New Mexico 2025 Regular Session Status: Enacted 4 D cosponsors

SB 23 — OIL & GAS ROYALTY RATE CHANGES

Last action — Signed

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed House
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced January 21, 2025. Enacted.

Signed by Governor Michelle Lujan Grisham (Democratic) on April 11, 2025.

Odds of enactment

High chance

Based on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.

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Prognosis

Advancing 58% · moderate confidence

  • Enacted

    Current position in the legislative process.

  • 4 sponsors

    4 primary, 0 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (4 D).

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

510 added · 408 removed

Plain-language change summary

The updated version of Bill SB 23 specifies that the commissioner of public lands cannot cancel leases unless the lessee fails to comply with specific lease terms. Additionally, the "Development Form" for oil and gas leases on restricted lands has been streamlined. This change is important because it aims to provide more clarity and stability for leaseholders, ensuring that they are not at risk of losing their leases without proper cause.

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SENATE FINANCE COMMITTEE SUBSTITUTE FOR SENATE BILL 23 57TH LEGISLATURE -STATEOFNEWMEXICO- FIRST SESSION, 2025 4 6 8 10 AN ACT RELATING TO PUBLIC LANDS;
AN ACT RELATING TO PUBLIC LANDS;
16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
e t 17 SECTION 1.
SECTION 1.
Section 19-10-4.3 NMSA 1978 (being Laws 1985, w l n d 18 Chapter 195, Section 5) is amended to read:
Section 19-10-4.3 NMSA 1978 (being Laws 1985, Chapter 195, Section 5) is amended to read:
= = 19 a l "19-10-4.3.
"19-10-4.3.
DEVELOPMENT FORM OF LEASE--PREMIUM RESTRICTED i a e r 20 LAND.-- a t m m 21 A.
DEVELOPMENT FORM OF LEASE--PREMIUM RESTRICTED LAND.-- A.
The commissioner shall not cancel leases except d r e 22 upon failure or default of the lessee to comply with any of the c e s k 23 provisions or covenants within the lease described in e a n b 24 Subsection B of this section.
The commissioner shall not cancel leases except upon failure or default of the lessee to comply with any of the provisions or covenants within the lease described in Subsection B of this section.
u [ B.
B.
The following form is designed as the .231011.2 SFC/SB 23 "Development Form".
The following form is designed as the "Development Form".
_____________________ APPLICATION NO.
___________________ APPLICATION NO.
______________ OIL AND GAS LEASE (Development Form) This agreement, dated ____________________, [19] 20___, between the state of New Mexico, acting by and through its commissioner of public lands, hereinafter called the "lessor", and _________________________________________________________, whose address is ____________________________________________ _____________________________________________________________, hereinafter called the "lessee", WITNESSETH:
______________ OIL AND GAS LEASE (Development Form) This agreement, dated ____________________, 20___, between the state of New Mexico, acting by and through its SFC/SB 23 Page 1 commissioner of public lands, hereinafter called the "lessor", and_______________________________________________, whose address is ___________________________________________ ____________________________________________________________, hereinafter called the "lessee", WITNESSETH:
WHEREAS, the lessee has filed in the office of the commissioner of public lands an application for an oil and gas e t 17 lease covering the lands hereinafter described and has tendered w l n d 18 therewith the required first payment;
WHEREAS, the lessee has filed in the office of the commissioner of public lands an application for an oil and gas lease covering the lands hereinafter described and has tendered therewith the required first payment;
and = = 19 WHEREAS, all of the requirements of law relative to the a l i a e r 20 application and tender have been duly complied with;
and WHEREAS, all of the requirements of law relative to the application and tender have been duly complied with;
a t m m 21 THEREFORE, in consideration of the premises as well as the d r e 22 sum of _______________________________________________________ c e s k 23 dollars ($________________), the same being the amount of the e a n b 24 tender above mentioned, and the further sum of $___________ u [ filing fee, and of the covenants and agreements hereinafter .231011.2 - 2 - SFC/SB 23 contained, the lessor does hereby grant, demise, lease and let unto the [said] lessee, exclusively, for the sole and only purpose of exploration, development and production of oil or gas (including carbon dioxide and helium), or both thereon and therefrom with the right to own all oil and gas so produced and saved therefrom and not reserved as royalty by the lessor under the terms of this lease, together with [rights-of-way] rights of way, easements and servitudes for pipelines, telephone lines, tanks, power houses, stations, gasoline plants and fixtures for producing, treating and caring for such products and housing and boarding employees and any and all rights and privileges necessary, incident to or convenient for the economical operation of [said] the land, for oil and gas, with right for such purposes to the free use of oil, gas, casing- head gas or water from [said] the lands, but not from the lessor's water wells, and with the rights of removing either e t 17 during or after the term hereof, all and any improvements w l n d 18 placed or erected on the premises by the lessee, including the = = 19 right to pull all casing, subject, however, to the covenants a l i a e r 20 and conditions hereinafter set out, the following described a t m m 21 land situated in the county of ___________, state of New d r e 22 Mexico, and more particularly described as follows:
THEREFORE, in consideration of the premises as well as the sum of___________________________________________________ dollars ($________________), the same being the amount of the tender above mentioned, and the further sum of $___________ filing fee, and of the covenants and agreements hereinafter contained, the lessor does hereby grant, demise, lease and let unto the lessee, exclusively, for the sole and only purpose of exploration, development and production of oil or gas (including carbon dioxide and helium), or both thereon and therefrom with the right to own all oil and gas so produced and saved therefrom and not reserved as royalty by the lessor under the terms of this lease, together with rights of way, easements and servitudes for pipelines, SFC/SB 23 Page 2 telephone lines, tanks, power houses, stations, gasoline plants and fixtures for producing, treating and caring for such products and housing and boarding employees and any and all rights and privileges necessary, incident to or convenient for the economical operation of the land, for oil and gas, with right for such purposes to the free use of oil, gas, casing-head gas or water from the lands, but not from the lessor's water wells, and with the rights of removing either during or after the term hereof, all and any improvements placed or erected on the premises by the lessee, including the right to pull all casing, subject, however, to the covenants and conditions hereinafter set out, the following described land situated in the county of _________, state of New Mexico, and more particularly described as follows:
c e s k 23 Line SUBDIVISION Sec.
Line SUBDIVISION Sec.
Acres Institution e a n b 24 1 _____________________________________________________________ u [ 2 _____________________________________________________________ .231011.2 - 3 - SFC/SB 23 3 _____________________________________________________________ 4 _____________________________________________________________ 5 _____________________________________________________________ 6 _____________________________________________________________ 7 _____________________________________________________________ [Said] The lands having been awarded to the lessee and designated as Tract No.
Acres Institution 1 ___________________________________________________________ 2 ___________________________________________________________ 3 ___________________________________________________________ 4 ___________________________________________________________ 5 ___________________________________________________________ 6 ___________________________________________________________ 7 ___________________________________________________________ The lands having been awarded to the lessee and designated as Tract No.
____________ at a public sale held by the commissioner of public lands on ____________________, [19] 20___.
____________ at a public sale held by SFC/SB 23 Page 3 the commissioner of public lands on ____________________, 20___.
To have and to hold [said] the land, and all the rights and privileges granted hereunder, to and unto the lessee for a primary term of five years from the date hereof, and as long thereafter as oil and gas, or either of them, is produced in paying quantities from [said] the land by the lessee, subject to all of the terms and conditions as hereinafter set forth.
To have and to hold the land, and all the rights and privileges granted hereunder, to and unto the lessee for a primary term of five years from the date hereof, and as long thereafter as oil and gas, or either of them, is produced in paying quantities from the land by the lessee, subject to all of the terms and conditions as hereinafter set forth.
In consideration of the premises, the parties covenant and e t 17 agree as follows:
In consideration of the premises, the parties covenant and agree as follows:
w l n d 18 1.
1.
Subject to the free use without royalty, as = = 19 hereinbefore provided, the lessee shall pay the lessor as a l i a e r 20 royalty ________ (not less than three-sixteenths nor more than a t m m 21 one-fifth, or alternatively, not less than one-fifth nor more d r e 22 than one-fourth if the leased premises is located in whole or c e s k 23 in part within the following portions of the restricted e a n b 24 districts established pursuant to Section 19-10-16 NMSA 1978:
Subject to the free use without royalty, as hereinbefore provided, the lessee shall pay the lessor as royalty ________ (not less than three-sixteenths nor more than one-fifth, or alternatively, not less than one-fifth nor more than one-fourth if the leased premises is located in whole or in part within the following portions of the restricted districts established pursuant to Section 19-10-16 NMSA 1978:
u [ townships 8 to 10 south inclusive, ranges 31 to 38 east .231011.2 - 4 - SFC/SB 23 inclusive;
townships 8 to 10 south inclusive, ranges 31 to 38 east inclusive;
or townships 21 to 26 south inclusive, ranges 21 to 38 east inclusive, N.M.P.M.) part of the oil produced and saved from the leased premises or the cash value thereof, at the option of the lessor, such value to be the price prevailing the day oil is run into a pipeline, if the oil be run into a pipeline, or into storage tanks, if the oil is stored.
or townships 21 to 26 south inclusive, ranges 21 to 38 east inclusive, N.M.P.M.) part of the oil produced and saved from the leased premises or the cash value thereof, at the option of the lessor, such value SFC/SB 23 Page 4 to be the price prevailing the day oil is run into a pipeline, if the oil be run into a pipeline, or into storage tanks, if the oil is stored.
Subject to the free use without royalty, as hereinbefore provided, at the option of the lessor at any time and from time to time, the lessee shall pay the lessor as royalty ________ (not less than three-sixteenths nor more than one-fifth, or alternatively, not less than one-fifth nor more than one-fourth if the leased premises is located in whole or in part within the following portions of the restricted e t 17 districts established pursuant to Section 19-10-16 NMSA 1978:
