Testimony began Monday in a trial that could decide whether gas drilling will be allowed at Rayzor Ranch.

The trial, which was set to continue this morning, centers on whether Fort Worth-based Range Production Co. still has the right to drill at the west Denton mixed-use development. The Denton City Council last month approved a permit allowing natural gas drilling at the site, but production is on hold until the lawsuit is resolved.

Officials with Allegiance Hillview LP, the company behind Rayzor Ranch, say the right to drill on the property ended this summer under a 2008 land-use agreement. Range officials say they missed a July 11 deadline to start drilling for reasons beyond their control, including a longer-than-expected city review process and unexpected neighborhood opposition.

Attorneys for both sides reiterated their positions Monday before Denton County state district Judge L. Dee Shipman, who is hearing the non-jury trial.

“This case is really about procrastination,” said Allegiance attorney Richard Illmer, who argued that Range simply waited too long to apply for city permits. Range missed the deadline even though city planners agreed to fast-track the application last spring, Illmer said.

Range attorneys say the company did its best to meet the deadline. In court filings, they argue that the land-use agreement allowed the drilling deadline to be extended if the city failed to issue permits, “so long as such event is beyond the reasonable control” of the applicant.

“We diligently pursued filing of our permits,” Range landman Jody Watkins testified. The company missed the deadline because of “unforeseen events,” he said.

Range attorney Andrew Sims said Allegiance had a hidden motive in holding firm on the deadline. Sims offered e-mails he said showed Allegiance officials wanted to use the deadline as leverage in their ongoing talks with a prior landowner over parkland dedication. Illmer, the attorney for Allegiance, said the e-mails weren’t relevant to the case.

The bid to drill gas wells at Rayzor Ranch attracted widespread attention this summer as it made its way through City Hall. Opponents organized protests and petition drives against the drilling, saying it would threaten public safety.

The proposed drilling site covers 3 acres in the southeast corner of Rayzor Ranch, a 410-acre mixed-use project under construction at U.S. Highway 380 at Interstate 35. The site, which could hold up to five wells, is north of a hospital and retirement community and within several hundred feet of homes and McKenna Park.

Allegiance Hillview owns the property’s surface rights. Rayzor Investments Ltd., which sold the land for development, retained most of the mineral rights and last year signed a lease with Range to drill gas wells there.

In 2006, Rayzor Investments signed a land-use agreement with Allegiance Hillview allowing gas drilling on four potential sites inside Rayzor Ranch. Two years later, the parties signed an amended agreement reducing the number of potential sites from four to the one across the street from McKenna Park. The agreement also extended the deadline to start drilling to July 2009 from October 2008.

Range, a subsidiary of Fort Worth-based Range Resources, sued Allegiance Hillview on July 10 after Allegiance refused to extend the drilling deadline again. The trial was expected to resume at 9 a.m. today in the 211th District Court.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.