New Mexico’s coffers took a hit due to weak oil and gas prices during the first quarter of the state’s 2010 fiscal year as collections by the State Land Office declined $104 million from the year-ago period when $194 million was collected.
Oil and gas dominated office activity, generating $82 million during July, August and September, which was made up of $67 million in royalties and interest and $15 million in rentals and related revenue. Still, oil and gas revenue fell $97 million short of the fiscal 2009 first quarter.
“Land Office revenue is highly dependent on commodity prices for oil and natural gas, and those prices have recently started to strengthen. Therefore, despite the significant drop in earnings we remain optimistic that revenues will improve in the upcoming quarters,” said Commissioner of Public Lands Patrick Lyons.
In July oil and gas royalty earnings totaled $18.5 million, down from $51 million in the year-ago period. The monthly regular lease sale generated nearly $2.5 million, compared with $4.8 million a year ago.
August oil and gas royalty earnings totaled $22 million, down from $58 million in August 2008. The regular August lease sale generated nearly $7 million, beating the $3 million take from the year-ago period. A special sale held for unexplored areas brought in $14,600 in August.
In September oil and gas royalty earnings were $24 million, down from $57.5 million in the year-ago period. Regular lease sale earnings were $5.4 million, exceeding the $3 million earned in September 2008.
“Attendance at the monthly lease sales has improved, and rentals and bonuses are up, which indicates that there is still an interest in developing New Mexico’s natural resources, which would certainly help in pulling the state out of this budget mess,” Lyons said.
Royalties earned from oil, gas and mineral development on trust lands are paid into the Land Grant Permanent Fund for distribution to public schools and seven universities, as well as the New Mexico Military Institute, the New Mexico School for the Deaf and the School for the Blind and Visually Impaired. Land Office trust beneficiaries also include three hospitals, correctional facilities, public building repair and construction and water projects.
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