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Oil and gas operators walked away from a record number of wells in Colorado over the past year, with two operators responsible for the vast majority. According to a state report, 576 wells were added to the state's Orphaned Well Program in fiscal year 2024, which ended June 30. Of those, 551 were abandoned by two operators: Omimex Petroleum Inc, which abandoned 339 wells, and WME Yates LLC, which abandoned 212 wells.
In 2022, Colorado strengthened its rules around the financial assurance companies must provide before being allowed to drill in the state. Both Omimex and WME Yates failed to comply with the rules, including failing to pay fines and to pay to plug and clean up well sites. Neither company remains in business, and their wells are now the property—and financial responsibility—of the state. Also in 2022, Colorado added a new fee that operators pay per well; regulators hope this fee will generate $115 million over the next five years for the Orphan Wells Mitigation Enterprise Fund. In the meantime, much of the funding to plug orphaned wells is coming from the federal Bipartisan Infrastructure Law passed in 2021.
Over the past year, Colorado plugged 132 orphaned wells. While this is a record, it is far fewer than the 576 orphaned wells that were added to the program's backlog last fiscal year. That backlog now sits at 912 orphaned wells across the state, and regulators estimate that as many as 33,000 orphaned wells will eventually need to be plugged by the state. Orphaned and abandoned wells, if unplugged or improperly plugged, are more likely to leak oil and natural gas into the surrounding soil and air, posing health risks to nearby communities and harming animals and plants.
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This planning process could determine the pattern of energy development on desert public lands in this extraordinary landscape for decades to come. They’ve got to get it right.”
