Imagine that shortly after completing an acquisition of producing locations and infrastructure where the State of New Mexico State Land Office (NMSLO) owns the mineral interest, and they restrict access to your newly acquired sites for one of the following reasons:
· A notice of non-compliance was issued to the leaseholder of record, who failed to communicate the issue to you. As a result, the lease was terminated, and you must shut in your wells so as not to produce in trespass.
· You submitted plans to plug and abandon an inactive well on NM State Lands but learned the associated lease was cancelled and you must now obtain a right of entry before work can begin.
· You acquired a lease severed by depth, and the NMSLO only recognizes the leaseholder of record, who went bankrupt decades ago, resulting in no way to complete a transfer of rights.
These scenarios prove how easy it is to overlook risks associated with the acquisitions of wells and leases located on New Mexico State Lands. These oversights can lead to non-compliant operator status with NMOCD, operational delays, civil penalties, loss of production rights or the collapse of your relationship with regulators. ALL Consulting maintains a strong working relationship with the NMSLO and has successfully identified and resolved these types of leasing and access issues for several operators under NMSLO jurisdiction.
See the article on our LinkedIn page