New Mexico State Lands Understands True Stewardship
New Mexico is certainly no stranger to oil and gas production and the complexities that come with regulating and collecting the State’s proceeds from its activity. The first successful gas well was drilled in 1921, and New Mexico has been a prolific oil and gas producer ever since. The New Mexico State Land Office has a long history, dating back to 1899. Per their website, “the New Mexico State Land Office, under the direction of Commissioner of Public Lands Stephanie Garcia Richard, manages nine million surface and 13 million mineral acres across every county. This land, referred to as state trust land, was allocated to New Mexico by the Federal Government under the Ferguson Act of 1898 and the Enabling Act of 1910. The mission of the agency is to use state trust land to raise revenue for New Mexico public schools, hospitals, colleges, and other public institutions. The entities are the beneficiaries of revenue raised when the Land Office does business on state trust land. Revenue is raised by leasing land for oil, gas, and mineral exploration, business and commercial operations such as renewable energy projects, agriculture and livestock grazing, outdoor recreation opportunities, and much more.” I have personally been responsible for reporting to the New Mexico State Land Office in some capacity for over twenty years. I’ve never had a bad experience with the agency during all those years, but what I’ve observed this year deserves broad recognition and praise. The ramping up of production in the Permian Basin over the past decade has presented both opportunity and challenge to those that work for the federal, tribal, state and local governmental agencies. Collections are certainly up given the significant increase in oil and gas production, but a myriad of challenges have also increased. Of all the governmental agencies impacted by these challenges, only New Mexico State Lands has been observed to have correctly identified the root issues and taken proactive and highly visible steps to address. The SLO management team observed a significant effort being required by their team just to work through their monthly collection activity. To get a handle on
the underlying root cause they gathered information on reporting errors as a key indicator of disfunction.
Report
Number
Year of Error s 2018.............................. 21,821 2019.............................. 23,991 2020.............................. 25,870 2021.............................. 33,177 2022.............................. 53,431 2023.............................. 54,144
The error count clearly demonstrated that the accuracy of their reporters had significantly declined resulting in costly errors having more than doubled in a six-year period. These errors create delays in distribution of proceeds, increased interest and penalty assessments, and decreased efficiency for the agency and industry alike. Enlightened by these statistics, the leadership of the SLO Oil and Gas division got immediately to work implementing tangible and sensible changes to combat the issues. In July 2024, the agency hosted a two-day seminar in their Santa Fe offices at no cost to their industry counterparts. Not only did they provide general training on their reporting requirements, but they also invited their sister agencies from the New Mexico Office of Oil Conservation Division and the federal Bureau of Land Management to present on issues regulated by their offices on such matters as permitting and volume reporting. In a stroke of pure genius, the SLO also provided attendees with an opportunity to meet with them in a one-on-one meeting to facilitate discussions potentially unique to individual reporters. This year representatives from the agency have been found attending industry events such as the Counsel of Petroleum Accountants Societies (COPAS) Oil and Gas State Reporting Conference in Oklahoma City and the national meeting of the Counsel of Petroleum Accountants Societies (COPAS) fall meeting in San Antonio. In August they published an updated online training manual.
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G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2025
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