By Josh Lee
New Mexico Attorney General Raúl Torrez and state regulators recently filed a sweeping civil complaint against a network of oil and gas companies and individual operators, alleging they took part in a fraudulent scheme designed to reap profits from oil and gas wells while evading regulatory responsibilities, including plugging aging and inactive wells.
According to the complaint, three individuals used a web of shell companies and limited liability entities to purchase several low-producing “marginal” oil and gas wells in New Mexico. Wells like these carry expensive end-of-life obligations, with plugging and remediation costs that can reach hundreds of thousands of dollars per well.
The state alleges the individuals consolidated these wells and their environmental liabilities into a single entity, Remnant Oil, while transferring profitable assets to other related companies. After those transfers, Remnant Oil was allegedly driven into bankruptcy, leaving it unable to cover cleanup costs. As a result, the complaint says, the environmental responsibilities for the wells risked being shifted to the state, potentially turning them into orphaned wells and leaving taxpayers to pay for plugging and remediation.
The defendants named include Acacia Resources, LLC, Remnant Oil Company, LLC, Bluebird Energy Corporation, Solis Partners, LLC and New Era Energy & Digital, Inc., among others.
The state is seeking civil penalties, restitution, recovery of remaining asset value to satisfy plugging and remediation costs and injunctive relief to prevent further operations unless all environmental obligations are met.
New Era Energy & Digital have publicly denied the allegations made in the complaint, calling it a “baseless and uninformed attack.” The company did not respond to a request for comment.