Subject to the free use without royalty, as hereinbefore provided, at the option of the lessor at any time and from time to time, the lessee shall pay the lessor as royalty ________ (not less than three-sixteenths nor more than one-fifth, or alternatively, not less than one-fifth nor more than one-fourth if the leased premises is located in whole or in part within the following portions of the restricted districts established pursuant to Section 19-10-16 NMSA 1978:
w l n d 18 townships 8 to 10 south inclusive, ranges 31 to 38 east = = 19 inclusive;
townships 11 to 15 south inclusive, ranges 31 to 38 a l i a e r 20 east inclusive;
townships 16 to 20 south inclusive, ranges 21 a t m m 21 to 39 east inclusive;
township 20.5 south, ranges 21 to 23 east d r e 22 inclusive;
or townships 21 to 26 south inclusive, ranges 21 to c e s k 23 38 east inclusive, N.M.P.M.) part of the gas produced and saved e a n b 24 from the leased premises, including casing-head gas.
Unless u [ [said] the option is exercised by the lessor, the lessee shall .231011.2 - 5 - SFC/SB 23 pay the lessor as royalty ________ (not less than three- sixteenths nor more than one-fifth, or alternatively, not less than one-fifth nor more than one-fourth if the leased premises is located in whole or in part within the following portions of the restricted districts established pursuant to Section 19-10-16 NMSA 1978:
or townships 21 to 26 south inclusive, ranges 21 to 38 east inclusive, N.M.P.M.) part of the gas produced and saved from the leased premises, including casing-head gas.
Unless the option is exercised by the lessor, the lessee shall pay the lessor as royalty ________ (not less than three-sixteenths nor more than one-fifth, or alternatively, not less than one-fifth nor more than one-fourth if the leased premises is located in whole or in part within the following portions of the restricted districts established pursuant to Section 19-10-16 NMSA 1978:
SFC/SB 23 Page 5 townships 8 to 10 south inclusive, ranges 31 to 38 east inclusive;
townships 11 to 15 south inclusive, ranges 31 to 38 east inclusive;
townships 16 to 20 south inclusive, ranges 21 to 39 east inclusive;
township 20.5 south, ranges 21 to 23 east inclusive;
provided, however, the cash value for royalty purposes of carbon dioxide gas and of hydrocarbon gas e t 17 delivered to a gasoline plant for extraction of liquid w l n d 18 hydrocarbons shall be equal to the net proceeds derived from = = 19 the sale of such gas, including any liquid hydrocarbons a l i a e r 20 recovered therefrom.
provided, however, the cash value for royalty purposes of carbon dioxide gas and of hydrocarbon gas delivered to a gasoline plant for extraction of liquid hydrocarbons shall be equal to the net proceeds derived from the sale of such gas, including any liquid hydrocarbons recovered therefrom.
a t m m 21 Notwithstanding the foregoing provisions, the lessor may d r e 22 require the payment of royalty for all or any part of the gas c e s k 23 produced and saved under this lease and marketed or [utilized] e a n b 24 used at a price per m.c.f.
Notwithstanding the foregoing provisions, the lessor may require the payment of royalty for all or any part of the gas produced and saved under this lease and marketed or used at a price per m.c.f.
equal to the maximum price being u [ paid for gas of like kind and quality and under like conditions .231011.2 - 6 - SFC/SB 23 in the same field or area or may reduce the royalty value of any such gas (to any amount not less than the net proceeds of sale thereof, in the field) if the commissioner of public lands shall determine such action to be necessary to the successful operation of the lands for oil or gas purposes or to encouragement [or] of the greatest ultimate recovery of oil or gas or to the promotion or conservation of oil or gas or in the public interest.
equal to the maximum price being paid for gas of like kind and quality and under like conditions in the same field or area or may reduce the royalty value of any such gas (to any amount not less than the net proceeds of sale thereof, in the field) if the commissioner of public lands shall determine such action to be necessary to the successful operation of the lands for oil or gas purposes or SFC/SB 23 Page 6 to encouragement of the greatest ultimate recovery of oil or gas or to the promotion or conservation of oil or gas or in the public interest.
This lease shall not expire at the end of the primary term hereof if there is a well capable of producing gas in paying quantities located upon some part of the lands embraced herein, or upon lands pooled or communitized herewith, where such well is shut-in due to the inability of the lessee to obtain a pipeline connection or to market the gas therefrom, and if the lessee timely pays an annual royalty on or before the annual rental paying date next ensuing after the expiration e t 17 of ninety days from the date [said] the well was shut-in and on w l n d 18 or before [said] the rental date thereafter.
This lease shall not expire at the end of the primary term hereof if there is a well capable of producing gas in paying quantities located upon some part of the lands embraced herein, or upon lands pooled or communitized herewith, where such well is shut-in due to the inability of the lessee to obtain a pipeline connection or to market the gas therefrom, and if the lessee timely pays an annual royalty on or before the annual rental paying date next ensuing after the expiration of ninety days from the date the well was shut-in and on or before the rental date thereafter.
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The payment of = = 19 [said] the annual royalty shall be considered for all purposes a l i a e r 20 the same as if gas were being produced in paying quantities and a t m m 21 upon the commencement of marketing of gas from [said] the well d r e 22 or wells the royalty paid for the lease year in which the gas c e s k 23 is first marketed shall be credited upon the royalty payable e a n b 24 hereunder to the lessor for such year.
