Preliminary proceeds from Bureau of Land Management (BLM) oil and natural gas lease sales conducted last year totaled $360 million, an 86% increase over 2016’s total of $192.5 million, federal officials said.
BLM auctioned online the rights to 949 parcels on federal land covering 792,823 acres, resulting in the highest sales total in nearly a decade. The highest grossing year previously was 2008, when bonus bids exceeded $408 million.
New Mexico sales led the nation, as interest in its Permian Basin acreage exploded, hitting $130.9 million in bonus bids. Wyoming was second, reaching $128.9 million.
New Mexico last year became the third largest oil producing state on the back of Permian success. Funding for the state general fund and schools hit $1.7 billion in fiscal 2017, mostly because of oil and gas production increases.
"Oil and natural gas are integral parts of our economy and, through revenues and royalties, they contribute more than any other industry to fund New Mexico's schools, public safety, and health care," said Executive Director Ryan Flynn of the New Mexico Oil and Gas Association.
BLM held a total of 28 online lease sales for federal land last year, up eight from 2016. Half of the revenue goes back to the state where the leases are located with the remaining proceeds going to the U.S. government coffers.
"If the leases result in producing oil or gas wells, revenue from royalties based on production are also shared with the state," said BLM. In New Mexico, industry officials said the general fund is comprised of 30% oil and gas revenues.
Under the BLM leasing system, a bonus bid is a one-time payment in exchange for exclusive access to explore over 10 years or longer as long as there are paying volumes of product produced.