New Mexico § 70-2-3 - Waste; definitions

§ 70-2-3. Waste; definitions

As used in this act the term “waste,” in addition to its ordinary meaning, shall include: A. “underground waste” as those words are generally understood in the oil and gas

business, and in any event to embrace the inefficient, excessive or improper, use

or dissipation of the reservoir energy, including gas energy and water drive, of any

pool, and the locating, spacing, drilling, equipping, operating or producing, of any

well or wells in a manner to reduce or tend to reduce the total quantity of crude

petroleum oil or natural gas ultimately recovered from any pool, and the use of inefficient

underground storage of natural gas; B. “surface waste” as those words are generally understood in the oil and gas business,

and in any event to embrace the unnecessary or excessive surface loss or destruction

without beneficial use, however caused, of natural gas of any type or in any form

or crude petroleum oil, or any product thereof, but including the loss or destruction,

without beneficial use, resulting from evaporation, seepage, leakage or fire, especially

such loss or destruction incident to or resulting from the manner of spacing, equipping,

operating or producing, well or wells, or incident to or resulting from the use of

inefficient storage or from the production of crude petroleum oil or natural gas in

excess of the reasonable market demand; C. the production of crude petroleum oil in this state in excess of the reasonable

market demand for such crude petroleum oil. Such excess production causes or results in waste which is prohibited by this act. The words “reasonable market demand,” as used herein with respect to crude petroleum

oil, shall be construed to mean the demand for such crude petroleum oil for reasonable

current requirements for current consumption and use within or outside the state,

together with the demand for such amounts as are reasonably necessary for building

up or maintaining reasonable storage reserves of crude petroleum oil or the products

thereof, or both such crude petroleum oil and products; D. the nonratable purchase or taking of crude petroleum oil in this state. Such nonratable taking and purchasing causes or results in waste, as defined in

the Subsections A, B, C of this section and causes waste by violating Section 12(a)

of this act; E. the production in this state of natural gas from any gas well or wells, or from

any gas pool, in excess of the reasonable market demand from such source for natural

gas of the type produced or in excess of the capacity of gas transportation facilities

for such type of natural gas. The words “reasonable market demand,” as used herein with respect to natural gas,

shall be construed to mean the demand for natural gas for reasonable current requirements,

for current consumption and for use within or outside the state, together with the

demand for such amounts as are necessary for building up or maintaining reasonable

storage reserves of natural gas or products thereof, or both such natural gas and

products; F. drilling or producing operations for oil or gas within any area containing commercial

deposits of potash where such operations would have the effect unduly to reduce the

total quantity of such commercial deposits of potash which may reasonably be recovered

in commercial quantities or where such operations would interfere unduly with the

orderly commercial development of such potash deposits.