Forced Renegotiation of royalties - saltwater disposal

I have been solicited to renegotiate Salt Water Disposal terms with SPUR Energy, NM. The representative applied pressure stating, “your well is non-operational due to malfunction. If you renegotiate terms, SPUR would be more motivated to bring your well back on line.” He added, “a renegotiation can be forced if the well is non-operational for a certain period of time, or it can be plugged completely.” Upon investigation, this individual misrepresented the status of the well; the well is operational, yet they have diverted waste water to cheaper options. Frankly, it fells like extortion. Any advice?

This proves my view that a salt water disposal permit is a license to steal. You might want to have a New Mexico oil and gas attorney take a quick look at your current agreement. They may be violating your agreement by “diverting wastewater to cheaper options”. It would be great if you knew what other disposal operators charge. Unfortunately, it’s often hard to discover a “going rate” for salt water disposal because a number of factors go into the price: availability of other wells, volumes of salt water to be disposed of, distance between the producing well and the disposal well, etc. Even when you know what others charge, because of differing factors like these, the rates often cannot be compared.

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Amee: I sincerely appreciate your reply; I thank you. Todd

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