PDC Energy Inc. has agreed to pay $688,500 to resolve allegations that it drilled and produced publicly owned oil and gas in Weld County without obtaining a lease and permit, the U.S. attorney’s office said.

A federal investigation focused on allegations that the Denver company drilled a well in July 2013 and operated it without getting the required approval, officials said Tuesday. The alleged trespass of federal minerals stretched from 2013 to April 30, 2019, they said.

Companies drilling for publicly owned minerals must first obtain a lease from the Bureau of Land Management and drilling permits. PDC cooperated with the investigation and the settlement resolves the company’s liability, said Matthew Kirsch, the attorney for the federal government.

“Companies have to follow the rules governing those public lands. If they don’t, they will pay an additional price,” Kirsch said in a statement.

PDC worked with the BLM and Department of Justice over several months of the investigation, company spokeswoman Courtney Loper said in an email Wednesday.

“Typically, these cases presume an intentional trespass, but PDC presented strong evidence that the trespass was unintentional,” Loper said. “As a result of constructive negotiations between PDC and the DOJ, the parties agreed to settle the matter for $688,500, which essentially split the difference between the initial starting positions of the respective parties.”

The company will have to submit an application for a drilling permit for the well and amend its existing lease application, according to the settlement agreement.

The settlement is the result of an investigation by several federal agencies, including the BLM, said  Ron Gonzales, special agent in charge for the Interior Department’s Office of Inspector General’s Energy Investigations Unit.

Revenue produced from leasing public lands, including for oil and gas development, is split between the federal and state governments.

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