2021 New Mexico Statutes
Article 10 - Lease of Oil and Gas Lands
Section 19-10-20 - [Cancellation of lease for nonpayment or nonperformance of requirements by lessee; notice.]

The commissioner is hereby authorized to cancel any lease issued as provided herein for nonpayment of rentals or nonperformance by the lessee of any provision or requirement of the lease; provided, however, that before any such cancellation shall be made the commissioner must mail to the lessee or assignee by registered letter, addressed to the post-office address of such lessee or assignee shown by the records of the office of the commissioner, a notice of intention to cancel said lease, specifying the default for which the lease is subject to cancellation, and if within thirty (30) days after the mailing of said notice to the lessee or assignee he shall remedy the default specified in such notice, then no cancellation of the said lease shall be entered by the commissioner but otherwise the said cancellation shall be made and all rights of the lessee or assignee under the lease shall thereupon terminate. The mailing of the notice as provided in this section shall constitute notice of the intention of the commissioner to cancel the lease and no proof of receipt of such notice shall be necessary or required. All notices required to be given hereunder on account of failure to pay rentals shall be mailed within ninety (90) days after said rentals shall have become delinquent, and as to all leases under the terms of which rentals are delinquent as of the effective date of this amendment said notices shall be mailed within ninety (90) days from the effective date hereof.
History: Laws 1929, ch. 125, § 11; C.S. 1929, § 132-411; 1941 Comp., § 8-1113; Laws 1945, ch. 113, § 1; 1953 Comp., § 7-11-14.
Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.
Cross references. — For forfeiture of lease for failure to pay rent, see 19-7-34 NMSA 1978.
For grounds of forfeiture of agricultural or grazing lease, see 19-7-35 NMSA 1978.
For forfeiture procedure on violation of lease or other written instrument, see 19-7-50 NMSA 1978.
For forfeiture for defrauding state of royalties, see 19-8-1 NMSA 1978.
For forfeiture on failure to develop and operate mineral lands in workmanlike manner, see 19-8-13 NMSA 1978.
For forfeiture of certain mineral leases for violation thereof, see 19-8-27 NMSA 1978.
For forfeiture on failure to comply with coal lease, see 19-9-13 NMSA 1978.
For forfeiture of lease under Geothermal Resources Act, see 19-10-20 NMSA 1978.
Time of payments. — Where ninetieth day fell on Sunday, lessee had all day the following Monday in which to make payment, and payments received by mail on the preceding Saturday or Sunday, when the land office was closed, were timely. Durell v. Miles, 1949-NMSC-033, 53 N.M. 264, 206 P.2d 547.
Actual notice is not required in order to terminate lessee's interest in an oil and gas lease. Abbott v. Armijo, 1983-NMSC-065, 100 N.M. 190, 668 P.2d 306.
Notice of intent to cancel lease by certified mail. — The commissioner of public lands fulfills the statutory requirement for notice to terminate a lessee's interest in an oil and gas lease when he sends a notice of intent to cancel by certified mail. Abbott v. Armijo, 1983-NMSC-065, 100 N.M. 190, 668 P.2d 306.
Recall of notice permitted. — Where the 90-day statutory limit for giving notice of cancellation has not expired, commissioner of public lands may recall notice of cancellation for nonpayment of rentals. Durell v. Miles, 1949-NMSC-033, 53 N.M. 264, 206 P.2d 547.
Effect of production in portion on partial assignee's rights. — Where oil and gas lease from commissioner of public lands provided that if oil and gas were produced in paying quantities within 10-year period, which time had been allowed lessee to produce oil and gas, lease might be continued in force as long as oil or gas should be produced, and portion of lease was assigned, assignee succeeded to all rights of original lessee, and on producing oil in portion of lease not covered by assignment, assignee had right to continue lease in force, subject to implied covenant to perform the development work. State ex rel. Shell Petroleum Corp. v. Worden, 1940-NMSC-038, 44 N.M. 400, 103 P.2d 124.
Consent by state to suit. — In an action brought under 8-1116, 1941 Comp. (Section 19-10-23 NMSA 1978) against the commissioner of public lands to compel him to rescind his cancellation, effected under this section, of certain oil and gas leases, it was held that the state not only has waived its immunity but has consented to be sued in a court of equity in which equitable principles must control. Durell v. Miles, 1949-NMSC-033, 53 N.M. 264, 206 P.2d 547.
Time of notice. — The commissioner of public lands is required to mail notices respecting rentals within 90 days after they become delinquent, but in the case of nonperformance other than rentals, the time for giving notice is within his discretion. 1945 Op. Att'y Gen. No. 45-4767.
Grounds of cancellation. — The commissioner of public lands may cancel a lease when the lessee fails, after due notice, to do what is expected of an operator of ordinary prudence. 1941 Op. Att'y Gen. No. 41-3835.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 38 Am. Jur. 2d Gas and Oil § 283.
Mistake, accident, inadvertence, etc., as ground for relief from termination or forfeiture of oil or gas lease for failure to complete well, commence drilling or pay rental strictly on time, 5 A.L.R.2d 993.
Relief against forfeiture of lease for nonpayment of rent, 31 A.L.R.2d 321.
Gas and oil lease force majeure provisions: construction and effect, 46 A.L.R.4th 976.

Structure 2021 New Mexico Statutes