New Mexico is accusing three Texas oil company executives of orchestrating a “fraudulent scheme” that pocketed revenue from hundreds of oil and gas wells in New Mexico and forced state taxpayers to pay for plugging and cleaning the wells. The lawsuit, 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 pushing old wells onto the public.
The 72-page complaint alleges a long-standing pattern of fraud and self-dealing in which oil company executives Everett Willard Gray II, Robert Stitzel, and Marquis Reed Gilmore Jr., all of Midland, Texas, repeatedly transferred wells between “a series of shell companies, LLCs, and partnerships that they established.” The men repeatedly placed companies into bankruptcy protection, but then transferred profitable wells to other companies they owned or operated outside of bankruptcy, according to the complaint.
New Mexico faces millions of dollars to plug wells drained by corporate bankruptcies. As ProPublica and Capital & Main detailed in a 2024 study, unplugged oil and gas wells can emit climate-warming methane and cancer-causing gases and often leak salty, radioactive wastewater. Newsrooms exposed Gray, Stitzel, and Gilmore’s early business dealings and use of bankruptcy proceedings.
“We will not stand by while bad actors take advantage of the system to avoid responsibility, burden the state with costly remediation costs, and recklessly endanger the health of new Mexicans,” state Attorney General Raul Torrez said in a statement.
As part of ProPublica and Capital & Main’s 2024 investigation, news organizations toured dozens of wells belonging to Remnant, a group of companies in which the men founded businesses. Some wells leaked large amounts of methane that could cause an air explosion if ignited. Others released potentially lethal concentrations of hydrogen sulfide. Some were surrounded by oil and wastewater spills. The owner of an oilfield services company that was working on Remnant’s oil wells at the time said the men filed for bankruptcy protection without paying the company what it owed.
In a statement responding to questions from ProPublica and Capital & Maine, Gray said the recent lawsuits are “baseless” and based on “baseless allegations.” “I have always acted ethically and have never engaged in any activity to defraud the State of New Mexico. I strongly deny any wrongdoing in this matter,” he said.
One of Gray’s companies named in the state’s complaint, New Era Energy & Digital, ended up owning 87 gas wells, the largest in the group, which the company said in a press release “no longer align with its business model.” Instead, New Era is focusing on building AI data centers using nuclear power plants that have yet to be built.
Mr. Stitzel and Mr. Gilmore did not respond to requests for comment.
The tactics the attorney general alleges are commonly used in the industry to squeeze profits out of old wells before companies go bankrupt. Oil and gas company executives follow a similar pattern so often that environmentalists call it a “strategy.”
Oil companies and industry groups argue that most orphaned wells are old and that modern operators are helping to solve the problem by putting money into various government-controlled funds that cover the cost of plugging some old wells.
The exact number of orphaned wells awaiting cleanup across the country is unknown, but the number is believed to be in the hundreds of thousands, if not more. New Mexico faces a bill of up to $1.6 billion to fill these wells, according to a June 2025 Legislative Finance Committee report.
“The risks are increasing as the oil boom ages and many wells are producing less,” said Mandy Sackett, New Mexico campaign director for the environmental group Earthworks. The prospect of taxpayers being forced to plug an oil company’s orphaned wells “poses a very significant financial risk,” she said.
“Escape from the Dark Ages”
The issue of orphaned wells by Remnant and other companies has led to widespread recognition among lawmakers and regulators that New Mexico’s safety measures are inadequate.
Oil companies are required to set aside funds called bonds that can be claimed by the government for the cost of plugging oil wells and cleaning up the environment. These bonds are intended to protect taxpayers from incurring such costs if a company goes bankrupt or exits.
But like other oil-producing states, New Mexico’s national debt covers only a fraction of the actual cost of cleanup. A 2024 ProPublica/Capital & Maine analysis found that bonds held by the 15 states that account for nearly all of the nation’s oil and gas production account for less than 2% of the $151.3 billion it would cost to plug each state’s wells.
In New Mexico, the state’s Petroleum Conservation Commission has begun updating its bonding rules, and a new attempt at bonding reform began with a public hearing in October. An amendment backed by a coalition of environmental groups would require companies to post a $150,000 bond for each idle or low-producing well. Research shows that these people are very likely to become orphans and it is the responsibility of the state to prevent this.
