N.M. Admin. Code § 2.60.22.9

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

Section 2.60.22.9 - APPLICATION PROCESS

New Mexico banks and savings and loan associations desiring to sell a participation interest in a loan based an the production potential of new oil and gas wells to the severance tax permanent fund may do so by submitting a request in writing to the state investment officer providing the following:

A. a description of the loan and the purpose of the loan made by the financial institution which has been reviewed and approved in accordance with the financial institutions loan review procedures;

B. a signed loan participation agreement on a form approved by the attorney general;

C. the borrower's loan application and all loan documentation;

D. the borrower's business experience with respect to the production of oil and gas, including a resume of the experience and qualifications of the applicant in regard to oil and gas exploration, field development and production;

E. the borrower's financial condition including a certified income statement and balance sheet, a description of all current debts, liens, encumbrances or other financial obligations and other relevant financial information;

F. an engineering report prepared by a licensed professional petroleum engineer detailing cashflows and evidence including geological tests of the production potential of the new well(s);

G. a copy of the loan agreement, the original note and the mortgage securing the loan, documents evidencing all overriding royalties, percentage working interests, and net recoverable income to be utilized to make monthly payments, a legal description of any additional collateral to be provided, and a copy of the title binder or attorney's title opinion;

H. all necessary draft documents evidencing the assignment by the borrower of all payments and collateral to the SIC and agreements subordinating any lienholders interest to the SIC; fully executed and recorded originals of these documents will be provided to the SIC prior to completing the investment.

I. copies of the approved APD and AFE; Both must be received before funds are dispersed.

J. a statement of the estimated economic impact upon the New Mexico economy as a result of the proposed drilling and production activity including estimates of jobs to be created, effect on service industries, and the market demand for crude oil, oil products and for natural gas;

K. The request and the documentation as well as any additional supplementary information will be submitted to the OGPAC. The OGPAC shall review each request for the investment of the severance tax permanent fund in the loan participation within thirty days of receipt of all completed documentation and shall recommend to the state invesment officer whether the participation should be purchased. After a favorable recommendation by the OGPAC the proposal and all documents will be subject to approval as to legal form and sufficiency by the New Mexico attorney general and approval of the state investment officer before the investment will be made.

N.M. Admin. Code § 2.60.22.9

Recompiled 10/1/01