N.M. Admin. Code § 19.2.3.17

Current through Register Vol. 35, No. 23, December 10, 2024

Section 19.2.3.17 - SURETY

A. A corporate surety lease performance and surface users improvement damage bond or other surety shall be filed with the commissioner before a lease shall be issued. Such bond shall be in the amount of not less than five hundred dollars ($500.00) for each section or fraction thereof under lease to the same lessee. Under this rule, 16 legal subdivisions, whether or not included in the same numbered lease, shall be considered a section. Standard bond forms will be furnished by the commissioner upon request.

B. Once production is had upon any land leased to a lessee, whether upon one or more leases, such lessee shall file with the commissioner either a new lease performance bond or other surety or shall increase the lessee's existing bond or surety to the sum of ten thousand dollars ($10,000.00). Provided, however, the commissioner from time to time, for good cause shown, may increase the amount of such lease performance bond to an amount which the commissioner deems necessary to protect the interests of the trust.

C. With the approval of the commissioner, a twenty-five thousand dollar ($25,000.00) bond or other surety may be used at the option of lessee for the use and benefit of the commissioner, to secure surface improvement damage and the performance of the lessee as lessee under one or more state leases or permits for minerals, oil and gas, coal or geothermal resources, or as holder under one or more state rights of way or easements which the lessee has executed with the commissioner. The lessee will be obligated to perform and keep all terms, covenants, conditions and requirements of all state leases for minerals, oil and gas, coal or geothermal resources and of all state rights of way and easements executed with the commissioner, including the payment of royalties when due and compliance with all established mining plans and reclamation requirements.

N.M. Admin. Code § 19.2.3.17

12/31/99; 19.2.3.17 NMAC - Rn, 19 NMAC 3. SLO 3.17, 09/30/02, Amended by New Mexico Register, Volume XXX, Issue 11, June 11, 2019, eff. 6/11/2019