HILCORP - STATE GAS COM A 1N AND 100S

Hilcorp Energy Company's State Gas Com A 1N and 100S facility sits within a broader Hilcorp portfolio that absorbed two material federal Clean Air Act settlements in the twelve months preceding Q2 2025. On October 17, 2024, EPA and the Department of Justice announced a $9.4 million civil penalty against Hilcorp for Clean Air Act and New Mexico Air Quality Control Act violations tied to well completion operations in New Mexico — the first federal case of its kind against an oil and gas producer for completion-phase emissions [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement]. Well completion is the phase in which oil or gas first reaches the surface after drilling, and the emissions released during that window were the specific violation class EPA pursued. Approximately one month later, on November 21, 2024, EPA, DOJ, and the Pennsylvania Department of the Environment announced a separate $1.275 million civil penalty plus required injunctive projects addressing Clean Air Act violations at Hilcorp's western Pennsylvania operations [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary].

The ECHO exporter snapshot dated May 4, 2026 attributes an allocated $3.76 million 24-month penalty total to the State Gas Com A 1N and 100S facility record (Facility ID 110046350998), derived by prorating the five-year penalty total [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. That figure is an accounting artifact of ECHO's aggregation method, not a site-specific adjudicated fine. Hilcorp is privately held. No 10-K or 10-Q filings exist to frame forward environmental risk, which limits the independent documentary record considerably. The company's own 2025 San Juan regional report claims an 81% reduction in methane emissions from 2023 to 2024 across its San Juan Basin operations [source: https://www.hilcorp.com/wp-content/uploads/2025/05/SJ-2025.pdf]. That self-reported figure sits alongside an active air-quality permit modification for the San Juan Gas Plant currently in public notice [source: https://www.env.nm.gov/public-notices/hilcorp-energy-company-san-juan-gas-plant-2/]. The combination — a headline emissions-reduction claim and a concurrent permit modification at a regionally significant asset — defines the central tension this briefing documents.

The 24-month enforcement record for Hilcorp Energy Company is dominated by two federal Clean Air Act settlements finalized in late 2024. EPA ECHO's exporter snapshot, pulled May 4, 2026, records zero quarters with noncompliance flags for the specific State Gas Com A 1N and 100S facility but allocates a $3.76 million prorated penalty share to that facility identifier [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. The derivation logic — penalty_24mo = total_5yr × 24/60 — means the dollar figure at this single facility reflects an allocation of broader corporate-level penalties, not a site-specific adjudicated fine. Readers should treat the facility-level penalty total as an accounting artifact of the ECHO aggregation method rather than evidence of a violation adjudicated at this specific wellsite.

The larger matter landed first. On October 17, 2024, EPA and DOJ announced the $9.4 million civil penalty resolving Clean Air Act and New Mexico Air Quality Control Act violations at Hilcorp's New Mexico oil and gas production operations, specifically linked to well completion activities [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement]. EPA characterized the action as the first federal case of its kind against an oil and gas producer for CAA and AQCA violations tied to completion-phase operations [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement]. That distinction matters: prior federal enforcement against oil and gas producers had focused on production and processing equipment, not the completion window itself. One month later, on November 21, 2024, EPA, DOJ, and the Pennsylvania DEP announced a second settlement covering Clean Air Act and Pennsylvania-law violations at Hilcorp's western Pennsylvania oil and gas production sites, with a $1.275 million civil penalty plus injunctive compliance projects designed to offset past illegal emissions [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary]. Two federal settlements in five weeks, across two states, signals a pattern of multi-jurisdictional regulatory attention.

State-level activity runs in parallel. The New Mexico Environment Department Air Quality Bureau posted a public notice dated December 10, 2025 for construction permit application 0613M16 covering a modification at Hilcorp's San Juan Gas Plant, located approximately 0.9 miles northeast of Bloomfield in San Juan County, New Mexico [source: https://www.env.nm.gov/public-notices/hilcorp-energy-company-san-juan-gas-plant-2/]. The underlying NMED preliminary determination confirms the facility coordinates (36.7325, -107.966389, NAD27) and identifies the application as a Prevention of Significant Deterioration review [source: https://service.web.env.nm.gov/urls/vfWyKMVi]. Colorado records separately document an Administrative Order by Consent involving Hilcorp at the Myers #21-06CH Well in El Paso County under the state Oil and Gas Conservation Commission's Rule 522.b.(3) framework [source: https://ecmc.state.co.us/orders/orders/1V/436.html]. No 10-K or 10-Q disclosures are available because Hilcorp is privately held.

