In response to voters’ passage of Measure J on Tuesday, Citadel Exploration has filed a document with federal regulators indicating the oil exploration company intends to pursue legal options in an attempt to move ahead on plans for steaming extraction in the Bitterwater area.
Ojai-based Citadel Exploration is behind the massive Project Indian oil field project in Bitterwater that was a focus of the county’s Measure J debate. Citadel has plans for up to 1,000 wells in an area initiative supporters argued was six miles from Pinnacles National Park.
Cyclic steaming – the enhanced extraction practice planned for Project Indian – was among the methods banned in the measure, approved handily by San Benito County voters this week.
In the 8-K filing dated Nov. 5 with the Securities and Exchange Commission, Citadel points to the Nov. 4 election result and cites the county’s prior passage of rules for exemptions “from the application of the Measure when the application of the Measure would result in a taking.” The filing goes on to define a regulatory taking as a situation where a government regulation limits use of private property to a degree where it “effectively deprives the property owners of economically reasonable use or value of their property right to such an extent that it deprives them of utility or value of that property right, …”
The SEC filing then specifies potential action.
“Accordingly, Citadel Exploration Inc. will provide the County of San Benito the ability to compensate the company for the diminished value at the Indian Oil Field based on the reasonable Unrisked Resource Potential the property would ultimately yield, or allow Citadel to proceed with full field development and steam injection under the exemption ordinance.”
Citadel Exploration spokesman Robert Parry had referred the Free Lance to the SEC filing when asked what’s next for the company after Measure J’s passage. Parry declined to comment beyond the filing.
The prospect for legal action comes as little surprise following the victory for initiative supporters whose campaign focused on a ban against fracking while the measure also barred more common extraction techniques such as steaming. Measure supporters argued that steaming and other enhanced practices can contaminate water supplies and possibly cause earthquakes.
Andy Hsia-Coron, when reached earlier Friday afternoon, said measure supporters are confident the new law, taking effect Jan. 1, will stand.
“We’re certainly going to talk to the attorneys that helped us draft the initiative,” Hsia-Coron said, before word came down of the filing. “We wouldn’t put it past the industry to take a swat at our efforts. We’re pretty confident we’re on good legal standing.”
What is a Form 8-K?
In addition to filing annual reports on Form 10-K and quarterly reports on Form 10-Q, public companies must report certain material corporate events on a more current basis. Form 8-K is the “current report” companies must file with the SEC to announce major events that shareholders should know about.
Source: SEC
