Section 70-12-6 - Entry without agreement; bond. - New Mexico Statutes

70-12-6. Entry without agreement; bond.

If, after thirty days from a surface owner receiving notice pursuant to Subsection B of Section 4 of the Surface Owners Protection Act [70-12-5 NMSA 1978], no surface use and compensation agreement has been entered into, the operator may enter the surface owner's property and conduct oil and gas operations:  

A.     after depositing a surety bond, letter of credit from a banking institution, cash or a certificate of deposit with a New Mexico surety company or financial institution for the benefit of the surface owner in the amount of ten thousand dollars ($10,000) per well location.  The surety bond, letter of credit, cash or certificate of deposit shall only be released by the surety company or financial institution if: 

(1)     the surface owner provides notice that compensation for damages has been paid; 

(2)     the surface owner and the operator have executed a surface use and compensation agreement or otherwise agreed that the security should be released; 

(3)     there has been a final resolution of the judicial appeal in any action for damages and any awarded damages have been paid; or 

(4)     all wells have been plugged and abandoned and the operator has not conducted oil and gas operations on the surface owner's property for a period of six years; or  

B.     after posting a blanket surety bond, letter of credit from a banking institution, cash or a certificate of deposit with a New Mexico surety company or financial institution in the sum of twenty-five thousand dollars ($25,000) subject to the following criteria: 

(1)     the surety company or financial institution shall hold the corporate surety bond, letter of credit, cash or certificate of deposit for the benefit of the surface owners of this state and shall ensure that such security is in a form readily payable to a surface owner awarded damages in an action brought pursuant to the Surface Owners Protection Act; 

(2)     the bond, letter of credit, cash or certificate of deposit shall remain in full force and effect as long as the operator continues oil and gas operations in New Mexico; 

(3)     the bond, letter of credit, cash or certificate of deposit shall not be released until six years after the operator has deposited with the surety company or financial institution a certified statement from the oil conservation division of the energy, minerals and natural resources department that, according to the records of the division, the operator is not the operator of record of any well in New Mexico and does not hold any outstanding drilling permits in New Mexico; and 

(4)     in the event that, pursuant to a judgment, all or a portion of the bond, letter of credit, cash or certificate of deposit has been used to pay a surface owner, the operator shall immediately post additional security so that the total amount posted equals twenty-five thousand dollars ($25,000) and, if the operator does not post the additional security, the surety or financial institution shall publish notice to that effect in a paper of general circulation in each county of the state in which oil or gas is produced.