Action 1 — New Mexico Clean Air Act Stationary Source Settlement. Announced October 17, 2024 by EPA and DOJ. Program: Clean Air Act (federal) and New Mexico Air Quality Control Act (state). Facilities: Hilcorp oil and gas production operations in New Mexico, with violations tied specifically to well completion operations — the phase in which oil or gas is first brought to the surface after drilling. Penalty: $9.4 million civil penalty. EPA described the action as the first federal case of its kind against an oil and gas producer for CAA and AQCA violations associated with well completions [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement]. The scale of the penalty and the novelty of the violation class both distinguish this settlement from prior oil and gas enforcement actions in the federal record.

Action 2 — Pennsylvania Clean Air Act Settlement. Announced November 21, 2024 by EPA, DOJ, and the Pennsylvania Department of the Environment. Program: Clean Air Act (federal) and Pennsylvania state law. Facilities: Hilcorp oil and gas production operations in western Pennsylvania. Penalty: $1.275 million civil penalty, plus required injunctive projects to bring the operations into compliance and offset past illegal emissions, with EPA estimating the projects' compliance cost separately from the cash penalty [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary]. The injunctive component is material: it signals a quantified emissions excess that cash alone could not resolve.

Action 3 — Colorado Oil and Gas Conservation Commission Administrative Order by Consent, Order No. 1V-436, Docket No. 1310-OV-42. Program: Colorado state oil and gas conservation rules, Rule 522.b.(3). Facility: Myers #21-06CH Well, El Paso County, Colorado. Operator: Hilcorp Energy Company (Operator Number 10133). Outcome: administrative order by consent; specific penalty figure not extracted in the research bundle [source: https://ecmc.state.co.us/orders/orders/1V/436.html].

ECHO allocation at the State Gas Com A 1N and 100S facility (Facility ID 110046350998): $3,760,000 prorated 24-month penalty total, zero reported quarters with noncompliance, zero active permits as of the May 4, 2026 exporter pull. Methodology: penalty_24mo = total_5yr × (24/60) [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip].

State Gas Com A 1N and 100S (New Mexico; Facility ID 110046350998). The ECHO exporter snapshot lists this as the sole facility tied to the slug under review, with zero 24-month violation quarters and a prorated $3.76 million penalty allocation [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. The EJ index average reported is 0.0, which reflects unpopulated demographic overlay rather than a confirmed low-exposure finding. That distinction is worth holding: a zero EJ index here is a data-completeness artifact, not an affirmative characterization of community exposure.

San Juan Gas Plant (San Juan County, New Mexico; approximately 0.9 miles northeast of Bloomfield, at 36.7325, -107.966389 NAD27). NMED Air Quality Bureau is processing construction permit application 0613M16 (TEMPO Agency Interest 1177) as a Prevention of Significant Deterioration review, with public notice posted December 10, 2025 [source: https://www.env.nm.gov/public-notices/hilcorp-energy-company-san-juan-gas-plant-2/] [source: https://service.web.env.nm.gov/urls/vfWyKMVi]. The PSD designation places this modification under federal CAA thresholds, adding a layer of federal review to what is already an active state permitting process.

Hilcorp New Mexico well-completion sites (multiple locations across New Mexico). These sites collectively form the subject of the October 17, 2024 $9.4 million federal CAA/AQCA settlement, with EPA citing emissions from well completion operations as the violation class [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement].

Hilcorp western Pennsylvania oil and gas production operations. These sites collectively form the subject of the November 21, 2024 $1.275 million federal CAA settlement plus injunctive compliance projects to offset past emissions [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary].

Myers #21-06CH Well (El Paso County, Colorado; Operator Number 10133). Subject of Colorado ECMC Order No. 1V-436, an administrative order by consent under Rule 522.b.(3) of the state oil and gas conservation rules [source: https://ecmc.state.co.us/orders/orders/1V/436.html].

