NM Stat § 70-2-2 (2021)
2021 New Mexico Statutes|Chapter 70 - Oil and Gas|Article 2 - Oil Conservation Commission; Division;|Section 70-2-2 - [Waste prohibited.]

The production or handling of crude petroleum oil or natural gas of any type or in any form, or the handling of products thereof, in such manner or under such conditions or in such amounts as to constitute or result in waste is each hereby prohibited. History: Laws 1935, ch. 72, § 1; 1941 Comp., § 69-202; Laws 1949, ch. 168, § 1; 1953 Comp., § 65-3-2. ANNOTATIONSCross references. — For regulation and conservation of carbon dioxide gas, see 70-2-34 NMSA 1978. Legislative intent. — Primary concern of oil and gas legislation is eliminating and preventing waste in the pool so far as it can practicably be done, and also the protection of correlative rights of producers from the pool. El Paso Natural Gas Co. v. Oil Conservation Comm'n, 1966-NMSC-092, 76 N.M. 268, 414 P.2d 496. Two fundamental powers and duties of commission are prevention of waste and protection of correlative rights. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Elements of property rights of natural gas owners. — The legislature has stated definitively the elements contained in property rights of natural gas owners. Such right is not absolute or unconditional. It consists of merely (1) an opportunity to produce, (2) only insofar as it is practicable to do so, (3) without waste, (4) a proportion, (5) insofar as it can be practically determined and obtained without waste, (6) of gas in the pool. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Protection of correlative rights. — Although subservient to prevention of waste and perhaps to practicalities of the situation, the protection of correlative rights must depend upon the commission's findings as to the extent and limitations of the right. This the commission is required to do under legislative mandate. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Keeping of false records actionable offense. — The Connally Hot Oil Act (15 U.S.C. § 715 et seq.) applies only to those states which have in effect proration statutes for the purpose of preventing waste of oil and gas resources, encouraging conservation of oil and gas deposits, etc., and New Mexico is among those states which has enacted a valid comprehensive oil conservation law; since Connally Act applies to this state, keeping of false records, though not in violation of any New Mexico proration order, constitutes an actionable offense under Connally Act. Humble Oil & Ref. Co. v. U.S., 198 F.2d 753 (10th Cir.), cert. denied, 344 U.S. 909, 73 S. Ct. 328, 97 L. Ed. 701 (1952). Forfeiture of lease denied. — Lessors of oil and gas lease could not declare balance of 40-acre tract (i.e., all except 10-acre tract a producing well was on) retained after selling interests without reservation in another undrilled 40-acre area included in the original lease, as forfeited because of lease provision that lessee was to drill or start to drill a second well or forfeit the lease, in view of order promulgated pursuant to this act which prevented drilling of second well on the retained 40-acre tract. Thompson v. Greer, 1951-NMSC-050, 55 N.M. 335, 233 P.2d 204. Law reviews. — For article, "Compulsory Pooling of Oil and Gas Interests in New Mexico," see 3 Nat. Res. J. 316 (1963). For article, " 'New Mexican Nationalism' and the Evolution of Energy Policy in New Mexico," see 17 Nat. Res. J. 283 (1977). Am. Jur. 2d, A.L.R. and C.J.S. references. — 38 Am. Jur. 2d Gas and Oil §§ 157, 158. Constitutionality of statute limiting or controlling exploitation or waste of oil and gas, 24 A.L.R. 307, 78 A.L.R. 834. Constitutionality of statute or ordinance limiting production and preventing waste, 67 A.L.R. 1347, 99 A.L.R. 1119. Constitutionality of statute regulating petroleum production, 86 A.L.R. 418. Construction, application, and effect of statutes regulating production of oil or gas in a manner or under conditions constituting waste, 86 A.L.R. 431. Rights and remedies of owner or lessee of oil or gas land on mineral or royalty interest therein, in respect of waste of oil or gas through operations on other lands, 4 A.L.R.2d 198. 58 C.J.S. Mines and Minerals § 234.