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New Mexico Cashing In on Permian Production Surge

New Mexico's cash register rang loudly for fiscal year (FY) 2017, signaling proceeds of $455 million from energy and mineral production on federal and Native American lands, an increase of $86.5 million from FY 2016, according to the U.S. Department of Interior.

It was the largest state increase in the nation, Interior said, attributing the increase to higher oil prices, which increased to around $53/bbl at the end of September from $45/bbl in September 2016.

Nationwide, Interior attributed the revenue increases, including from offshore drilling on federal leases, "primarily...to a larger number of lease sales totaling higher acreage, efforts to streamline permitting and reduce regulatory burdens, and higher oil and gas prices experienced during the year as the economy and exports have continued to expand.”

"That money goes back to communities for things like public works projects, educational improvements, conservation/parks development, and infrastructure upgrades," Interior Secretary Ryan Zinke said.

Separately, New Mexico State Lands Office (SLO) officials reported that ramped up interest in the Permian Basin, which traverses the southeastern corner of the state, generated nearly $8 million from an auction in October. Nearly $60 million was raised through state lease sales in FY 2017, according to SLO.

In June, New Mexico’sSLO held an oil and natural gas lease sale that collected $654,448, prompting stakeholders to point to the gold rush-like exploration and production investment pouring into the Permian’s Delaware sub-basin in southeastern New Mexico.

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