In a year in which New Mexico has already set milestones for oil production and lease sale revenues, it has set a record for the 3Q2018 federal land auction grossing nearly $1 billion, according to a U.S. Bureau of Land Management (BLM).
A two-day online sale by the Carlsbad office brought in more than $972 million, which exceeds the proceeds from all of lease sales in New Mexico last year. The sale also surpasses BLM's previous best sales year.
Most of the parcels were in the heart of southeastern New Mexico's Permian Basin in Eddy (56 parcels) and Lea (68) counties, and a small amount in Chaves County (18). In total, 142 parcels covering 50,797 acres were included in the two-day sale.
On Wednesday, the first day of the sale, New Mexico set a national record for the highest bid for a single parcel and the highest per-acre bid ever placed -- $81,889/acre for a 1,240-acre parcel in Eddy County, bringing in $101.5 million.
The previous records all have been set in New Mexico. The previous record for a single parcel was $76.6 million for a September 2016 auction, and the previous per-acre record was set last December at $40,001/acre.
In the first day alone, 71 parcels totaling more than 28,000 acres were sold for a total of $386 million, more revenue than BLM 2017 proceeds of $358 million. BLM's previous overall record for lease sales nationally was $408 million set in 2008.
Under current practice, 48% of the total revenue goes to the state where the transactions took place and the rest goes into the U.S. treasury. If the leases eventually produce oil and gas, revenue from royalties based on production volumes also are shared with the state.
BLM Deputy Director for Policy and Programs Brian Steed said the lease sale records are a result of "sound energy policy that seeks to use working public lands to ensure reliable energy sources."
Earlier this summer, the New Mexico State Land Office (SLO), reported that it was on pace to establish record revenues from oil and gas sales in the Permian. SLO set a record of $4.9 million in a June lease sale, while the state pulled in $106.9 million for fiscal year (FY) 2018. The previous record set in FY2012 was $102 million.
The U.S. Energy Information Administration earlier this year said New Mexico was climbing toward the nation's No. 3 spot for crude oil production behind Texas and North Dakota, lifted by the Permian.