Elm Ridge latest sign of oil and gas decline
FARMINGTON – The Elm Ridge Exploration Co. is the named defendant in a number of lawsuits that include claims of unpaid services, debt and money due totaling more than $2.3 million.
The lawsuits seek repayment by Elm Ridge to a number of oilfield service companies in the area. But Elm Ridge's attorney, Jack Fortner, said the company intends to pay all the money it owes.
Many oil and gas companies — from the large corporations to the small, mom-and-pop independents — have been reeling in the now-16-month bust caused by low crude oil prices on the commodities market. Elm Ridge is no exception, he said.
The Dallas-based company that has offices in Bloomfield found itself with more debt than it could handle, Fortner said.
"Like a lot of businesses in San Juan County, they’ve been affected by the decline in oil and gas production, but they’re still a strong business," he said.
Fortner, who is also a San Juan County commissioner, said Elm Ridge has paid back some of the money the company owes over the last four months .
"They've already paid off three to four of the lawsuits. These are not small amounts, each running around $300,000 to $400,000 ... ," he said.
On Feb. 9, attorneys for Wellhead Compression Inc. filed a lawsuit in the Eleventh Judicial District Court in Aztec seeking payment from Elm Ridge and its subsidiaries — Beeline Gas Systems, Bearcat Drilling and Triple P Oil Field Services — for $488,942 at a continually accruing rate of 15 percent annual interest, plus attorneys' fees.
Another lawsuit filed by attorneys for Durango, Colo.-based MWD Technologies USA on Jan. 26 lists Elm Ridge and its subsidiaries as defendants. That suit claims Elm Ridge owes MWD for oilfield consulting services, supplies, services, labor, machinery and equipment the company provided in 2014 and 2015. The lawsuit demands repayment of $392,913 that carries an annual interest rate of 15 percent, plus attorneys' fees, according to court documents.
On Feb. 17, attorneys for Monty and Shannon Striegel's company also filed, suing Elm Ridge for $528,745, plus interest and attorneys' fees.
The same day, High Tech Tools, a Colorado-based oilfield service company, sued Elm Ridge for $70,460.
The next day, attorneys for Kachina Services, a San Juan County oilfield service company, filed suit against Elm Ridge for unpaid services totaling $233,535, plus interest and attorneys' fees. Attorneys for R.B. Snyder Consulting LLC, also a San Juan County-based oilfield service company, filed suit against Elm Ridge for $141,486, plus interest and attorneys' fees.
In Sandoval County's Thirteenth Judicial District Court, attorneys for Diamondback Excavation Inc. filed a lawsuit against Elm Ridge for $490,682 in unpaid services and damages, plus interest and attorneys' fees.
Elm Ridge is seeking financing and is selling off some assets to be able to address its debt, Fortner said.
"They told me that they are going to pay everybody," Fortner said. "They’re a strong business, and they will be going forward. They’re a strong company. They’re just, like a lot of companies right now, low on cash flow."
James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.