The bill amends Section 19-10-4.3 of the New Mexico Statutes to establish a new royalty rate structure for oil and gas development leases on state trust lands, aiming to enhance revenue for beneficiaries. The new legal language specifies that the royalty rate will range from three-sixteenths to one-fifth, with alternative rates for certain restricted districts. Additionally, it requires lessees to provide detailed information about the leased land, including subdivision, section, township, range, acres, and institution. The bill also outlines conditions for lease cancellation, lessee obligations regarding royalty payments, and procedures for drilling operations, emphasizing timely payments and compliance with lease terms.

Moreover, the bill addresses the responsibilities of lessees and the public sales process for oil and gas leases. It mandates that lessees comply with all relevant laws and notify the lessor if production ceases for over twenty consecutive days, which would be deemed abandonment. The bill allows lessors to take their royalty share in-kind and purchase minerals at market price. It also stipulates that public sales of leases be held on the third Tuesday of each month, with at least ten days' notice, and outlines the process for conducting sales through sealed bids or public auctions. The effective date for these provisions is set for July 1, 2025.

Statutes affected:
introduced version: 19-10-4.3
FC substitute: 19-10-4.3, 19-10-17
Final Version: 19-10-4.3, 19-10-17