New Mexico Administrative Code › Title 2 - PUBLIC FINANCE › Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS › Part 22 - REGULATIONS GOVERNING THE INVESTMENT OF THE SEVERANCE TAX PERMANENT FUND IN OIL AND GAS PARTICIPATIONS › Section 2.60.22.9 - APPLICATION PROCESS

Current through Register Vol. 35, No. 13, July 16, 2024
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.