New Mexico § 70-2-18 - Spacing or proration unit with divided mineral ownership

§ 70-2-18. Spacing or proration unit with divided mineral ownership

A. Whenever the operator of any oil or gas well shall dedicate lands comprising a

standard spacing or proration unit to an oil or gas well, it shall be the obligation

of the operator, if two or more separately owned tracts of land are embraced within

the spacing or proration unit, or where there are owners of royalty interests or undivided

interests in oil or gas minerals which are separately owned or any combination thereof,

embraced within such spacing or proration unit, to obtain voluntary agreements pooling

said lands or interests or an order of the division pooling said lands, which agreement

or order shall be effective from the first production. Any division order that increases the size of a standard spacing or proration unit

for a pool, or extends the boundaries of such a pool, shall require dedication of

acreage to existing wells in the pool in accordance with the acreage dedication requirements

for said pool, and all interests in the spacing or proration units that are dedicated

to the affected wells shall share in production from the effective date of the said

order. B. Any operator failing to obtain voluntary pooling agreements, or failing to apply

for an order of the division pooling the lands dedicated to the spacing or proration

unit as required by this section, shall nevertheless be liable to account to and pay

each owner of minerals or leasehold interest, including owners of overriding royalty

interests and other payments out of production, either the amount to which each interest

would be entitled if pooling had occurred or the amount to which each interest is

entitled in the absence of pooling, whichever is greater. C. Nonstandard spacing or proration units may be established by the division and all

mineral and leasehold interests in any such nonstandard unit shall share in production

from that unit from the date of the order establishing the said nonstandard unit.