In late November 2021, the City entered into a 90-day tolling agreement with Sentinel, which was periodically extended, to allow time to explore and discuss options relating to the Ordinance that could mutually serve the parties in an effort to avoid potential litigation. Throughout, Sentinel has complied with the prohibition of no new drilling or redrilling of wells.
City of Culver City and Sentinel Peak Resources have made substantial progress toward a final settlement agreement in response to the City’s Oil Termination Ordinance which calls for the phase out of oil operations within the Culver City portion of the Inglewood Oil Field.
The Ordinance, which was adopted by the City Council on October 25, 2021, prohibits the drilling of any new wells, the re-drilling of any existing wells, requires the plugging and abandonment of all oil and gas wells and termination of oil and gas operations within the City. The settlement addresses the Ordinance as applied to Sentinel.
On November 14, 2022, the City Council approved a settlement framework that focused on the timing of the plugging and abandonment of wells and a date-certain schedule for the overall closure of the City IOF. The Council also authorized further discussion and negotiation of the implementation and enforcement of the Ordinance as applied to Sentinel.
In recognition of current progress and pending settlement between the parties, the existing Tolling Agreement has been extended through June 30, 2023 to allow additional time for the parties to complete documentation of the settlement.
The settlement includes the following provisions affecting the timing, process and requirements related to the plug and abandonment of wells and overall closure of the City IOF:
Drilling of new wells and redrilling of existing wells is prohibited, effective from and after the effective date of the Ordinance, November 24, 2021.
Sentinel to plug and abandon a minimum of 15 wells by December 31, 2027, at a rate of a minimum of three wells per calendar year over the five-year period between 2023-2027.
Sentinel to plug and abandon all remaining wells and complete the overall closure of the City IOF by December 31, 2029.
Extension, not to extend beyond December 31, 2032, may be authorized under special circumstances after December 31, 2027.
Sentinel to report and verify well plugging and overall closure to the City in accordance with six performance schedule dates established as December 31st of 2023, 2024, 2025, 2026, 2027 and 2029.
Termination to include restoration of the well sites and remediation, restoration and revegetation of the areas of the oil uses premises affected by the plugging and removal activities to as near a natural state as practicable.
Sentinel to maintain performance bonds through completion of Termination in amounts consistent with the estimated true costs for all work required to be performed to complete Termination.
Sentinel to maintain insurance coverage, including sufficient coverage for sudden accident and pollution liability.
Remedies to guarantee timely and complete performance include performance bonds, specific performance and liquidated damages.
Annual Well Renewal and Annual (Fire) Inspection fees in accordance with Chapter 11.12 and City’s adopted Fee Schedule.
For more information, see the City’s November 15, 2022 update: City Council Approves Settlement Framework with Sentinel Peak Resources Relating to Oil Termination Ordinance.
If you have any questions or comments, please email Heather Baker, City Attorney or Christina Burrows, Deputy City Attorney, or call them at (310) 253-5660; or email Melanie Doran Traxler, Contract Project Manager or call her at (818) 248-7158.
City of Culver City