New Mexico Calls Oil Firm Brazen Scofflaw

     SANTA FE, N.M. (CN) — New Mexico has called the bluff of an oil company that’s been trying to cut a deal on the hundreds of thousands of dollars it owes for injecting wastewater into state land for years, the State Land Office says.
     Siana Oil and Gas Co. has been occupying New Mexico state land and disposing of oilfield brine there without paying for rent or disposal fees since 2011, the Commissioner of Public Lands says in the April 27 lawsuit in Santa Fe District Court.
     Siana got its first 5-year lease for a 3.6 acre parcel in Lea County in 1996. That permit allowed surface uses. Sometime after it got another 5-year lease, in 2006, it began injecting brine wastewater from its drilling, the state says.
     New Mexico does allow companies to inject oilfield brine into well, but it charges for an easement, an annual fee and a 10 cents per-barrel disposal fee.
     When Siana’s latest lease expired, in December 2011, the State Land Office informed it that it would have to pay $10,000 a year for a salt water disposal easement, plus 10 cents per barrel disposed.
     In February 2012, Siana sent the state a $10,000 bond and offered to pay $2,500 as an annual fee, plus 1½ center per barrel, according to the complaint.
     The state rejected that offer, and hasn’t heard from Siana since, it says.
     Meanwhile, Siana continues to occupy the land and inject oil drilling waste into it without paying Dime One, without a lease, easement, or authorization, the state says.
     The Land Office says there have been multiple spills of contaminated water and other fluids on the land. The state says it has repeatedly tried to contact Siana and inform it that it’s trespassing. It sent a cease-and-desist letter in February this year.
     When Siana didn’t respond to that either, the Land Office fenced in the land and asked the Lea County Sheriff’s Department to prevent Siana from continuing to trespass.
     The state estimates it will cost $400,000 or more to clean up the contamination and remove and dispose of the equipment.
     The Land Office says it asked Siana to pay $283,000 for the trespass fees and a discounted clean-up penalty, to no avail.
     So the state seeks an injunction, accounting, and compensatory and punitive damages for trespass, negligence, and unjust enrichment and unlawful use of state land.
     Land Office commissioner Aubrey Dunn said in an email, “One of my top priorities as land commissioner is to preserve and protect our state trust lands for the benefit of future generations. My office will not tolerate acts of trespass on state trust lands, nor will we turn a blind eye to the destruction of these lands by bad actors in any industry. We are taking the appropriate steps to see that our land is remediated.”
     Representatives from Siana Oil did not respond to telephone requests for comment Friday or over the weekend.
     The defendants are Siana Operating and Siana Oil and Gas Co., both Texas LLCs.
     Privately owned Siana is based in Midland, has annual revenue of $500,000 to $1 million and employs five to nine people, according to publicly available estimates.

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