The proposed regulation would target companies with large numbers of these dangerous wells, requiring companies whose portfolios consist of at least 15% of inactive or low-producing wells to purchase bonds for each well. The proposal would also impose separate regulatory oversight on the sale of wells to less-capitalized companies and limit the amount of time a well can remain idle before needing to be plugged.
Mark Olalde/ProPublica Reporter Nick Bowlin tests for methane and hydrogen sulfide leaks in an orphan well that belonged to Remnant and Acacia near Artesia, New Mexico.
Petroleum Conservation Service officials said in a statement that “interested parties are currently engaged in settlement negotiations” to develop bonding provisions. The agency declined to comment on the attorney general’s lawsuit.
The New Mexico Land Department, which oversees the state’s public lands, recently began a similar process to increase the amount of money put into bonds to plug wells in its jurisdiction. The agency estimates there are 15,000 unplugged oil and gas wells on land it manages.
Ali Bianoff, general counsel for the state Land Office, said these reforms bring bonding requirements “out of the dark ages” and closer to the level the agency would need to fund cleanup if a company exits.
“A reasonable observer would conclude that our ties are grossly inadequate,” Bianoff said.
Industry groups have expressed dissatisfaction with the proposed rules.
The New Mexico Oil and Gas Association and the New Mexico Independent Petroleum Association filed a counterproposal that would significantly reduce the bond increase. The latter said in comments submitted to the state that the proposal would “prevent small businesses from going out of business.”
“We do not believe it is in New Mexico’s best interest for the Bureau of Lands to eliminate many small, blue-chip, state-based operators to leave behind only a few supermajors,” Jim Winchester, executive director of the New Mexico Independent Petroleum Association, said in a letter to the agency.
Remnants of the oil industry
In early 2015, Mr. Gray, Mr. Stitzel and Mr. Gilmore consolidated hundreds of wells in southeastern New Mexico under the Remnant Company, then racked up regulatory violations, including too many unplugged wells. The state’s Petroleum Conservation Authority 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.
The dissolution of Remnant began a series of complex and controversial transactions between the three. Stitzel and Gilmore formed several companies under the name Acacia and purchased most of Remnant’s wells from them, according to the attorney general’s complaint. Meanwhile, Gray formed Solis Partners, a wholly owned subsidiary of Gray’s New Era, which would eventually own 87 of the group’s most profitable gas production wells. The sale price of the well to Gray’s company was $10, and Gray signed a change of ownership application transferring the well to Solis Partners on Remnant’s behalf.
Then, in December 2024, a major oil company that the state had asked to plug some of Acacia’s wells sued Acacia to pick up its own mess. Two weeks later, Acacia filed for liquidation through bankruptcy.
Of the Remnant and Acacia wells, 172 ultimately became the responsibility of the state Land Office, according to the department. Eleven of these have been shut off, but work on all but one has been undertaken by other oil companies that have leases with the agency. Based on the state’s estimated per-well cleanup costs, plugging the remaining wells could total more than $25 million.
The agency was able to collect a single bond from Remnant worth $20,000.
“This is a very clear illustration of why bonding rules need to be upgraded,” said Bianoff, general counsel for the state Land Office.
The most lucrative well in Gray, Stitzel and Gilmore’s foray into New Mexico’s oil and gas industry belongs to Solis Partners. But even that company appears to be at risk of leaving them orphaned, as it owns about 120 unused wells on state land, according to the State Lands Agency. Parent company New Era, which is planning a 3,500-acre AI data center campus in southeastern New Mexico, announced it is selling the well.
“The defendants, who have enriched themselves with profits from Solis Partners and Acacia’s oil and gas production, are once again trying to escape the cost of the clog and its repairs,” the attorney general’s complaint alleges.
Charlie Barrett is an ecologist with the environmental group Oilfield Witness who has been documenting contamination of Remnant and Acacia wells for years. “They are getting old and falling apart,” he said. They also represent small oil and gas operators, who represent the final stage of an industry that leaves wells orphaned, he said.
“I wish I could say it’s unique, but it’s not,” Barrett said.
