New Mexico § 70-2-16 - Allocation of allowable production in field or pool
Full text of New Mexico New Mexico Statutes Annotated § 70-2-16 — Allocation of allowable production in field or pool, with citation guidance and answers to common questions.
§ 70-2-16. Allocation of allowable production in field or pool
A. Whenever, to prevent waste, the total allowable production of crude petroleum oil
for any field or pool in the state is fixed by the oil conservation division in an
amount less than that which the field or pool could produce if no restriction were
imposed, the division shall prorate or distribute the allowable production among the
producers in the field or pool upon a reasonable basis and recognizing correlative
rights. B. Crude petroleum oil produced within the allowable as fixed by the oil conservation
division shall herein be referred to as “legal oil” and crude petroleum oil produced
in excess of the allowable shall be “illegal oil”. C. Whenever, to prevent waste, the total allowable natural gas production from gas
wells producing from any pool in this state is fixed by the oil conservation division
in an amount less than that which the pool could produce if no restrictions were imposed,
the division shall allocate the allowable production among the gas wells in the pool
delivering to a gas transportation facility upon a reasonable basis and recognizing
correlative rights and shall include in the proration schedule of the pool any well
which it finds is being unreasonably discriminated against through denial of access
to a gas transportation facility which is reasonably capable of handling the type
of gas produced by that well. In protecting correlative rights, the division may give equitable consideration
to acreage, pressure, open flow, porosity, permeability, deliverability and quality
of the gas and to such other pertinent factors as may from time to time exist and,
insofar as is practicable, shall prevent drainage between producing tracts in a pool
which is not equalized by counter-drainage. In allocating production pursuant to the provisions of this subsection, the division
shall fix proration periods of not less than six months. It shall, upon notice and hearing, determine reasonable market demand and make allocations
of production during each proration period. Insofar as is feasible and practicable, gas wells having an allowable in a pool
shall be regularly produced in proportion to their allowables in effect for the current
proration period. Without approval of the division or one of its duly authorized agents, no natural
gas well or pool shall be allowed to produce natural gas in excess of the allowable
assigned to such source during any proration period; provided that during an emergency
affecting a gas transportation facility, a gas well or pool having high deliverability
into the facility under prevailing conditions may produce and deliver in excess of
its allowable for the period of emergency, not exceeding ten days, without penalty. The division may order subsequent changes in allowables for wells and pools to make
fair and reasonable adjustment for overage resulting from the emergency. The provisions of this subsection shall not apply to any wells or pools used for
storage and withdrawal from storage of natural gas originally produced not in violation
of the Oil and Gas Act [this article] or the rules, regulations or orders of the division. D. In fixing the allowable of a pool under Subsection C of this section, the oil conservation
division shall consider nominations of purchasers but shall not be bound thereby and
shall fix pool allowables to prevent unreasonable discrimination between pools served
by the same gas transportation facility by a purchaser purchasing in more than one
pool. E. Natural gas produced from gas wells within the allowable as determined as provided
in Subsection C of this section shall be referred to in the Oil and Gas Act as “legal
gas” and natural gas produced in excess of the allowable shall be referred to as “illegal
gas”.
Source: official New Mexico text · Last verified 2026-08-27
Frequently Asked Questions About New Mexico § 70-2-16
What does New Mexico Statutes Annotated § 70-2-16 cover?
Section 70-2-16 ("Allocation of allowable production in field or pool") is part of the New Mexico Statutes Annotated, the codified statutory law of New Mexico. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite New Mexico § 70-2-16?
A common citation format is "New Mexico Statutes Annotated § 70-2-16" (New Mexico). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of New Mexico law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the New Mexico official source linked on this page or consult a licensed New Mexico attorney.
How does New Mexico § 70-2-16 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in New Mexico can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in New Mexico.