What does an Artesia workover or roustabout outfit need from its insurance?

OCD lists its Artesia office at 506 W. Texas. OCD forms list District II in Artesia, alongside District I in Hobbs. If you work northern and central Eddy County, this is the district office most of your operators deal with on permits, spills and H2S plans.

Artesia is also one of the oldest oil towns in New Mexico. The New Mexico Bureau of Geology notes that water wells drilled in 1909 at Dayton, six miles south of Artesia, came first, and that Permian oil was discovered in the Artesia field in Eddy County in 1923.

The rocks carry the town's name. The USGS geologic names database says the Artesia Group is named from the town and the Artesia field in Eddy County, and includes the Grayburg, Queen, Seven Rivers, Tansill and Yates formations. The Bureau of Geology's 2024 model of Eddy and Lea counties groups the Abo, Yeso and Artesia Group as shelf deposits, the Capitan as the shelf margin, and the Bone Spring and Delaware Mountain Group as basin fill.

In practice, Artesia-area work mixes older shallow shelf wells, which need steady lease maintenance and workover, with Delaware Basin horizontal work in southern Eddy County, which the New Mexico Association of Counties says the Delaware Basin includes. See the Carlsbad page for the basin side.

If your rigs and crews do workover and well servicing, New Mexico's H2S rule sets specific equipment requirements once a well hits 100 ppm or more:

• Standards. Work must be done with due consideration to API RP-68 (well servicing and workover involving H2S) and RP-49, or another standard OCD approves.
• Detection. For workover and well servicing, at least one operational sensing point as close to the wellbore as practical, with more for large or long jobs.
• Well control. A remote-controlled, pressure-rated and H2S-rated well control system that meets API or OCD-approved specs and is operational throughout completion, workover and servicing.
• Equipment. Where a potentially hazardous volume is involved, metallic equipment selected under NACE MR0175 or another approved standard, or corrosion controlled by inhibition.
• Tanks. Stairs and ladders to the top of a tank or vessel holding 300 ppm or more must be chained or marked to restrict entry.

Two insurance questions follow. First, if your well control equipment or tubulars are damaged by H2S, is that loss on you or the operator under the MSA, and does your equipment floater exclude corrosion? Second, does your liability or pollution policy treat an H2S release as pollution? See oilfield equipment insurance and well servicing insurance.

New Mexico requires workers' compensation for employers with three or more workers. Artesia is far enough from Texas that a Texas contractor may think of New Mexico jobs as temporary. New Mexico courts have not treated "temporary" as an exemption.

• In Burns v. Transcon Lines (N.M. Ct. App. 1979), an Oklahoma driver hired in Oklahoma was hurt in New Mexico. The court noted that a 1949 law exempting some out-of-state workers temporarily in New Mexico was repealed in 1973, and held that a transitory employee with a compensable injury in New Mexico is entitled to New Mexico benefits. It also pointed to NMSA 52-1-65, under which benefits paid under another state's law do not bar a New Mexico claim.
• In Saenz v. McCormick Construction Co. (N.M. Ct. App. 1981), a Texas resident was hurt on a temporary job in New Mexico. Texas benefits were paid voluntarily. The court held his later New Mexico suit could go forward because the voluntary payments tolled the filing deadline. The case came from Chaves County.

The takeaway is not legal advice on any one claim. It is that a Texas policy without New Mexico listed can leave you exposed to a New Mexico claim. Put New Mexico on the workers' comp information page, carry employers liability limits that match the MSA, and tell us before you start Eddy County work. See what happens if an employee is hurt on an operator's lease.

On a workover, the operator's representative often sets the program: what to pull, when to kill the well, what pressure to hold. New Mexico's anti-indemnity statute speaks to exactly that.

Under NMSA 56-7-2(A)(3), an indemnity tied to a New Mexico well is void to the extent it covers loss from "an accident that occurs in operations carried on at the direction or under the supervision of the indemnitee, an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee." That sits alongside the bans on indemnity for the operator's own sole or concurrent negligence, and for the negligence of contractors directly responsible to it.

Subsection B defines covered agreements broadly: drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging or otherwise servicing a well, plus any part of that work or an act collateral to it. A roustabout or workover MSA fits.

Two practical points:

• If your MSA has you indemnify the operator for "all claims arising from the work," a New Mexico court may cut that back on these wells. Your attorney reads the contract. We make sure your contractual liability coverage and limits fit what is left.
• Subsection C voids additional insured and waiver of subrogation requirements that would get around the ban. Expect New Mexico operators' certificate requirements to be read with that in mind. See what is contractual liability coverage.

Before your first Eddy County job, line up the paperwork that sits next to the insurance:

• Taxation and Revenue. The New Mexico Taxation and Revenue Department says anyone who engages in business in New Mexico must register, and lists performing services in New Mexico as a source of gross receipts. Registration is free, online through the Taxpayer Access Point or on Form ACD-31015. Talk to your accountant about how gross receipts tax applies to your work.
• WC assessment fee. Employers subject to the Workers' Compensation Act pay a quarterly assessment fee per covered employee to the Taxation and Revenue Department on Form WC-1. This fee is separate from your premium.

Then send us:

• The MSA insurance and indemnity sections.
• Your certificates, WC information page and equipment schedule.
• Your H2S training records if an operator has asked for them.
• Any ISNetworld or Avetta rejection notice.

A licensed insurance specialist reviews it and tells you what to fix. Coverage is placed through a licensed Texas insurance agency. Request a review.