceedings on June 12,
2018 should not be viewed as a waiver of any of its rights under the Operating Agreement that
the submission of the CDP to the City Council is improper and in contravention of the terms of
the Operating Agreement.

Extraction engaged in extensive negotiations with the City on the Operator Agreement,
attended many City Council meetings, countless Oil and Gas Comprehensive Update Committee
(Task Force) meetings, held an oil and gas Town Hall meeting, answered hundreds if not over a
thousand City staff and citizen questions, moved Well Sites, purchased land, conveyed land,
amended operating plans at the request of the City and taken numerous other actions working in
collaboration with the City.

Just since the approval of the Operator Agreement on October 24, 2017, Extraction has,
among other things, (i) paid the City $650,000 pursuant to Section 14 of the Surface Use
Agreement, (ii) conveyed to the City approximately 40 acres of land to be used as open space,
(iii) purchased or entered firm commitments to purchase approximately $10 million of pipe to be
utilized to implement the pipeline requirements under the Operating Agreement, (iv) agreed to
deepen certain parts of the pipeline at an approximate cost of $250,000, (v) spent thousands of
man-hours on developing plans to implement the best management practice requirements of the
Operating Agreement, (vi) attended approximately 50 in-person meetings with City staff to
discussion Extraction’s plans under the Operator Agreement, (vii) commissioned numerous
studies, plans, drawings and schematics in order to implement the requirements of the Operator
Agreement, (viii) incurred significant costs associated with the securing of financing necessary
to construct the midstream infrastructure required by the City under the Operator Agreement and
(ix) conducted work on the aforementioned land conveyance at the request of the City that was
not otherwise required.

All of these actions were taken in full reliance on the Operator Agreement with
Extraction’s full intent to stand behind its agreements with the City. It is extremely discouraging
to read and hear the statements of Mayor-Pro Tem Erickson and Councilmember Kreeger that
show a blatant intent that the City not stand behind and honor its agreements with Extraction.

 
370 17th Street, Suite 5300   Denver CO 80202                       www.ExtractionOG.com                                                  P (720) 557‐8300   F (720) 557‐8301 
 City and County of Broomfield
June 8, 2018
Page 5

Extraction has a right to a fair and impartial hearing when the Broomfield City Council
considers the CDP, whether it is by simply listening and commenting to the presentation and
giving City staff a “head-nod” or “head-shake” or engaging in a vote. Mayor-Pro Tem
Erickson’s and Councilmember Kreeger’s ex-parte communications patently demonstrate their
bias against oil and gas, and specifically, against Extraction. As a result, Mayor-Pro Tem
Erickson and Councilmember Kreeger must recuse themselves from any and all decisions that
involve Extraction.

Accordingly, fellow City Councilmembers are under a duty to ascertain whether any of
their colleagues or themselves as an individual can be fair and impartial in a quasi-judicial role
and can set aside any personal bias. We believe it is impossible for either Mayor-Pro Tem
Erickson or Councilmember Kreeger to exhibit impartiality in light of their open disdain for the
energy industry, and Extraction in particular, all in complete disregard to Broomfield’s
agreements with Extraction. As such, we request that Mayor-ProTem Erickson and
Councilmember Kreeger recuse themselves and that the City Council evaluate the issue.

The City Council and City staff have requested that Extraction present once again at the
upcoming City Council meeting that will take place on June 12, 2018. We have agreed to do so
under the expectation that Extraction will be treated fairly and impartially in the proceedings and
that the City Council will provide the direction that City staff appears to be seeking to
administratively approve Extraction’s CDP promptly following the June 12, 2018 meeting.
Additionally, Extraction will not present in any capacity that allows for further negotiations or
changes whatsoever to the Operator Agreement.

Your prompt attention to this matter is appreciated. We expect a written reply to this
letter by Tuesday June 12, 2018 at 5 p.m.

Thank you,

/s/ Eric J. Christ

Vice President and General Counsel,
Extraction Oil & Gas, Inc.

CC: Charles Ozaki

Kevin Standbridge
Shaun Sullivan, Esq.
Pat Gilbert, Esq.

 
370 17th Street, Suite 5300   Denver CO 80202                       www.ExtractionOG.com                                                  P (720) 557‐8300   F (720) 557‐8301