The move comes a month after Colorado voters rejected Proposition 112, which would have increased setbacks to 2,000 feet.
The land was in big game habitat and the North Fork Valley in western Colorado.
A proposed 2,500-foot setback initiative has spurred oil and gas companies to file more permits before the November election.
This will be the first time that voters across the state get a chance to weigh in on a potential oil and gas regulation.
Direct Action Partners stopped work for Colorado Rising because it was owed payment and was unable to pay its own workers as a result.
Each of the 260 orphaned wells will cost an average of $80,000 to clean up.
The Bureau of Land Management is consulting with the Navajo Nation before deciding whether or not to sell drilling rights.
The move effectively ends surface drilling in the city as Top Operating and Cub Creek Energy abandon several active wells and future drilling sites.
Energy producers are responding to prices.
Interior had previously announced it was delaying the Obama-era rule until January 2019, arguing that it was overly burdensome to industry.