The payment of the annual royalty shall be considered for all purposes the same as if gas were being produced in paying quantities and upon the commencement of marketing of gas from the well or wells the royalty paid for the lease year in which the gas is first marketed shall be credited upon the royalty payable hereunder to the lessor for such year.
The provisions of this u [ section shall also apply where gas is being marketed from .231011.2 - 7 - SFC/SB 23 [said] the leasehold premises and through no fault of the lessee, the pipeline connection or market is lost or ceases, in which case this lease shall not expire so long as [said] the annual royalty is paid as herein provided.
The provisions of this section shall also apply where gas is being marketed from the leasehold premises and through no fault of the lessee, the pipeline connection or market is lost or ceases, in which case this lease shall not expire so long as the annual royalty is paid as herein provided.
The amount of any annual royalty payable under this section shall equal twice the annual rental due by the lessee under the terms of this lease but not less than three hundred twenty dollars ($320) per well per year;
The amount of any annual royalty payable under this section shall SFC/SB 23 Page 7 equal twice the annual rental due by the lessee under the terms of this lease but not less than three hundred twenty dollars ($320) per well per year;
provided further, that no annual royalty shall be payable under this section if equivalent amounts are timely paid pursuant to another lease issued by the lessor and if such other lease includes lands communitized with lands granted hereunder for the purpose of e t 17 prorationally sharing in the shut-in well.
provided further, that no annual royalty shall be payable under this section if equivalent amounts are timely paid pursuant to another lease issued by the lessor and if such other lease includes lands communitized with lands granted hereunder for the purpose of prorationally sharing in the shut-in well.
Notwithstanding the w l n d 18 provisions of this section to the contrary, this lease shall = = 19 not be continued after five years from the date hereof for any a l i a e r 20 period of more than ten years by the payment of [said] the a t m m 21 annual royalty unless, for good cause shown, the commissioner d r e 22 of public lands, in [his] the commissioner's discretion, grants c e s k 23 such a continuance.
Notwithstanding the provisions of this section to the contrary, this lease shall not be continued after five years from the date hereof for any period of more than ten years by the payment of the annual royalty unless, for good cause shown, the commissioner of public lands, in the commissioner's discretion, grants such a continuance.
e a n b 24 [3.] 4.
4.
The lessee agrees to make full settlement on the u [ twentieth day of each month for all royalties due the lessor .231011.2 - 8 - SFC/SB 23 for the preceding month, under this lease, and to permit the lessor or its agents, at all reasonable hours, to examine the lessee's books relating to the production and disposition of oil and gas produced.
The lessee agrees to make full settlement on the twentieth day of each month for all royalties due the lessor for the preceding month, under this lease, and to permit the lessor or its agents, at all reasonable hours, to examine the lessee's books relating to the production and disposition of oil and gas produced.
The lessee further agrees to submit to the lessor annually upon forms furnished by the lessor, verified reports showing the lessee's operations for the preceding year.
The lessee further agrees to submit to the lessor annually upon forms furnished by the lessor, SFC/SB 23 Page 8 verified reports showing the lessee's operations for the preceding year.
[4.] 5.
5.
In the event the lessee shall elect to surrender any or all of [said] the acreage, [he] the lessee shall deliver to the e t 17 lessor a duly executed release thereof and in event [said] the w l n d 18 lease has been recorded then [he] the lessee shall upon request = = 19 furnish and deliver to the lessor a certified copy of a duly a l i a e r 20 recorded release.
In the event the lessee shall elect to surrender any or all of the acreage, the lessee shall deliver to the lessor a duly executed release thereof and in event the lease has been recorded then the lessee shall upon request furnish and deliver to the lessor a certified copy of a duly recorded release.
a t m m 21 [5.] 6.
6.
The lessee may at any time by paying to the d r e 22 lessor all amounts then due as provided herein and the further c e s k 23 sum of forty dollars ($40.00), surrender and cancel this lease e a n b 24 insofar as the same covers all or any portion of the lands u [ herein leased and be relieved from further obligations or .231011.2 - 9 - SFC/SB 23 liability hereunder, in the manner as hereinbefore provided.
The lessee may at any time by paying to the lessor all amounts then due as provided herein and the further sum of forty dollars ($40.00), surrender and cancel this lease insofar as the same covers all or any portion of the lands herein leased and be relieved from further obligations or liability hereunder, in the manner as hereinbefore provided.
Provided, this surrender clause and the option herein reserved to the lessee shall cease and become absolutely inoperative immediately and concurrently with the institution of any suit in any court of law or equity by the lessee, lessor or any assignee, to enforce this lease, or any of its terms expressed or implied.
Provided, this surrender clause and the option herein reserved to the lessee shall cease and become absolutely inoperative immediately and concurrently with the institution of any suit in any court of law or equity by the lessee, SFC/SB 23 Page 9 lessor or any assignee, to enforce this lease, or any of its terms expressed or implied.
