ALBUQUERQUE, NEW MEXICO – New Mexico Attorney General Raúl Torrez has filed a suit in Santa Fe District Court against three Texas residents—Everett Willard Gray II, Robert Stitzel, and Marquis Gilmore Jr.—and 15 shell companies. He alleges they colluded to separate profitable wells from older, costlier ones, allowing the latter group to go bankrupt and spill cleanup responsibilities onto the state.
The complaint describes a deliberate scheme: the shell companies stripped income from hundreds of wells and transferred prime assets to related firms, then abandoned the rest. When remediation became due, the companies filed for bankruptcy, forcing the state to take over cleanup duties.
A growing crisis of orphan wells looms—New Mexico has over 700 wells currently flagged for state-funded plugging, amid more than 3,000 known or likely orphaned wells. Cleanup costs average $163,000 per well, leaving a state shortfall estimated between $700 million and $1.6 billion. The AG’s suit aims to compel the defendants to plug wells, secure remediation funds, and reimburse New Mexico’s cleanup costs. Meanwhile, regulators and lawmakers are pushing to update bonding rules designed to hold operators financially accountable. Current bonding often covers only a few thousand dollars per well—a fraction of the actual cleanup cost. Proposals include raising bond minimums to $150,000 per high-risk well and limiting how long operators can defer cleanup.
So far, neither the defendants nor industry groups have issued a response. The outcome of the case may set a potent legal precedent for other states confronting orphaned well challenges.
