Knute H. Lee Jr. had a pitch for the eastern Mora County residents who showed up Feb. 10 for a barbecue he hosted in the Ocate Community Center: Lease out your oil and gas mineral rights through his Albuquerque company, KHL Inc.

A total of 116 people from surrounding communities turned out to chow down on barbecued beef brisket, chicken and potato salad, and to hear Lee's proposition.

"Several people were opposed to leasing," said Ojo Feliz resident Rose Josefa, who attended the event. "Many were interested in how the royalty and rental system works. The rest were quiet but not very welcoming. I didn't get the sense that people were jumping up and down over his offer."

Eastern Mora County is the latest area in New Mexico where landmen such as Lee, who negotiate mineral leases for oil and gas companies, are looking. Like residents in the Galisteo Basin, south of Santa Fe, who are concerned over drilling plans by Tecton Energy, some Ojo Feliz and Ocate residents are gearing up to fight plans for pumping in their area. The area where KHL is looking lies east of N.M. 442 from Ocate to Ojo Feliz, and stretches east.

Unlike the Galisteo Basin, many landowners in Mora County also own their mineral rights. New Mexico is under a split-estate system, which considers mineral rights and the property rights above them to be distinct. Those rights can be sold or leased separately.

William Michael Edwards said the first thing he did when he bought his 220 acres in Ocate was to make sure he owned the mineral rights. "I wouldn't have bought if I didn't own the mineral and water rights," Edwards said. "They could offer any amount, I won't lease."

Edwards has become suddenly popular with his neighbors because of his past experience with the oil and gas industry. He said he retired four years ago after working for three decades for Shell Chemical Company in Louisiana. "I worked in the plant that made the chemicals used for drilling lubrication and hydraulic fracturing," Edwards said. "I can promise you none of them are any good (to be around)."

He said Louisiana, including the town he lived in near Baton Rouge, is rife with problems from longtime oil and gas production. "They don't call it 'cancer alley' for nothing," Edwards said.

His Mora County neighbors are calling him now, trying to figure out what they should do.

Lee wouldn't say what his clients offered Mora County residents for mineral leases. That's a matter between them and the landowners, he said. But residents who attended the barbecue said Lee offered 10-year leases at $1 an acre per year plus a royalty from minerals produced off their property.

Ojo Feliz rancher José Emilio Valdez, 78, said he was paid "much more" than $1 an acre when he signed a 10-year lease for his mineral rights with KHL Inc. in October. He wouldn't say how much but confirmed the lease included a one-eighth share of the royalties from any hydrocarbons produced off his 450 acres. Valdez, born and raised in the area, said he didn't see anything wrong with leasing the minerals. "Each individual has the right to decide what they do with their property, including their mineral rights," Valdez said.

Valdez received the lease money up front. He won't receive royalties until the company starts drilling, and if they find nothing, he receives nothing.

Valdez said he thought it was a good deal and will allow him to leave his six children, 20 grandchildren and six great-grandchildren better off. He said KHL agrees in the lease to let him know when they will enter his property, pay him extra if they damage anything and "protect the water." If anything happens to him, the lease also guarantees his children will split the remaining royalty payments. He said his attorney looked over the lease and "thought it was good."

Kathleen Dudley, an Ocate resident, agrees with Valdez that people have the right to do what they want with their property, but said, "I just want to know that if people are going to sign a lease, that they'll get rich and not be suckered into accepting pittance from an oil and gas company."

According to Josefa, people in the area started receiving letters regarding their mineral rights a few months ago. Until she received a letter, she didn't know she owned the mineral rights on her 22 acres. "Apparently I do because only people who owned their mineral rights received the letters," Josefa said. "But I'm not interested in leasing the minerals."

That may not protect her or other holdouts. An energy company that obtains mineral rights and a drilling permit, and finds a swath of hydrocarbons under several properties, can ask the state to force even lease holdouts to allow oil or gas extraction.

José Garcia, fire chief of the Ocate Volunteer Fire Department, has a different concern about potential mineral development in the area: potential danger to his firefighters. Garcia and his 20-member crew are responsible for a 300-square-mile section of grasslands, forests, ranches and scattered houses. Fast-moving grass fires are a frequently recurring fact of life there, he said. Two years ago, two back-to-back fires scorched thousands of acres.

Energy development, with its big drilling rigs, pumps, chemicals and more people are only likely to increase the fire risk, Garcia said. He said he understands any drilling might entail chemicals stored at sites during the process and wastewater stored in open pits.

"In a fire, I'm going to be downwind of this stuff trying to protect property and homes. I could be putting myself and my crews in position where they are breathing these chemicals," said Garcia, whose property is not one of those in the area Lee is looking to lease.

Another fireman, Josh Salazar, who grew up in Ocate, said his family's property isn't in the mineral lease area either, but he doesn't want to see oil and gas development there. "It's a beautiful place. To have something like that come through here, it would change just about everything," Salazar said.

Lee, who has been a landman for 35 years and is a former president of the American Association of Professional Landmen, takes the position of other oil and gas industry advocates. He said new technology and know-how allows companies to drill for hydrocarbons while protecting both the environment and communities. New drilling methods, for example, allow companies to build fewer well pads to pump out hydrocarbons than in the past.

"We can make it so that we leave an incredibly small footprint," Lee said. "We feel we can achieve a level of environmental compliance that was unattainable in the recent past, and no one would be unhappy with the result, unless they are part of the group that think we should return the plains to only grama grass and buffalo."

Lee isn't sure what the companies he works with would find in highly rural eastern Mora County. Maybe oil, maybe gas. "We'll take whichever one we find," he said. "We won't know what's there until it's drilled. We think it might be gas."

Rumaldo Pino, Mora County's planning and zoning director, was at the Feb. 10 event. He said he has received more than a dozen calls a day from residents concerned about the potential for drilling.

Pino said Mora County doesn't have an ordinance specific to oil and gas drilling but does have protections for wells and water supplies written into the county's development code. The code prohibits mining and other activities within a 1,000-foot radius of a well and prohibits activities that would contaminate water supplies.

Josefa, Edwards and others say they'll fight any plans to drill. "It may be an uphill battle, but it's worth it," Josefa said.

The community is going to meet today to discuss how people feel about the mineral leasing.

Contact Staci Matlock at 470-9843 or smatlock@sfnewmexican.com.