New Era's AI Ambitions Clash with New Mexico Fraud Lawsuit

MIDLAND, TX – December 29, 2025 – A legal firestorm has erupted in the Permian Basin, pitting the state of New Mexico against New Era Energy & Digital, Inc. (Nasdaq: NUAI), a company striving to redefine itself as a leader in artificial intelligence infrastructure. The state has filed a sweeping civil lawsuit accusing the company and its CEO, E. Will Gray II, of orchestrating a complex fraudulent scheme to dodge environmental cleanup costs for hundreds of abandoned oil and gas wells, a charge the company vehemently denies as a "baseless and uninformed attack."

The lawsuit, filed on December 23 by New Mexico Attorney General Raúl Torrez and the state's Oil Conservation Division (OCD), sent shockwaves through the market, causing New Era's stock to plummet by over 41%. The legal battle places the company's ambitious, multi-billion-dollar plans for AI data centers—including a massive campus proposed for New Mexico itself—under a dark cloud of regulatory scrutiny and allegations of environmental malfeasance.

A Lawsuit Alleging Fraud and Environmental Neglect

The state's complaint paints a damning picture, accusing Gray and former business partners of masterminding a scheme to siphon profits from productive wells while shifting the enormous financial liability of non-productive, environmentally hazardous wells onto shell companies designed to fail. The lawsuit alleges this activity was conducted through a web of entities, including Solis Partners, which later became a subsidiary of New Era, and Acacia Operating Company, which eventually collapsed into bankruptcy.

According to the legal filing, this alleged scheme left the state of New Mexico responsible for plugging and remediating hundreds of inactive wells to prevent methane leaks and soil contamination. The state claims Acacia alone is responsible for 219 abandoned wells, with cleanup costs averaging $163,000 per well, a burden now falling on taxpayers. The complaint places Gray at the center of the operation, alleging he controlled a "continuous chain of insider" entities to execute the fraudulent transfers and evade regulatory obligations under the New Mexico Oil and Gas Act.

New Mexico is seeking significant civil penalties, damages, reimbursement for cleanup costs already incurred, and powerful injunctive relief. A successful injunction could bar Gray and his associated companies from operating in the state until all environmental obligations are met, a move that would directly threaten New Era's planned developments in the region.

New Era's Forceful Rebuttal

In a strongly worded public statement, New Era Energy & Digital fired back, promising an aggressive legal defense. The company insists the lawsuit is riddled with "myriad factual errors and misstatements" and that the state made no attempt to contact them before filing the complaint.

"Had the plaintiffs reached out to us, we would have answered their questions," the company stated. "They provided us with no opportunity to refute what we believe are inaccuracies and falsehoods contained in the Lawsuit."

A central pillar of New Era's defense is its categorical denial of any connection to the now-bankrupt entities at the heart of the state's claims. "Neither New Era, nor Chairman and CEO Will Gray, have ever been affiliated with Acacia Operating Company, LLC or Acacia Resources, LLC, nor did New Era or Will Gray scheme to defraud the State," the company declared, arguing this fact renders a large portion of the state's theory "meaningless."

Furthermore, New Era frames the 87 wells specifically mentioned in the suit as "immaterial" to its current operations. It claims the wells no longer fit its business model and were already part of a divestment process as the company shifts its focus entirely toward digital infrastructure. The company emphasized that the allegations do not relate to any assets that would have a "meaningful impact on our near-term business or operations."

A High-Stakes Pivot Under Pressure

The lawsuit comes at a pivotal moment for New Era. The company is in the midst of a dramatic transformation, moving away from its legacy energy roots to capitalize on the explosive demand for AI and data processing. Its strategy hinges on developing vertically integrated, large-scale data center campuses powered by dedicated energy assets.

On the very same day the lawsuit was filed, New Era announced a binding agreement to acquire the remaining 50% of Texas Critical Data Centers LLC (TCDC) for $70 million. This deal gives it full control over a flagship 1+ gigawatt hyperscale data center development outside Odessa, Texas. The company stated its immediate focus is on bringing TCDC into the next phase of development.

Even more ambitiously, New Era has its sights set on New Mexico for future growth. It recently entered a land option agreement for approximately 3,500 acres in Lea County, New Mexico, with plans for a colossal seven-gigawatt AI data center campus. This project, which the company has touted as a major investment in the state, now faces uncertainty as the legal conflict with state regulators intensifies. New Era highlighted its positive economic impact, noting it has already spent over $10 million on state taxes and with local businesses through its subsidiary, Solis Partners.

The clash represents a fundamental tension: a company building a high-tech future is being forced to answer for an industrial past. The outcome of this legal battle will not only determine New Era's ability to operate in New Mexico but will also serve as a crucial test of investor confidence in its leadership and strategic direction. The company has assured stakeholders it "will not be distracted by misguided attacks" and will continue executing its business plan, but the path forward is now complicated by a legal fight for its reputation and its future.