[6.] 7.
7.
[7.] 8.
8.
Upon approval in writing by the lessor of an e t 17 assignment, the assignor shall stand relieved from all w l n d 18 obligations to the lessor with respect to the lands embraced in = = 19 the assignment and the lessor shall likewise be relieved from a l i a e r 20 all obligations to the assignor as to such tracts, and the a t m m 21 assignee shall succeed to all of the rights and privileges of d r e 22 the assignor with respect to such tracts and shall be held to c e s k 23 have assumed all of the duties and obligations of the assignor e a n b 24 to the lessor as to such tracts.
Upon approval in writing by the lessor of an assignment, the assignor shall stand relieved from all obligations to the lessor with respect to the lands embraced in the assignment and the lessor shall likewise be relieved from all obligations to the assignor as to such tracts, and the assignee shall succeed to all of the rights and privileges of the assignor with respect to such tracts and shall be held to have assumed all of the duties and obligations of the assignor to the lessor as to such tracts.
u [ [8.] 9.
9.
In the event a well or wells producing oil or gas .231011.2 - 10 - SFC/SB 23 in paying quantities should be brought in on adjacent land [which] that is draining the leased premises, the lessee shall drill such offset well or wells as a reasonably prudent operator would drill under the same or similar circumstances, provided that no such offset well shall be required if compensatory royalties are paid pursuant to an agreement between the lessor and the lessee.
In the event a well or wells producing oil or gas in paying quantities should be brought in on adjacent land that is draining the leased premises, the lessee shall drill such offset well or wells as a reasonably prudent operator would drill under the same or similar circumstances, provided that SFC/SB 23 Page 10 no such offset well shall be required if compensatory royalties are paid pursuant to an agreement between the lessor and the lessee.
[9.] 10.
10.
If any lands embraced in this lease shall be included in any deed or contract of purchase outstanding and subsisting e t 17 issued pursuant to any sale made of the surface of such lands w l n d 18 prior to the date of this lease, it is agreed and understood = = 19 that no drilling operation shall be commenced on any such lands a l i a e r 20 so sold unless and until the lessee shall have filed a good and a t m m 21 sufficient bond with the lessor as required by law, to secure d r e 22 the payment for such damage to the livestock, range, water, c e s k 23 crops or tangible improvements on such lands as may be suffered e a n b 24 by the purchaser holding such deed or contract of purchase, or u [ [his] the purchaser's successors, by reason of the .231011.2 - 11 - SFC/SB 23 developments, use and occupation of such lands by such lessee.
If any lands embraced in this lease shall be included in any deed or contract of purchase outstanding and subsisting issued pursuant to any sale made of the surface of such lands prior to the date of this lease, it is agreed and understood that no drilling operation shall be commenced on any such lands so sold unless and until the lessee shall have filed a good and sufficient bond with the lessor as required by law, to secure the payment for such damage to the livestock, range, water, crops or tangible improvements on such lands as may be suffered by the purchaser holding such deed or contract of purchase, or the purchaser's successors, by reason of the developments, use and occupation of such lands by such lessee.
[10.] 11.
SFC/SB 23 Page 11 11.
In drilling wells, all water-bearing strata shall be noted in the log, and the lessor reserves the right to require that all or any part of the casing shall be left in any nonproductive well when the lessor deems it to the interest of the beneficiaries of the lands granted hereunder to maintain [said] the well or wells for water.
In drilling wells, all water-bearing strata shall be noted in the log, and the lessor reserves the right to require that all or any part of the casing shall be left in any nonproductive well when the lessor deems it to the interest of the beneficiaries of the lands granted hereunder to maintain the well or wells for water.
[11.] 12.
12.
The lessee shall be liable and agree to pay for all damages to the range, livestock, growing crops or improvements caused by the lessee's operations on [said] the lands.
The lessee shall be liable and agree to pay for all damages to the range, livestock, growing crops or improvements caused by the lessee's operations on the lands.
When requested by the lessor, the lessee shall bury e t 17 pipelines below plow depth.
When requested by the lessor, the lessee shall bury pipelines below plow depth.
w l n d 18 [12.] 13.
13.
The lessee shall not remove any machinery or = = 19 fixtures placed on [said] the premises, nor draw the casing a l i a e r 20 from any well unless and until all payments and obligations due a t m m 21 the lessor under the terms of this agreement shall have been d r e 22 paid or satisfied.
The lessee shall not remove any machinery or fixtures placed on the premises, nor draw the casing from any well unless and until all payments and obligations due the lessor under the terms of this agreement shall have been paid or satisfied.
The lessee's right to remove the casing is c e s k 23 subject to the provision of Paragraph [10] 11 above.
The lessee's right to remove the casing is subject to the provision of Paragraph 11 above.
e a n b 24 [13.] 14.
14.
Upon failure or default of the lessee to comply u [ with any of the provisions or covenants hereof, the lessor is .231011.2 - 12 - SFC/SB 23 hereby authorized to cancel this lease and such cancellation shall extend to and include all rights hereunder as to the whole of the tract so claimed, or possessed by the lessee, but shall not extend to, nor affect the rights of any other lessee or assignee claiming any portion of the lands upon which no default has been made;
