Working out of Andrews and crossing into New Mexico: what does my insurance need?

Andrews County is in RRC District 08, and the district office is in Midland. TSHA describes the county as bounded on the west by New Mexico, with Gaines County to the north, Martin County to the east, and Winkler and Ector counties to the south.

That list matters because Gaines County, just north, is in District 8A and is handled from Lubbock. An Andrews contractor can work wells regulated from two Texas district offices and a third regulator across the state line in the same week.

TSHA lists US 385 running north and south, State Highway 176 running west to east, and State Highway 115 crossing both at Andrews.

TSHA records the Deep Rock Ogden No. 1 gusher coming in on December 5, 1929, at 4,345 feet. Development was slow until a pipeline was built in 1934. Then discoveries took off: five fields in the 1930s, twenty-six in the 1940s, ninety in the 1950s and fifty-three in the 1960s. Production fell in the 1960s and early 1970s and then rose again with water flooding. The county produced more than 23 million barrels in 2004, and cumulative production since 1929 reached about 2.78 billion barrels by the end of that year.

The geology runs both ways. A 1998 structural study published through NETL describes the Goldsmith and Andector fields of northern Ector County extending northwest into Andrews County on the eastern edge of the Central Basin Platform. The UT Bureau of Economic Geology also lists Andrews among the Spraberry Trend counties of the Midland Basin.

Decades of waterflooding mean injection wells, pump stations, flowlines and wellbores that have been worked many times. For your MSA and insurance:

• Workovers on old wells raise the question of who pays if the hole is lost. See underground resources and equipment coverage.
• Lease maintenance on aging equipment puts care, custody or control front and center. See what is the care, custody and control exclusion.
• H2S. Rule 36 requires operators to use trained service company personnel where it applies, and to get written certification from you.

Texas lets most private employers choose whether to carry workers' compensation. New Mexico does not.

According to the New Mexico Workers' Compensation Administration, coverage is required for an employer with three or more workers, and for any business engaged in activities licensed under the Construction Industries Licensing Act, regardless of the number of employees.

For an Andrews contractor, that means:

• New Mexico must be on your workers' compensation policy before a crew crosses the line, either as a listed state or under other-states coverage.
• The certificate you send to an operator for New Mexico work should show it.
• If you have been a Texas nonsubscriber, New Mexico work is a different conversation. See what is a Texas nonsubscriber.

See the Permian Basin guide for how Texas coverage treats out-of-state injuries, and the Hobbs and Lovington pages for the New Mexico side.

New Mexico's oilfield anti-indemnity statute, NMSA 56-7-2, voids indemnity tied to a New Mexico oil, gas or water well to the extent it covers the indemnitee's own negligence.

Then it goes further than Texas. Subsection C, added in 1999, says a provision naming a person as an additional insured, or requiring a waiver of subrogation, or otherwise imposing a duty to indemnify that would be void as a direct indemnity agreement, "is against public policy and void."

Texas Chapter 127 takes the other approach: it allows indemnity that is supported by insurance the parties agree to in writing, within limits.

What that means in practice:

• One MSA can behave two different ways depending on which side of the line the well is on.
• A Texas choice-of-law clause may not settle New Mexico work.
• Your additional insured and waiver endorsements may be requested for New Mexico jobs even where the statute would void the requirement.

The attorney reads the indemnity for both states. We make sure the insurance matches. See Texas oilfield anti-indemnity act and what is a waiver of subrogation.

To review an Andrews account, we need:

• the MSA's insurance exhibit and indemnity section,
• a list of Texas counties and New Mexico counties you work,
• your current certificates of insurance and your workers' comp information page,
• any rejection notice from ISNetworld or Avetta, and
• your H2S training records if an operator has asked for Rule 36 certification.

If an operator rejected your certificate because New Mexico is not on your comp policy, that is usually a fixable endorsement, not a new policy. See why was my certificate of insurance rejected.