SM Energy has backed out of its deal to purchase mineral rights from Erie, the town announced late Wednesday afternoon.

Attorneys representing the company informed the town of its decision earlier in the day, according to the Erie news release.

Erie Mayor Andrew Moore on Wednesday evening said SM Energy’s decision to walk away from the table left him “bummed.”

Moore has been a vocal proponent of the contentious mineral rights deal, which would have included $4.5 million in cash and 160 acres of land from SM Energy, as well as assurances from the company that it would plug and abandon 17 existing oil and gas wells within Erie over time.

“We’ve spent a year working through this. … Those were two huge benefits to the town,” he told the Daily Camera.

The Erie Town Council had voted in June to sell the town’s mineral rights, an agreement that would have allowed SM Energy to drill beneath portions of Erie from its planned Draco Pad just east of the town.

The Colorado Energy and Carbon Management Commission had approved a plan for the Draco Pad in March 2025, but before SM Energy could start drilling, the company needed to establish legal access to all the underground minerals included in the plan. Without the mineral rights deal, under recently enacted state law, SM Energy will now have to redraw its drilling plan to avoid Erie’s mineral rights.

The end of the agreement follows a months-long back-and-forth over the deal.

In June, a mineral rights agreement put before the council failed, with council members split on the issue. One week later, the council reversed course and voted 4-3 to sell the town’s mineral rights to SM Energy. A month later, Erie residents who opposed the deal gathered enough signatures to put the issue up to voters, either on the November ballot or through a special election.

Moore said the referendum “certainly was the driver” behind SM Energy’s decision to pull out of the deal.

Erie will retain ownership of its mineral rights for the time being. The town is still evaluating the implications of the end of the agreement, according to the Wednesday release.

This is a developing story and may be updated.