Upon failure or default of the lessee to comply with any of the provisions or covenants hereof, the lessor is hereby authorized to cancel this lease and such cancellation shall extend to and include all rights hereunder as to the whole of the tract so claimed, or possessed by the lessee, but shall not extend to, nor affect the rights of any other SFC/SB 23 Page 12 lessee or assignee claiming any portion of the lands upon which no default has been made;
provided, however, that before any such cancellation shall be made, the lessor shall mail to the lessee so defaulting, by registered or certified mail, addressed to the post office address of such lessee as shown by the records of the state land office, a notice of intention of cancellation specifying the default for which cancellation is to be made, and if within thirty days from the date of mailing [said] the notice the [said] lessee shall remedy the default specified in [said] the notice, cancellation shall not be made.
provided, however, that before any such cancellation shall be made, the lessor shall mail to the lessee so defaulting, by registered or certified mail, addressed to the post office address of such lessee as shown by the records of the state land office, a notice of intention of cancellation specifying the default for which cancellation is to be made, and if within thirty days from the date of mailing the notice the lessee shall remedy the default specified in the notice, cancellation shall not be made.
[14.] 15.
15.
If this lease shall have been maintained in accordance with the provisions hereof and if at the expiration e t 17 of the primary term provided for herein oil or gas is not being w l n d 18 produced on [said] the land but the lessee is then engaged in = = 19 bona fide drilling or reworking operations thereon, this lease a l i a e r 20 shall remain in full force and effect so long as such a t m m 21 operations are diligently prosecuted and, if they result in the d r e 22 production of oil or gas, so long thereafter as oil and gas in c e s k 23 paying quantities, or either of them, is produced from [said] e a n b 24 the land;
If this lease shall have been maintained in accordance with the provisions hereof and if at the expiration of the primary term provided for herein oil or gas is not being produced on the land but the lessee is then engaged in bona fide drilling or reworking operations thereon, this lease shall remain in full force and effect so long as such operations are diligently prosecuted and, if they result in the production of oil or gas, so long thereafter as oil and gas in paying quantities, or either of them, is produced from the land;
provided, however, such operations extending beyond u [ the primary term shall be approved by the lessor upon written .231011.2 - 13 - SFC/SB 23 application filed with the lessor on or before the expiration of [said] the term, and a report of the status of all of such operations shall be made by the lessee to the lessor every thirty days and a cessation of such operations for more than twenty consecutive days shall be considered as an abandonment of such operations and this lease shall thereupon terminate.
provided, however, such operations extending beyond the primary term shall be approved by the lessor upon written application filed with the lessor on or before the expiration of the term, and a report of the status of all of such operations shall be made SFC/SB 23 Page 13 by the lessee to the lessor every thirty days and a cessation of such operations for more than twenty consecutive days shall be considered as an abandonment of such operations and this lease shall thereupon terminate.
If during the drilling or reworking of any well under this section, the lessee loses or junks the hole or well and after diligent efforts in good faith is unable to complete [said] the operations, then within twenty days after the abandonment of [said] the operations, the lessee may commence another well within three hundred thirty feet of the lost or junked hole or well and drill the same with due diligence.
If during the drilling or reworking of any well under this section, the lessee loses or junks the hole or well and after diligent efforts in good faith is unable to complete the operations, then within twenty days after the abandonment of the operations, the lessee may commence another well within three hundred thirty feet of the lost or junked hole or well and drill the same with due diligence.
Operations commenced and continued as herein provided shall extend this lease as to all lands as to which the same is in full force and effect as of the time [said] the drilling e t 17 operations are commenced;
Operations commenced and continued as herein provided shall extend this lease as to all lands as to which the same is in full force and effect as of the time the drilling operations are commenced;
provided, however, this lease shall w l n d 18 be subject to cancellation in accordance with Paragraph [13] 14 = = 19 hereof for failure to pay rentals or file reports [which] that a l i a e r 20 may become due while operations are being conducted hereunder.
provided, however, this lease shall be subject to cancellation in accordance with Paragraph 14 hereof for failure to pay rentals or file reports that may become due while operations are being conducted hereunder.
a t m m 21 [15.] 16.
16.
Should production of oil and gas or either of d r e 22 them in paying quantities be obtained while this lease is in c e s k 23 force and effect and should thereafter cease from any cause e a n b 24 after the expiration of five years from the date hereof, this u [ lease shall not terminate if the lessee commences additional .231011.2 - 14 - SFC/SB 23 drilling or reworking operations within sixty days after the cessation of such production and shall remain in full force and effect so long as such operations are prosecuted in good faith with no cessation of more than twenty consecutive days, and if such operations result in the production of oil or gas in paying quantities, so long thereafter as oil or gas in paying quantities is produced from [said] the land;
