the New Mexico State Land Office

Commissioner Stephanie Garcia Richard

State Land Office Overview Responsible for administering 9 million acres of surface and 13 million acres of subsurface estate for the beneficiaries of the state land trust, which includes schools, universities, hospitals and other important public institutions. SLO seeks to optimize revenues while protecting the health of the land for future generations. By leasing state trust land for a wide array of uses, the State Land Office generates hundreds of millions of dollars each year to support these beneficiaries.

Land Office 101 Revenue Flow Beneficiaries Record FY 2019 Revenue / Revenue over time

Revenue Flow Renewable revenue - rentals, fees and interest About 90% of total revenue 1% Renewable revenue - rentals, fees and interest Non-renewable revenue –royalties

Beneficiaries – Percent of Distribution 1. Common Schools 2. UNM 3. Saline Lands 4. NMSU 5. WNMU 6. NMHU 7. Northern NM School 8. ENMU 9. NM Inst. Of Min. & Tech. 10. NMMI 11. NM Boys School 12. Miners Hospital 13. State Hospital 14. State Penitentiary 15. School for the Deaf 16. Sch. for Visually Hd. 17. C P & R 18. Water Reservoirs 19. Rio Grande Improve. 20. Public Buildings 21. Carrie Tingley Hospital 22. State Park Commission

Carrie Tingley Hospital Beneficiaries Carrie Tingley Hospital Public (Common) Schools New Mexico Boys' School New Mexico School for the Blind and Visually Impaired Las Vegas Behavioral Health Institute Capital Buildings Charitable Penal and Reform Penitentiary of New Mexico Rio Grande Improvements Saline Lands, University of New Mexico

Record fy 19 revenue – comparison over time

State Land Office Fiscal Year 2019 Estimated Revenue $1.1 Billion

State Trust Oil & Gas Production 2009 – 2018

Land Office priorities Protecting our precious (and limited) water Protecting our wildlife Protecting our land for future generations Assuring that those who lease our land are operating as responsibly as possible Doing all of this while raising as much money as possible for the vital public institutions that we support

Royalty Management Division Overview The Royalty Management Division performs four separate business functions: Revenue Processing Compliance and Special Projects Audit Reporting Identification #’s (PUN)

Royalty Management Division Overview Management Team Jordan Kessler, Assistant Commissioner (505) 827-5746 jkessler@slo.state.nm.us Danny Martinez, Division Director (505) 827-1218 dmartinez@slo.state.nm.us Kim Gabaldon, Division Deputy Director (505) 827-6634 kgabaldo@slo.state.nm.us Paul Rivera, Revenue Processing Manager (505) 827-5738 privera@slo.state.nm.us Angela Romero, Audit and Special Projects Manager (505) 827-5863 aromero@slo.state.nm.us Vacant Audit and Compliance Manager (505) 827- @slo.state.nm.us

Proposed Changes - Production Unit Number (PUN) (Business rules current system) Seven digit system generated number based on each well completions: 1) OGRID 2) Prop name & ID 3) Pool Id 4) Unit Agreement Number 5) Comm Agreement Number Information sources 1) Oil Conservation Division well permitting; C101, C102, C104 2) New Mexico State Land Office Unitization and Communitization Agreements (Business rules new system) Regular Leases 1) 10 digit API # plus Pool ID Communtization Agreements Communitization Agreement # Unitization Agreements Unitization Agreement # Unit/Comms Unit/Comm Agreement # Information sources 1) Oil Conservation Division well permitting; C101, C102 2) New Mexico State Land Office Unitization and Communitization Agreements

Production Unit Number’s Associated Leases (Business rules current system) Regular Lease PUNs Well completion dedicated acreage Communitization PUNs (Project areas – horizontal wells) Unitization PUNs (Federal Exploratory, State Exploratory, Waterflood PUNs Unit boundaries (Business rules new system) 10 digit API # + Pool ID Well completion dedicated acreage Communitization Agreements (Project areas – horizontal wells) Federal Exploratory Type 2 Unit Agr Participating Area Acreages Waterfloods/State Expl Type 1 Unit Agr Unit boundaries Federal Exploratory Type 1 Unit Agr Project areas