Higher-than-expected oil and natural gas production, as well as stronger prices, are giving New Mexico’s coffers a boost, the state’s Legislative Finance Committee (LFC) recently reported.

Permian Basin

The committee also anticipates Fiscal Year (FY) 2021 oil output of 408 million bbl, or 1.12 million b/d — a 10.8% year/year increase.

“Global consumption and demand for oil and gas has rebounded from pandemic lows, causing both prices and production in the state to surge as global oil supply catches up,” LFC economists said in their December analysis of estimated recurring state revenue.

From a budgetary perspective, New Mexico has been criticized for its dependence on volatile oil and gas prices. 

Drilling and completion activity in the Permian Basin, which extends into...