Should production of oil and gas or either of them in paying quantities be obtained while this lease is in force and effect and should thereafter cease from any cause after the expiration of five years from the date hereof, this lease shall not terminate if the lessee commences additional drilling or reworking operations within sixty days after the cessation of such production and shall remain in full force SFC/SB 23 Page 14 and effect so long as such operations are prosecuted in good faith with no cessation of more than twenty consecutive days, and if such operations result in the production of oil or gas in paying quantities, so long thereafter as oil or gas in paying quantities is produced from the land;
[16.] 17.
17.
Lessees, including their heirs, assigns, agents and contractors, shall at their own expense fully comply with e t 17 all laws, regulations, rules, ordinances and requirements of w l n d 18 the city, county, state and federal authorities and agencies, = = 19 in all matters and things affecting the premises and operations a l i a e r 20 thereon [which] that may be enacted or promulgated under the a t m m 21 governmental police powers pertaining to public health and d r e 22 welfare, including but not limited to conservation, sanitation, c e s k 23 aesthetics, pollution, cultural properties, fire and ecology.
Lessees, including their heirs, assigns, agents and contractors, shall at their own expense fully comply with all laws, regulations, rules, ordinances and requirements of the city, county, state and federal authorities and agencies, in all matters and things affecting the premises and operations thereon that may be enacted or promulgated under the governmental police powers pertaining to public health and welfare, including but not limited to conservation, sanitation, aesthetics, pollution, cultural properties, fire and ecology.
e a n b 24 Such agencies are not to be deemed third party beneficiaries u [ hereunder, however this clause is enforceable by the lessor in .231011.2 - 15 - SFC/SB 23 any manner provided in this lease or by law.
Such agencies are not to be deemed third party beneficiaries hereunder, however this clause is enforceable by the lessor in any manner provided in this lease or by law.
[17.] 18.
SFC/SB 23 Page 15 18.
[18.] 19.
19.
The lessor reserves a continuing option to purchase at any time and from time to time, at the market price prevailing in the area on the date of purchase, all or any part of the minerals (oil and gas) that will be produced from the e t 17 lands covered by this lease.
The lessor reserves a continuing option to purchase at any time and from time to time, at the market price prevailing in the area on the date of purchase, all or any part of the minerals (oil and gas) that will be produced from the lands covered by this lease.
w l n d 18 [19.] 20.
20.
The lessor reserves the right to execute leases = = 19 for geothermal resource development and operation thereon;
The lessor reserves the right to execute leases for geothermal resource development and operation thereon;
the a l i a e r 20 right to sell or dispose of the geothermal resources of such a t m m 21 lands;
the right to sell or dispose of the geothermal resources of such lands;
and the right to grant rights of way and easements for d r e 22 these purposes.
and the right to grant rights of way and easements for these purposes.
c e s k 23 [20.] 21.
21.
All terms of this agreement shall extend to and e a n b 24 bind the heirs, executors, administrators, successors and u [ assigns of the parties hereto.
All terms of this agreement shall extend to and bind the heirs, executors, administrators, successors and assigns of the parties hereto.
.231011.2 - 16 - SFC/SB 23 In witness whereof, the party of the first part has [hereunto] signed and caused its name to be signed by its commissioner of public lands [thereunto] duly authorized, with the seal of [his] office affixed, and the lessee has signed this agreement the day and year first above written.
In witness whereof, the party of the first part has SFC/SB 23 Page 16 signed and caused its name to be signed by its commissioner of public lands duly authorized, with the seal of office affixed, and the lessee has signed this agreement the day and year first above written.
PUBLIC SALE OF RESTRICTED DISTRICT LEASES-- TIME--REGULATIONS--NOTICE--MINIMUM BONUS--SEALED BIDS OR PUBLIC AUCTION AUTHORIZED--SITE OF SALE--PUBLICATION OF NOTICE-- e t 17 REJECTION OF BIDS--COMPLETION OF TRANSACTION.-- w l n d 18 A.
PUBLIC SALE OF RESTRICTED DISTRICT LEASES-- TIME--REGULATIONS--NOTICE--MINIMUM BONUS--SEALED BIDS OR PUBLIC AUCTION AUTHORIZED--SITE OF SALE--PUBLICATION OF NOTICE--REJECTION OF BIDS--COMPLETION OF TRANSACTION.-- A.
The commissioner shall hold a public sale of oil = = 19 and gas leases upon lands [which] that may be open to lease and a l i a e r 20 embraced within the restricted district or districts created a t m m 21 and [which] that may be created under Section 19-10-16 NMSA d r e 22 1978 on the third Tuesday of each month or on the next business c e s k 23 day following, where the third Tuesday falls on a legal e a n b 24 holiday, and shall offer for lease such lands in designated u [ tracts to the highest and best bidder.
The commissioner shall hold a public sale of oil and gas leases upon lands that may be open to lease and embraced within the restricted district or districts created and that may be created under Section 19-10-16 NMSA 1978 on the third Tuesday of each month or on the next business day following, where the third Tuesday falls on a legal holiday, and shall offer for lease such lands in designated tracts to the highest and best bidder.
All sales of leases .231011.2 - 17 - SFC/SB 23 upon competitive bidding or a public auction shall be governed by regulations issued by the commissioner not in conflict with the provisions of Chapter 19, Article 10 NMSA 1978.
