Depending on the outcome of an ongoing state Supreme Court case, oil and gas companies may have to cough up money for back royalties they allegedly withheld for natural gas they extracted from New Mexico land.

The State Land Office filed a civil complaint in late March, alleging Exxon Mobil Corp., Yates Petroleum Corp., Chevron Corp. and nine other companies shorted the state on royalty payments and therefore “deprived the State of critical funds used to pay for public education.” New Mexico public schools are the largest beneficiary each year of money from the Land Grant Permanent Fund. 

“Even as we have made more cuts to education, we’ve handed oil and gas more and more tax breaks…we need to always remember that our most precious natural resource is our children,” New Mexico Voices for Children Policy Director Bill Jordan says.

State Land Commissioner Ray Powell says although the complaint has been filed, he is waiting to actually serve companies until the Supreme Court returns an opinion on a case filed by his predecessor, Patrick Lyons. Lyons appealed a 5th Judicial District Court decision that prevented the state from suing ConocoPhillips for back royalties on natural gas extracted in Lea County. 

“I’m absolutely determined to get every cent owed our school kids, but I want to make sure we have a strong case so we’re not expending our resources on legal fees that otherwise could be going to our school kids,” Powell says.