New Mexico Sues 3 Texas Oil Execs For Offloading Cleanup For 100s Of Abandoned Wells While Pocketing Profits

The state of New Mexico is accusing three Texas oil executives of orchestrating “a fraudulent scheme” to pocket revenue from hundreds of oil and gas wells in New Mexico and offload the cost of plugging and cleaning up the wells onto the state’s taxpayers. The suit, filed in late December by the New Mexico attorney general’s office, is the latest salvo in the state’s fight against oil and gas executives accused of foisting old wells onto the public. The 72-page complaint alleges a yearslong pattern of fraud and self-dealing in which the oil executives — Everett Willard Gray II, Robert Stitzel, and Marquis Reed Gilmore Jr., all of Midland, Texas — repeatedly transferred wells among “a series of shell corporations, LLCs, and partnerships they created.” On multiple occasions, the men placed companies into bankruptcy protection, only to move their profitable wells to other companies they owned or managed outside the bankruptcy proceedings, the suit said.

New Mexico faces millions of dollars in costs to plug wells the companies shed through the bankruptcies. Unplugged oil and gas wells can emit climate-warming methane and carcinogenic gases and often leak briny, radioactive wastewater, as ProPublica and Capital & Main detailed in a 2024 investigation. The newsrooms uncovered Gray, Stitzel, and Gilmore’s early business dealings and use of bankruptcy proceedings. “I will not stand by while bad actors take advantage of the system — avoiding responsibility, burdening the state with costly remediation, and recklessly endangering the health of New Mexicans,” Raúl Torrez, the state’s attorney general, said in a statement.

As part of ProPublica and Capital & Main’s 2024 investigation, the news organizations toured dozens of wells belonging to Remnant, the group of companies through which the men launched their enterprise. Some wells leaked such high volumes of methane that, if ignited, the air could explode; others emitted hydrogen sulfide at potentially lethal concentrations; and several were surrounded by oil and wastewater spills. At the time, the owner of an oil field services company that had worked on Remnant’s wells said that the men filed for bankruptcy protection without paying his company what it was owed.

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Beginning in 2015, Gray, Stitzel, and Gilmore aggregated several hundred wells in southeastern New Mexico under the Remnant companies, subsequently racking up regulatory violations, including having too many inactive, unplugged wells. The state’s Oil Conservation Division gave Remnant a deadline of July 2019 to plug some of its wells. Fifteen days before the deadline, the men placed the company into bankruptcy protection. Remnant’s dissolution kicked off a complex and disputed series of transactions among the three men. According to the attorney general’s complaint, Stitzel and Gilmore created several companies under the name Acacia and purchased most of Remnant’s wells from themselves. Gray, meanwhile, created Solis Partners — a wholly owned subsidiary of Gray’s New Era — and ended up with 87 of the group’s most lucrative gas-producing wells. The bill of sale that landed the wells with Gray’s company was for $10, and Gray signed on behalf of Remnant a change-of-operator application that sent wells to Solis Partners.

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https://grist.org/accountability/a-fraudulent-scheme-new-mexico-sues-texas-oil-companies-for-walking-away-from-leaking-wells/