CARLSBAD, N.M. – The bright yellow signs on U.S. 285 are the first indication that things aren't right in Carlsbad.

"US 285 south subject to sinkhole 1,000 feet ahead," motorists are warned.

But there is little other evidence that in southeastern New Mexico's oil country, a giant cavern sits beneath the earth, ready to swallow part of the highway and possibly a church, several businesses and a trailer park.

The cavern was formed over three decades as oil field service companies pumped fresh water into a salt layer more than 400 feet below the surface and extracted several million barrels of brine to help with drilling. State regulators flagged it as a potential danger after concluding that it was similar to two wells northwest of Carlsbad that collapsed without warning last year.

Eugene Irby is the owner of the company that ran the well site.

Irby said Monday, "It's kinda what we call the Chicken Little syndrome. All of a sudden they are running around with their heads cut off." He thinks the oil conservation district, which issued the warning about a possible collapse, is just over-reacting because of the other brine hole sinkholes in the area last year.

"The problem with our Carlsbad well, is they had us plug it, so there is no way to do any scientific study on it," Irby said.

Irby says nobody can really know how big the underground well is.

UPDATE

ALBUQUERQUE, N.M. (AP) - The state of New Mexico has spent more than a half-million dollars investigating and monitoring a giant cavern in southeastern New Mexico, and now it wants the company responsible for the property to pay up.

State officials say the extraction of millions of barrels of brine from a salt layer deep underground has resulted in the cavern in Carlsbad.

The state Oil Conservation Division is monitoring the site, hoping to detect the earliest signs of a cave-in that could possibly take with it part of a highway, a church, a trailer park and an irrigation canal.

The agency has sent a letter to I&W Inc., demanding reimbursement of $563,420, as well as a plan for assuming responsibility for the now-shuttered brine well operation.

I&W did not return calls seeking comment.