The ECHO top_pollutants field for Facility ID 110046350998 is empty in the May 4, 2026 exporter snapshot, so pollutant identification must be inferred from the enforcement documents themselves [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. Methane and volatile organic compounds dominate the implied exposure profile. EPA's October 2024 New Mexico settlement addresses well-completion emissions, a phase associated with the release of methane, VOCs including benzene, and associated hazardous air pollutants as gas moves to the surface and is separated [source: https://www.epa.gov/enforcement/hilcorp-energy-company-new-mexico-clean-air-act-stationary-source-settlement]. Benzene is a known human carcinogen regulated under the Clean Air Act's hazardous air pollutant provisions, and its presence during well completion is a recurring concern in federal oil and gas enforcement. Hilcorp's own San Juan Basin disclosure frames methane as the principal tracked pollutant, reporting an 81% reduction in methane emissions from 2023 to 2024 [source: https://www.hilcorp.com/wp-content/uploads/2025/05/SJ-2025.pdf].

Nitrogen oxides form a secondary exposure vector. The Pennsylvania settlement announced November 21, 2024 addresses Clean Air Act violations at oil and gas production sites, a category for which compressor-engine NOx and combustion-related pollutants are common regulated parameters [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary]. The injunctive projects described in that settlement are designed to offset past illegal emissions, indicating a quantified emissions excess rather than a paperwork-only violation [source: https://www.epa.gov/enforcement/hilcorp-energy-company-pennsylvania-settlement-summary]. Quantified excess matters analytically: it means regulators calculated an actual mass of pollutant released above permitted levels.

Hazardous air pollutants associated with natural gas processing — including benzene, toluene, ethylbenzene, and xylenes — are the third exposure vector flagged by the active NMED permit review at the San Juan Gas Plant, which is being processed as a Prevention of Significant Deterioration application under federal CAA thresholds [source: https://service.web.env.nm.gov/urls/vfWyKMVi]. The ECHO EJ index is reported as 0.0, indicating unpopulated demographic data rather than a confirmed low-exposure finding, so EJ exposure for surrounding communities around Bloomfield and across the San Juan Basin cannot be characterized from the available bundle [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip].

Within the ECHO-derived peer set of oil and gas extraction facilities (NAICS 211111/211120/211130), the State Gas Com A 1N and 100S record shows a $3.76 million prorated 24-month penalty allocation and zero reported violation quarters, ranking below all three top peers on both dollar-penalty and violation-quarter metrics [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. Greka Bell Compressor Plant leads the peer group at $26.16 million prorated penalty with zero violation quarters — a pattern that, like the subject facility, reflects corporate-level penalty allocation rather than site-specific adjudication. Red Hills Gas Processing Plant carries eight violation quarters against $19.13 million; HP Gas Pad shows eight violation quarters against $16.13 million [source: https://echo.epa.gov/files/echodownloads/echo_exporter.zip]. All three peers report a 0.0 EJ index average, mirroring the data-completeness limitation seen at the subject facility and indicating that cross-peer EJ comparisons cannot be made from the available snapshot.

Hilcorp is privately held, so no SEC 10-K Item 1A forward-looking risk-factor disclosures are available in the research bundle. The closest forward-looking document is the company's own 2025 San Juan regional disclosure, which frames continued operation of late-life assets as central to its commercial thesis and states that "Renewable energy supply will increase dramatically over the coming decades to help meet this demand while oil and gas demand will plateau and eventually enter a long, slow decline" [source: https://www.hilcorp.com/corporate-responsibility/]. That framing positions Hilcorp as a long-duration operator of maturing infrastructure — a posture that concentrates regulatory exposure in aging equipment rather than new-build assets. The active NMED Prevention of Significant Deterioration review for the San Juan Gas Plant modification (permit 0613M16, public notice dated December 10, 2025) represents the nearest-term regulatory gating item identifiable from the bundle [source: https://www.env.nm.gov/public-notices/hilcorp-energy-company-san-juan-gas-plant-2/]. Until that permit is resolved, the scope of authorized emissions at one of Hilcorp's most significant New Mexico assets remains subject to regulatory determination.