New Mexico § 19-10-13 - Assignment of leases; procedure; effect

§ 19-10-13. Assignment of leases; procedure; effect

All leases issued under the provisions of this act shall be assignable in whole or

in part; provided, however, that no assignment of an undivided interest in the lease

or any part thereof, or any assignment of less than a legal subdivision shall be recognized

or approved by the commissioner. The term “legal subdivision” as used in this act shall be construed in its ordinary

sense as used and recognized in the general land office of the United States and in

the state land office of New Mexico. The assignments provided for herein shall be executed and acknowledged in the manner

prescribed for conveyance of real estate in this state and shall be filed in triplicate

in the office of the commissioner who shall retain two copies of the said assignment

in his office as a public record and shall record one of same in permanent form in

his office as a public record and shall return one of the duplicate copies to the

person entitled thereto. The approval of the commissioner shall be noted upon all copies of the said assignment. The commissioner shall prescribe the form to be used for such assignments and shall

fix a reasonable fee for the filing, recording and approval of same. The commissioner shall have the right to refuse approval of any assignment not executed

in proper form or by the proper person or persons, or when the lease is not in good

standing as to the assigned tracts, or when litigation is pending affecting the lease

or the interest of any person therein. Upon approval by the commissioner of an assignment the assignor shall stand relieved

from all obligations to the state with respect to the lands embraced in the assignment

and the state shall likewise be relieved from all obligations to the assignor as to

such tract or tracts, and thereupon 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 state as to such

tracts. Provided, however, the record owner of any oil and gas lease may enter into any

contract for the development of the leasehold premises or any portion thereof, or

may create overriding royalties or obligations payable out of production, or enter

into any other agreements with respect to the development of the leasehold premises

or disposition of the production therefrom, and it shall not be necessary for any

such contracts, agreements or other instruments to be approved by the commissioner

of public lands; but nothing herein contained shall relieve the record title owner

of such lease from complying with any of the terms or provisions thereof, and the

commissioner shall look solely and only to such record owner for compliance therewith,

and in any controversy respecting any such contracts, agreements or other instruments

entered into by such lessee with other persons the state of New Mexico or the commissioner

of public lands shall not be a necessary party. All such contracts and other instruments may be filed either in the office of the

commissioner of public lands or recorded in the office of the county clerk of the

county where the lands are situated, and the filing or recording thereof shall constitute

notice to all the world of the existence and contents of the instruments so filed

or recorded. The commissioner may prescribe a reasonable fee for the filing of such instruments

in the office of the commissioner of public lands. The discovery of oil or gas upon lands embraced in any state lease shall continue

such lease as to all of the lands embraced therein for as long thereafter as oil and

gas in paying quantities or either of them is being produced in accordance with the

provisions thereof regardless of any assignment of all or any portion of the lease

which may have been made prior or subsequent to the discovery of such production.