A. Any delay in determining any person legally entitled to an interest in the proceeds
from production shall not affect payments to all other persons entitled to payments. In
instances where payments cannot be made within the time period provided in Section
70-10-3 NMSA 1978, the payor shall create a suspense account on his books for such
interest or may interplead the suspended funds into court.
B. The person entitled to payment from the suspended funds shall be entitled to
interest on the suspended funds from the date payment is due under Section 70-10-3
NMSA 1978. The interest awarded shall be the discount rate charged by the federal
reserve bank of Dallas to member banks plus one and one-half percent on the date
payment is due. Payment of principal and interest on the suspended funds shall be
made to all persons legally entitled to the funds within thirty days from the date that the
persons are determined to be entitled to the suspended funds by a final legal
determination.
History: 1978 Comp., § 70-10-4, enacted by Laws 1991, ch. 235, § 3.
ANNOTATIONS
Repeals and reenactments. — Laws 1991, ch. 235, § 3 repealed former 70-10-4
NMSA 1978, as enacted by Laws 1985, ch. 55, § 4, relating to interest on late
payments, and enacted a new section, effective June 14, 1991.
Contractual provision denying payment of interest is unenforceable. — This
section of the Oil and Gas Proceeds Payments Act supports a strong public policy that
entitles payees to receive interest on the oil and gas production proceeds that are held
in suspense for a period longer than six months, and this statutory provision cannot be
contracted away. First Baptist Church of Roswell v. Yates Petroleum Corp., 2015-
NMSC-004, rev’g 2012-NMCA-064, 281 P.3d 1235.
Where interest owners in oil and gas leases signed form division orders which allowed
petroleum company to withhold payment of oil and gas royalties pending the resolution
of title issues, and when company eventually disburses royalties, to pay the proceeds
without interest, the contractual waiver of interest in the division order violated the
strong public policy designed to equalize the bargaining power between parties in oil
and gas transactions and was not enforceable. First Baptist Church of Roswell v. Yates
Petroleum Corp., 2015-NMSC-004, rev’g 2012-NMCA-064, 281 P.3d 1235.
Contractual waiver of interest is valid. — Contractual agreements in division orders
to waive compensatory interest on delayed payments of oil and gas proceeds are valid
and enforceable. First Baptist Church of Roswell v. Yates Petroleum Corp., 2012-
NMCA-064, 281 P.3d 1235, cert. granted, 2012-NMCERT-006.
Where owners of mineral rights in an oil and gas well, which was placed in production in
2002, signed division orders which provided that when there was a question of title, the
owners would provide the payor with evidence of title acceptable to the payor and cure
any defects of title and that in the event of a failure to furnish evidence of marketable
title, the payor was authorized to withhold payments without interest until the claim was
settled; the division order listed the title requirements to entitle the owners to proceeds
from the well and specifically requested that the owners provide a copy of the trust
document that established their interests in the well; the owners failed to provide the
trust document; in 2006, the operator placed the owners on pay status despite their
failure to provide the trust document; and pursuant to the division order, the operator
refused to pay interest, the contractual waiver of interest in the division order did not
violate New Mexico public policy and was valid and enforceable. First Baptist Church of
Roswell v. Yates Petroleum Corp., 2012-NMCA-064, 281 P.3d 1235, cert. granted,
2012-NMCERT-006.
Interest owners are entitled to interest on funds that are rightfully owed to them.
— Where Appellants, several living trusts that held royalty interests on oil and gas
leases (Trusts), brought a putative class action in state court against Defendant, the
owner and operator of natural gas wells on the leases, claiming that Defendant had not
timely paid royalties or interest on the leases, as required by the New Mexico Oil and
Gas Proceeds Payments Act, the district court erred in granting Defendant’s motion for
summary judgment, because Subsection B of this section clearly reflects the
legislature’s intent to mandate that interest owners who are legally entitled to proceeds,
but who are not paid on time, shall receive interest on funds that are rightfully owed to
them. Anderson Living Trust v. Energen Resources Corp., 886 F.3d 826 (10th Cir.
2018).
Notes of Decisions
First Baptist Church of Roswell v. Yates Petroleum Corp., 2015 NMSC 4 (N.M. 2015).
· cites it 68× “The district court awarded interest payments from Yates to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandates that payees be paid interest on funds to which they are entitled.”
First Baptist Church of Roswell v. Yates Petroleum Corp., 2012 NMCA 64 (N.M. Ct. App. 2012).
· cites it 42× “Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
Anderson Living Trust v. Energen Res. Corp., 886 F.3d 826 (10th Cir. 2018).
· cites it 3× “However, they claim Energen failed to pay interest on these funds, as required by *851 N.M. Stat. Ann. § 70-10-4 ("The person entitled to payment from the suspended funds shall be entitled to interest on the suspended funds from the date payment is due under Section [§] 70-10-3 .”
