Oil and Gas Bonding Rule

Background:

The New Mexico State Land Office (NMSLO) has issued a new bonding rule for oil and gas leasing on state trust lands following a formal rulemaking process. The new rule was published on September 22, 2026 and will take effect September 28, 2026.

The intention of the new rule is to update financial assurance levels for the first time in more than 40 years to better protect the public beneficiaries who depend on NMSLO – schools, universities, and hospitals – from liabilities caused by oil and gas companies including inactive wells and contamination from oil and wastewater spills.

On October 23, 2025, the NMSLO released a pre-publication discussion draft for initial public input. The NMSLO held stakeholder meetings in Santa Fe on November 6 and 12, 2025, in Hobbs on November 14, 2025, and in Farmington on November 17, 2025. In developing the proposed rule, the NMSLO considered comments received on the pre-publication discussion draft during and after the stakeholder group meetings.

The formal proposed rule was published on this website on April 7, 2026 and was posted to the New Mexico Sunshine Portal. A notice of proposed rulemaking also was published in the New Mexico Register the same day, in accordance with applicable law.

The NMSLO completed its formal rulemaking process to gather feedback from the public on the draft rule. A public hearing was held May 27-28, 2026 at the State Land Office building in Santa Fe, New Mexico. The NMSLO also received written comments before the hearing.  In promulgating the final rule, NMSLO considered all substantive written comments and adopted some suggestions from commenters.

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