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New Mexico Seeing More Interest in Permian Lease Sales

New Mexico’s June oil and natural gas lease sale collected $654,448, which pushed fiscal year 2017 earnings from monthly sales to more than $65 million, nearly doubling the previous year's proceeds of $36 million.

The latest results prompted local stakeholders to point to the gold rush-like exploration and production investment pouring into the Delaware sub-basin of the Permian Basin in southeast New Mexico.

State Land Office (SLO) Commissioner Aubrey Dunn offered 20 tracts covering 5,721 acres of state trust lands in New Mexico's most recent lease sale. Two tracts were in Lea County and 18 in Otero County. The Lea County tracts, covering 640 acres, were sold, while the Otero tracks failed to attract any bidders. The state and the U.S. Bureau of Land Management reported record proceeds from the sales.

Lea County Economic Development Corp. CEO Steve Vierck said Permian investments over the last year may be among the largest of any oil and gas region in the nation.

In Lea County, privately held Mewbourne Oil Co. Inc. of Tyler, TX, has opened a $6 million, 32,000-square-foot headquarters building and plans to invest more.

CEO Curtis Mewbourne said "the Permian has emerged as one of the premier basins in the global oil/gas industry, and we are in a strong position to capitalize on our investments."

Another private company, Lucid Energy Group, in May ramped up a 200 MMcf/d cryogenic natural gas processing expansion at its Red Hills complex in Lea County. Lucid last year absorbed a suite of assets serving the Delaware sub-basin in a deal to acquire Agave Energy Co.

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