This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the standard lease form.
New Mexico Continuous Development (MCD): New Mexico Continuous Development refers to a regulation and policy framework implemented by the New Mexico State Oil Conservation Division (NM OCD), governing the exploration and production activities for oil and gas resources in New Mexico. This policy aims to ensure effective resource management, timely development, and maximum recovery of hydrocarbon reserves in the state. The continuous development concept requires operators to diligently pursue the development of oil and gas leases, with specific requirements and guidelines outlined by the NM OCD. It ensures that leaseholders maximize the value of their assets while minimizing the risk of resource wastage. Operators must demonstrate their commitment to drilling and completing wells within specified timeframes. Retained Acreage: In the oil and gas industry, retained acreage refers to the portion of leased land that remains under the control of the lessee beyond the primary term of the lease. Typically, leases have a primary term during which the lessee must commence drilling or other development activities to establish production. If the lessee fails to meet these obligations, the lease may expire, and the land not developed returns to the lessor. However, retained acreage provisions allow the lessee to retain a portion of the leased land after the primary term expires. The retained acreage may either be the full leased acreage or a reduced portion, depending on the lease terms and the extent of development conducted by the lessee. This provision incentivizes lessees to continue development activities and maximize resource recovery over an extended period. Depth Limitations: Depth limitations refer to the specifications and restrictions placed on drilling operations in a lease or permit based on the target formation or geological zone. These limitations may be defined by either depth ranges or specific stratigraphic markers, ensuring that drilling operations stay within a specified depth interval. Different types of New Mexico Continuous Development, Retained Acreage, and Depth Limitations: 1. New Mexico Continuous Development Types: a. New Mexico Drilling Obligations: This defines the specific obligations and timeframes within which operators must commence drilling or development activities on their leased lands. b. New Mexico Completion Requirements: This outlines the deadlines and requirements for completing wells once drilling operations have commenced. 2. Retained Acreage Types: a. Full Retained Acreage: In this type, lessees are permitted to retain the entire leased acreage even after the primary term expires, provided certain development targets are met. b. Partial Retained Acreage: Lessees can retain only a portion of the leased acreage if they fail to meet the required development targets within the primary lease term. 3. Depth Limitation Types: a. Shallow Depth Limitations: These restrictions prevent lessees from drilling beyond a specified shallow depth range, typically to protect freshwater aquifers or shallow formations. b. Deep Depth Limitations: These limitations restrict drilling operations from exceeding a certain depth to prevent encroachment into designated formations or to maintain operational safety.New Mexico Continuous Development (MCD): New Mexico Continuous Development refers to a regulation and policy framework implemented by the New Mexico State Oil Conservation Division (NM OCD), governing the exploration and production activities for oil and gas resources in New Mexico. This policy aims to ensure effective resource management, timely development, and maximum recovery of hydrocarbon reserves in the state. The continuous development concept requires operators to diligently pursue the development of oil and gas leases, with specific requirements and guidelines outlined by the NM OCD. It ensures that leaseholders maximize the value of their assets while minimizing the risk of resource wastage. Operators must demonstrate their commitment to drilling and completing wells within specified timeframes. Retained Acreage: In the oil and gas industry, retained acreage refers to the portion of leased land that remains under the control of the lessee beyond the primary term of the lease. Typically, leases have a primary term during which the lessee must commence drilling or other development activities to establish production. If the lessee fails to meet these obligations, the lease may expire, and the land not developed returns to the lessor. However, retained acreage provisions allow the lessee to retain a portion of the leased land after the primary term expires. The retained acreage may either be the full leased acreage or a reduced portion, depending on the lease terms and the extent of development conducted by the lessee. This provision incentivizes lessees to continue development activities and maximize resource recovery over an extended period. Depth Limitations: Depth limitations refer to the specifications and restrictions placed on drilling operations in a lease or permit based on the target formation or geological zone. These limitations may be defined by either depth ranges or specific stratigraphic markers, ensuring that drilling operations stay within a specified depth interval. Different types of New Mexico Continuous Development, Retained Acreage, and Depth Limitations: 1. New Mexico Continuous Development Types: a. New Mexico Drilling Obligations: This defines the specific obligations and timeframes within which operators must commence drilling or development activities on their leased lands. b. New Mexico Completion Requirements: This outlines the deadlines and requirements for completing wells once drilling operations have commenced. 2. Retained Acreage Types: a. Full Retained Acreage: In this type, lessees are permitted to retain the entire leased acreage even after the primary term expires, provided certain development targets are met. b. Partial Retained Acreage: Lessees can retain only a portion of the leased acreage if they fail to meet the required development targets within the primary lease term. 3. Depth Limitation Types: a. Shallow Depth Limitations: These restrictions prevent lessees from drilling beyond a specified shallow depth range, typically to protect freshwater aquifers or shallow formations. b. Deep Depth Limitations: These limitations restrict drilling operations from exceeding a certain depth to prevent encroachment into designated formations or to maintain operational safety.