All sales of leases upon competitive bidding or a public auction shall be governed by SFC/SB 23 Page 17 regulations issued by the commissioner not in conflict with the provisions of Chapter 19, Article 10 NMSA 1978.
The commissioner may, when it is deemed to be for the best interests of the beneficiaries of such lands, also specify a minimum bonus to be paid for the leases upon the respective tracts, and, when so specified, the bonus shall be e t 17 paid in addition to the first year's rental.
The commissioner may, when it is deemed to be for the best interests of the beneficiaries of such lands, also specify a minimum bonus to be paid for the leases upon the respective tracts, and, when so specified, the bonus shall be paid in addition to the first year's rental.
The notice shall w l n d 18 also contain such other information as the commissioner may = = 19 deem advisable or necessary.
The notice shall also contain such other information as the commissioner may deem advisable or necessary.
Sales may be conducted through a l i a e r 20 sealed bids or at public auction or by both methods combined, a t m m 21 but the method of conducting each sale shall be stated in the d r e 22 notice of sale required pursuant to this section.
Sales may be conducted through sealed bids or at public auction or by both methods combined, but the method of conducting each sale shall be stated in the notice of sale required pursuant to this section.
Sales may be c e s k 23 held at the option of the commissioner either in the office of e a n b 24 the commissioner or at the county seat of the county in which u [ the lands, or the greater part thereof, are situated or such .231011.2 - 18 - SFC/SB 23 other place within the state as the commissioner may designate in the notice of public auction provided for in this section.
Sales may be held at the option of the commissioner either in the office of the commissioner or at the county seat of the county in which the lands, or the SFC/SB 23 Page 18 greater part thereof, are situated or such other place within the state as the commissioner may designate in the notice of public auction provided for in this section.
The commissioner is authorized to give such additional notice of the sales, either by publication in newspapers or by mailing copies of the notice of sale to interested persons, firms or corporations, as [he] the commissioner may deem necessary to give proper publicity thereto.
The commissioner is authorized to give such additional notice of the sales, either by publication in newspapers or by mailing copies of the notice of sale to interested persons, firms or corporations, as the commissioner may deem necessary to give proper publicity thereto.
Leases sold at sales as provided in this section shall be awarded to the respective bidders offering the largest bonus, which shall be paid in addition to the first year's rental, or, where a minimum bonus is not specified and no offer of a bonus is received, to the bidder offering the e t 17 rental specified in the notice of sale [which] that, for the w l n d 18 first year, shall not be less than one hundred dollars ($100) = = 19 for each lease as provided in Section 19-10-15 NMSA 1978.
Leases sold at sales as provided in this section shall be awarded to the respective bidders offering the largest bonus, which shall be paid in addition to the first year's rental, or, where a minimum bonus is not specified and no offer of a bonus is received, to the bidder offering the rental specified in the notice of sale that, for the first year, shall not be less than one hundred dollars ($100) for each lease as provided in Section 19-10-15 NMSA 1978.
a l i a e r 20 Where two or more sealed bids making the same offer for the a t m m 21 same tract are received, the commissioner shall award the lease d r e 22 in accordance with such regulations as [he] the commissioner c e s k 23 may prescribe.
Where two or more sealed bids making the same offer for the same tract are received, the commissioner shall award the lease in accordance with such regulations as the commissioner may prescribe.
The successful bidders shall file proper e a n b 24 applications for the leases purchased and shall complete the u [ payment of any balance due on their bids before the closing of .231011.2 - 19 - SFC/SB 23 the office of the commissioner on the day of the sale.
The successful bidders shall file proper applications for the leases purchased and shall SFC/SB 23 Page 19 complete the payment of any balance due on their bids before the closing of the office of the commissioner on the day of the sale.
- 20 - 11 13 15 e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .231011.2
SFC/SB 23 Page 20 25
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Action History

  1. Signed

  2. passed House

  3. DO PASS committee report adopted

  4. DO PASS committee report adopted

  5. Sent to House Energy, Environment and Natural Resources Committee & House Appropriations & Finance Committee

  6. passed Senate

  7. DO NOT PASS, replaced with committee substitute

  8. DO PASS committee report adopted

  9. Sent to Senate Conservation Committee & Senate Finance Committee

Sponsors

Sponsorship breakdown

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4 sponsors · 0 co-sponsors · 108 not signed on

Sponsors (4)

Co-sponsors (0)

None.

Not signed on (108)

108 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

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energy
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Frequently asked questions

Who sponsors SB 23?
SB 23 is sponsored by Javier Martínez (Democrat), Matthew McQueen (Democrat), Elizabeth "Liz" Stefanics (Democrat), and George K. Muñoz (Democrat).
What is the current status of SB 23?
This bill has been enacted into law. Introduced January 21, 2025. Enacted.
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