NMSA 1978, § 7-29-4.2 — Value may be determined by department; standard

The department may determine the value of products severed from a production unit
when:

# A.

the operator and purchaser are affiliated persons;

# B.

the sale and purchase of products is not an arm's length transaction; or when

# C.

products are severed and removed from a production unit and a value as defined
in the Oil and Gas Severance Tax Act is not established for such products.
The value determined by the department shall be commensurate with the actual
price received for products of like quality, character and use which are severed in the
same field or area. If there are no sales of products of like quality, character and use
severed in the same field or area, then the department shall establish a reasonable
value.