NMSA 1978, § 7-29B-3 — 7-29B-3

Approval of production restoration projects, well workover
projects and stripper well properties.

# A.

A natural gas or oil well shall be approved by the division as a production
restoration project if:
(1) the operator of the well makes application to the division in accordance
with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules
adopted pursuant to that act for approval of a production restoration project and the
application is made within twelve months of the completion of the production restoration
project; and
(2) the division records show that the well had thirty days or less of production
in any period of twenty-four consecutive months beginning on or after January 1, 1993.

# B.

A natural gas or oil well shall be approved by the division as a well workover
project if:
(1) the operator of the well makes application to the division in accordance
with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules
adopted pursuant to that act for approval of a well workover project;
(2) the division determines that the procedure performed by the operator of
the well is a procedure to increase the production from the well, but is not routine
maintenance performed by a prudent operator to maintain the well in operation. Such
procedures may include, but are not limited to:
(a) re-entry into the well to drill deeper, to sidetrack to a different location or to
recomplete for production;
(b) recompletion by reperforation of a zone from which natural gas or oil has
been produced or by perforation of a different zone;
(c) repair or replacement of faulty or damaged casing or related downhole
equipment;
(d) fracturing, acidizing or installing compression equipment; or
(e) squeezing, cementing or installing equipment necessary for removal of
excessive water, brine or condensate from the well bore in order to establish, continue
or increase production from the well; and
(3) the operator of the well submits to the division evidence of a positive
production increase over the production rate of the well prior to the workover. The
operator must submit a production curve or tabulation made up of at least twelve
months' production prior to the workover and at least three months' production following
the workover that reflects a positive production increase from the workover. The
production curve or tabulation must be certified by the operator as that of the well on
which a workover was performed.

# C.

A natural gas or crude oil producing property shall be approved and certified by
the division as a stripper well property if the division records show that the property is
assigned a single production unit number by the department and:
(1) if a crude oil producing property, produced an average daily production of
less than ten barrels of oil per eligible well per day for the preceding calendar year;
(2) if a natural gas producing property, produced an average daily production
of less than sixty thousand cubic feet of natural gas per eligible well per day during the
preceding calendar year; or
(3) if a property with wells that produce both crude oil and natural gas,
produced an average daily production of less than ten barrels of oil per eligible well per
day for the preceding calendar year, as determined by converting the volume of natural
gas produced by the well to barrels of oil by using a ratio of six thousand cubic feet to
one barrel of oil.