New Mexico issues $1 million in fines to oil and gas producers

Feb. 15—The state Oil Conservation Division has issued more than $1 million in combined penalties to two fossil fuel companies for failing to comply with regulations.

The agency is imposing a $913,200 penalty on Houston-based Contango Oil & Gas Co. for failing to file a production report by the deadline and having too many inactive wells.

Contango has 15 idled wells out of its 546, more than double the seven allowed under state regulations.

The agency also cited Novo Oil & Gas Northern Delaware, LLC for missing the deadline on its production report, resulting in $142,800 in penalties.

Failing to file the required production reports on time is considered a serious violation that undermines New Mexico's ability to ensure operators are accurately tracking the fossil fuel volumes affecting the state's revenue, the agency said in a statement.

"Production reporting is a very important aspect of the OCD's ability to understand oilfield activity on a high level," agency Director Adrienne Sandoval said in a statement. "Failure to report on time severely limits these abilities as well as those of other state agencies who use OCD production data."

Officials at Novo and Contango didn't respond to efforts to seek comment.

The agency observed a pattern of the operators' reports being significantly late or missing.

Contango has not filed a report for June, July, August, September, October or November of 2021.

Novo filed its reports 57 days late for September, 34 days late for October and 31 days late for November.

"The OCD was able to recognize a pattern of non-compliance as part of ongoing production audit reviews," Sandoval said.