Jim Winchester Executive Director | Independent Petrolium Association of New Mexico
The New Mexico State Land Office has released a draft rule proposing significant increases to state lease bonds, a move that comes after the passage of the Royalty Rate Increase Bill. The Independent Petroleum Association of New Mexico (IPANM) expressed concern that these proposed changes will have a substantial impact on independent oil and gas producers.
According to IPANM, the State Land Commissioner had previously indicated that bond increases would be considered if the Royalty Rate Increase Bill was not passed. Despite the bill's approval, the commissioner is moving forward with plans for higher bonding requirements.
IPANM noted that "the State Land Office did not consult with industry regarding their proposal, and therefore, have not allowed industry to provide input on the impacts of this new rule on our operations up to this point."
The State Land Office communicated to IPANM that opportunities for industry feedback are planned. In their message, they stated: “While we are still finishing up our timeline for the rulemaking, please expect industry working group meetings to be held in Hobbs, Farmington and Santa Fe in mid-November. We will have more information to share in the next couple of weeks regarding meeting locations and our overall timeline.”
IPANM remains cautious about whether future feedback sessions will result in meaningful changes but intends to participate in discussions with hopes of influencing the final rule.
