Culver City Extends Tolling Agreement with Sentinel Peak Relating to Oil Termination Ordinance
June 16, 2022
Culver City and Sentinel Peak Resources have extended the term of the existing Tolling Agreement for an additional period of time, currently through July 29, and are continuing their discussions to explore alternatives to the Oil Termination Ordinance in an effort to avoid potential litigation.
The Tolling Agreement extends the deadline for Sentinel Peak Resources “to file legal claims against the City so as to facilitate a reasonable time period to accommodate discussions between the parties as to settlement of potential claims,” said city officials this week.
Last October, the City Council adopted the Oil Termination Ordinance, which effective as of November 24, 2021, prohibits the drilling of any new or re-drilling of any existing oil wells within the Culver City portion of the Inglewood Oil Field (IOF) and further requires the phasing out, plugging and restoration of all existing oil and gas wells by no later than November 24, 2026.
In late November 2021, Culver City entered into 90-day tolling agreements with Sentinel Peak Resources as well as two groups of stakeholders asserting ownership interests within the City’s IOF.
The pause created by this tolling period is consistent with recommendations made by several City Council members during the Oil Termination Ordinance public meeting process and Sentinel Peak Resources’ requests for a reasonable window for discussions.
But the temporary tolling period does not preclude the City from enforcing the prohibition on the drilling of new wells or the re-drilling or deepening of existing wells, as stated in the Oil Termination Ordinance, city officials.
In recognition of progress to date, the City and Sentinel Peak Resources on Tuesday offered the following joint statement:
"After the City's adoption of the Oil Termination Ordinance, the City and Sentinel entered into a Tolling Agreement and a Confidentiality Agreement to engage in a dialogue to explore options with respect to the Oil Termination Ordinance that are mutually agreeable in an effort to avoid litigation. The initial discussions were productive and thus, the parties extended the Tolling Agreement and revised the Confidentiality Agreement to enable the City to provide appropriate updates to the public regarding the progress of their efforts to reach mutual grounds. The parties are mindful of the time frames in the Oil Termination Ordinance, and additional updates will be provided to the public as the discussions continue."
If you have any questions or comments regarding this matter, please email City Attorney Heather Baker or call her at (310) 253-5660; or email Melanie Doran Traxler, Contract Project Manager or call her at (818) 248-7158.