Abraham v. WPX Prod. Prods., LLC, 317 F.R.D. 169 (D.N.M. 2016).
· cites it 3× “See N.M. Stat. Ann. § 70-10-4 . If the payor fails to pay in a timely fashion and that failure cannot be attributed to an excusable failure to ascertain the identity of the proper payee, then the payor owes eighteen-percent annual interest on the late payments.”
Anderson Living Trust v. WPX Energy Prod., LLC, 306 F.R.D. 312 (D.N.M. 2015).
· cites it 3× “See N.M. Stat. Ann. § 70-10-4 . If the payor fails to pay in a timely fashion and that failure cannot be attributed to an excusable failure to ascertain the identity of the proper payee, then the payor owes eighteen-percent annual interest on the late payments.”
First Baptist Church v. Yates Petroleum Corp., 2012 NMCA 064 (N.M. Ct. App. 2012).
· cites it 42× “Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
First Baptist Church v. Yates Petroleum Corp., 2015 NMSC 004 (N.M. Ct. App. 2015).
· cites it 70× “The district court awarded interest payments from Yates to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandates that payees be paid interest on funds to which they are entitled.”
Anderson Living Trust v. Energen Resources Corp., 879 F.3d 1088 (10th Cir. 2018).
· cites it 3× “However, they claim Energen failed to pay interest on these funds, as required by N.M. Stat. Ann. § 70-10-4 (“The person entitled to payment from the suspended funds shall be entitled to interest on the suspended funds from the date payment is due under Section [§ ] 70-10-3.”
First Baptist Church of Roswell v. Yates Petroleum Corp. (N.M. 2014).
· cites it 68× “The district court awarded interest payments from Defendant Yates Petroleum Company (Yates) to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandates that payees be paid interest on funds to which they are entitled.”
Snyder Ranches, Inc. v. Oxy USA Inc. (D.N.M. 2025).
· cites it 13× “Snyder alleges Oxy failed to comply with this second obligation and raises two theories of liability: (1) negligence per se, asserting that Oxy failed to pay statutory 1 The amount of statutory interest owed depends upon whether Section 70-10-4 or Section 70-10- 5 applies.”
Kulp Minerals LLC v. Apache Corp. (D.N.M. 2025).
· cites it 7× “§ 70-10-4: In its Complaint, Kulp alleges “when [Apache] ultimately made [l]ate [p]ayments to [Kulp] and the Class or held O&G proceeds in suspense accounts .”
Snyder Ranches, Inc. v. OXY USA Inc. (D.N.M. 2026).
“18: Using the interest rate provided in § 70-10-4 of the Act, state the total amount of interest calculated for payments made to Owners in New Mexico Wells utilizing the Crawford “Interest Payment Plus Pack” (IPP) as described by Oxy’s corporate representative Cory Crow during…”
N.M. Stat. § 70-10-4(A): 6 cases
First Baptist Church of Roswell v. Yates Petroleum Corp., 2015 NMSC 4 (N.M. 2015).
“The district court awarded interest payments from Yates to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandates that payees be paid interest on funds to which they are entitled.”
First Baptist Church of Roswell v. Yates Petroleum Corp., 2012 NMCA 64 (N.M. Ct. App. 2012).
“Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
First Baptist Church v. Yates Petroleum Corp., 2012 NMCA 064 (N.M. Ct. App. 2012).
“Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
First Baptist Church v. Yates Petroleum Corp., 2015 NMSC 004 (N.M. Ct. App. 2015).
“The district court awarded interest payments from Yates to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandates that payees be paid interest on funds to which they are entitled.”
Snyder Ranches, Inc. v. Oxy USA Inc. (D.N.M. 2025).
“Snyder alleges Oxy failed to comply with this second obligation and raises two theories of liability: (1) negligence per se, asserting that Oxy failed to pay statutory 1 The amount of statutory interest owed depends upon whether Section 70-10-4 or Section 70-10- 5 applies.”
N.M. Stat. § 70-10-4(B): 4 cases
First Baptist Church of Roswell v. Yates Petroleum Corp., 2012 NMCA 64 (N.M. Ct. App. 2012).
“Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
First Baptist Church v. Yates Petroleum Corp., 2012 NMCA 064 (N.M. Ct. App. 2012).
“Plaintiffs began receiving payments, but since payment had not been made within the time limits of Section 70-10-3 (1985), they also demanded interest on the proceeds under Section 70-10-4 (1991). Defendant refused to pay interest pursuant to a clause in the division orders…”
Snyder Ranches, Inc. v. Oxy USA Inc. (D.N.M. 2025).
“Snyder alleges Oxy failed to comply with this second obligation and raises two theories of liability: (1) negligence per se, asserting that Oxy failed to pay statutory 1 The amount of statutory interest owed depends upon whether Section 70-10-4 or Section 70-10- 5 applies.”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.