Lea and Eddy County minerals sit over the most valuable rock in North America. They are also the most misunderstood, because so much of New Mexico is state and federal land that fee minerals here are scarce and priced accordingly.
New Mexico is the highest value oil acreage in the United States and one of the least well served states for mineral owners looking for straight information. The searches return a Texas broker, a directory, and a series of template pages.
Berlin buys New Mexico minerals and royalties, concentrated in Lea and Eddy County in the northern Delaware Basin, with interest in the San Juan Basin as well. Two things about New Mexico that shape everything else: fee minerals here are relatively scarce because so much acreage is state trust or federal, and the state's tax structure touches both your ongoing royalty and your eventual sale in ways it does not elsewhere.
In June 2025, Senate Bill 23 raised the maximum royalty on new State Land Office oil and gas leases from 20 percent to 25 percent, applied to new leases in the most productive areas of southeast New Mexico, which means Eddy and Lea Counties. It took effect June 20, 2025.
This does not change your fee royalty. It matters anyway, for a reason that is worth understanding: it reset the reference price for southeast New Mexico acreage.
The first auction at the new 25 percent rate, in July 2025, drew 14 leases, more than $56 million in bonuses, and a record high bid of over $80,000 per acre, well above the prior record. A second sale in August 2025 exceeded $250 million.
Those numbers are the market speaking about what northern Delaware Basin rock is worth, in public, on the record. When someone offers you a number on a Lea County fee mineral interest, that is the backdrop. We will show you how we got from those comparables to your specific tract, and we would encourage you to ask any other buyer to do the same.
This sounds like a technicality and it is not.
A large share of New Mexico minerals are held by the State Land Office or the federal government through the BLM. Many people who receive New Mexico oil and gas checks hold an interest under a state or federal lease rather than a fee mineral interest in the ground.
The two are different assets. A fee mineral interest is perpetual real property that can be sold, leased again at the end of a term, and passed down. Interests derived from state or federal leases have different terms, different transfer requirements, and different durations.
Send us what you have and we will tell you which one you own. That research is free and we do it whether or not there is a transaction in it.
In Creson v. Amoco Production Co., 2000-NMCA-069, 129 N.M. 778, the New Mexico Court of Appeals held that "net proceeds at the well" means value after the lessee delivers gas at the surface but before the lessee adds value through processing or transportation. Compression, dehydration, and gathering are deductible. The Tenth Circuit's treatment in Elliott Industries v. Conoco, 407 F.3d 1091 (10th Cir. 2005), is related authority.
New Mexico is therefore a wellhead value state rather than a clean first marketable product state. It sits closer to Kansas and North Dakota than to Colorado or Wyoming.
Because the default runs toward the operator, your lease language carries real weight. A New Mexico gas royalty under a silent lease and one under a strong no deductions clause are meaningfully different cash flows. Our royalty statement decoder explains the deduction lines.
New Mexico's production tax burden is layered and the components are rarely listed anywhere an owner can find them. The combined burden runs roughly 8.3 percent on oil and 9.0 percent on gas.
| Component | Rate |
|---|---|
| Oil and Gas Severance Tax, NMSA 7-29-4.1 | 3.75 percent base, tiered down to 1.88 percent |
| Emergency School Tax, NMSA 7-31-4.1 | Oil 3.15 percent (to 1.58 percent at low prices); gas 4.00 percent (to 2.00 percent) |
| Conservation Tax, NMSA 7-30-4.1 | 0.19 percent, 0.24 percent for oil above a WTI threshold |
| Ad Valorem Production Tax, NMSA 7-32-1 et seq. | Local mill rate on 50 percent of taxable value |
| Production Equipment Ad Valorem Tax | Varies |
Stripper incentive rates exist, with the school tax dropping to 2.36 percent on oil and 3.00 percent on gas for qualifying production. Tier thresholds change; verify current figures with the New Mexico Taxation and Revenue Department.
New Mexico requires anyone paying oil and gas proceeds from a New Mexico well to a nonresident to withhold New Mexico tax. NMSA 1978 chapter 7, article 3A, and specifically section 7-3A-3.
This is a withholding on your ongoing royalty stream, which is different from the closing withholding Colorado and West Virginia impose on sales of real property. The Taxation and Revenue Department directs taxpayers to the Form RPD-41284 instructions for the current rate rather than publishing it on the overview page, so check there.
The practical effect: a nonresident New Mexico royalty owner should be filing a New Mexico nonresident return to reconcile the withholding, and many are not. New Mexico's top individual rate is 5.90 percent. On a sale, nonresidents are taxed on New Mexico source income, and gain on New Mexico real property is New Mexico source. See taxes when you sell mineral rights.
New Mexico is also a community property state, which matters for how minerals held during a marriage are characterized. See mineral rights in a divorce.
Last reviewed August 2026. Tax tiers and withholding rates change. Berlin Royalties is a mineral buyer and a landman shop, not a law firm or a tax advisor, and this page is general information rather than advice about your interest.
Also see our Delaware Basin page and the basin index.
Send a check stub, a lease, a deed, or a legal description. We will tell you whether you hold a fee mineral interest or a state or federal derived interest, what has been drilled and permitted on and around it, what it is worth and how we got there, and whether you should sell at all. Free, no obligation.
Out of state owners should also read out of state mineral owners.
The northern Delaware under Lea and Eddy is the most valuable oil acreage in the United States by most measures. Stacked Bone Spring and Wolfcamp benches mean one tract can be drilled a dozen times.
The shelf edge across northern Lea County, with shallower targets and a long conventional history running back to the 1920s.
Northwest New Mexico gas and coalbed methane in San Juan and Rio Arriba. Mature and declining, with deeply fractional ownership and old, complicated title including allotted lands.
Lea and Eddy are where the value is concentrated, and we review interests statewide including the San Juan Basin.
Everything a New Mexico owner needs in one place: who owns what under state law, how royalties must be paid and by when, what a buyer can and cannot deduct, the tax treatment of a sale, and the deadlines that quietly cost people their minerals. Free, and no sign-up.
Read the New Mexico guideThe things owners here most often wish they had read first. All free, none of it gated.
Free, no obligation, and no pressure. We reply within one business day, usually faster.
Prefer the phone? Call or text 918-984-1645 and you will get Stephen, the owner, not a call center. If we miss you, we text back the same day.