An oil and gas operator in the Permian Basin was fined $176,000 by the New Mexico Oil Conservation Division (OCD) for violating its permit by combining oil and gas from separate wells for storage without state approval.
Matador Production was served a notice of violation on Monday for the offense the state reported took place at two wells and a tank battery in Lea County where Matador illegally commingled its production reported the Carlsbad Current-Argus.
The company did not respond to a request for comment.
Commingling is allowed with state approval to offset storage costs by allowing multiple wells to feed into the same storage facility.
Matador was authorized to commingle on May 15, but the OCD contended it began the process months before in November 2019 as the two wells began to produce.
The fine was assessed from February 25, when the OCD’s authority to issue fines began until April 30.
In total, the OCD proposed to asses a fine of $176,000 at $1,000 per day for 80 days and including additional charges due to Matador having more than 500 wells registered with OCD and gross sales above $10,000.
Source: Carlsbad Current-Argus