A. An operator shall compensate the surface owner for damages sustained by the surface owner, as applicable, for loss of agricultural production and income, lost land value, lost use of and lost access to the surface owner's land and lost value of improvements caused by oil and gas operations. The payments contemplated by this section only cover land affected by oil and gas operations.
B. An operator shall not be responsible for allocating compensation between the surface owner and any tenant, except that an operator shall compensate a tenant of the surface owner for any leasehold improvements damaged as a result of the operator's oil and gas operations if the improvements are approved and authorized by the surface owner. The compensation shall equal the cost of repairing or replacing the improvements.
C. An operator shall reclaim all the surface affected by the operator's oil and gas operations.
History: Laws 2007, ch. 5, § 4.
ANNOTATIONSEffective dates. — Laws 2007, ch. 5, § 11 made Laws 2007, ch. 5, § 4 effective July 1, 2007.
Only damages due to a mineral lessee's unreasonable, excessive or negligent use of a surface estate are compensable. McNeill v. Burlington Res. Oil & Gas Co., 2008-NMSC-022, 143 N.M. 740, 182 P.3d 121.
Negligent injury to a surface estate. — In determining the damages for negligent injury to a surface estate by a mineral lessee, the jury should determine the most reasonable means of making the surface owner whole, without regard to whether the injury was permanent or temporary, and in doing so, may rely on evidence of the cost of repair or diminution in value of the property. McNeill v. Burlington Res. Oil & Gas Co., 2008-NMSC-022, 143 N.M. 740, 182 P.3d 121.
A geophysical seismic survey falls within the definition of an oil and gas operation. — A geophysical seismic survey is an exploratory activity and is therefore an oil and gas operation under the Surface Owners Protection Act. Woody Inv., LLC v. Sovereign Eagle, LLC, 2015-NMCA-111, cert. denied, 2015-NMCERT-010.
Where plaintiffs brought claims under the Surface Owners Protection Act (SOPA), 70-12-1 to -10 NMSA 1978, after defendants conducted geophysical seismic surveys on land owned or leased by plaintiffs in order to evaluate potential future oil and gas operations, the district court erred in granting defendants' motion for summary judgment on the ground that defendants' geophysical survey is a non-surface disturbing activity and therefore not an oil and gas operation as defined in SOPA. A geophysical survey is an exploratory activity, whether it disturbs the surface or not, and is therefore a part of oil and gas exploration. Woody Inv., LLC v. Sovereign Eagle, LLC, 2015-NMCA-111, cert. denied, 2015-NMCERT-010.
Where plaintiffs brought a breach of contract claim after defendants conducted geophysical seismic surveys on land leased by plaintiffs in order to evaluate potential future oil and gas operations, the district court erred in granting defendants' motion for summary judgment on the ground that plaintiffs' complaint did not plead damages to the "range," but alleged that the permits and licenses issued to defendants required compensation to the surface owner or lessee for damage done to the "surface estate". Damages to the range do not exclude all damages to the surface of the land, and plaintiffs' complaint was sufficient to place defendants on notice that plaintiffs were seeking damages provided for in the permits and leases, which provided that defendants must settle with and compensate state land office surface lessees for actual damages to or loss of livestock, authorized improvements, range, crops, and other valid existing rights recognized by law. Woody Inv., LLC v. Sovereign Eagle, LLC, 2015-NMCA-111, cert. denied, 2015-NMCERT-010.