March 28, 2019

March 28, 2019

New Mexico’s Lease Sales Increase in Revenue for Public Benefit

New Mexico’s Lease Sales Increase in Revenue for Public Benefit

In 2019, the March lease of State Trust land in southeast New Mexico and the Permian Basin tripled in revenue versus 2018.  This year’s sale generated $4.9 million for the New Mexico community. These revenues will directly fund the state’s schools, hospitals, universities, and other government-funded agencies. Where did the $4.9 million come from specifically? This year’s money was derived from 24 tracts with 22 leases coming from closed bids. Over 4,285 acres in Chaves, Lea, and Eddy counties were included in the closed bids. Average bidding price equaled around $1,400 per acre. The counties of Eddy and Lea are considered to have more prosperous land. These two counties are located in the southeast corner of New Mexico within the Delaware portion of the Permian Basin. Other Positive Trends in Oil & Gas Industry Oil and gas development continues to increase within the Permian Basin. There’s plenty of supply to attract future investors. Not only does New Mexico have a bountiful oil and gas supply, but the whole industry is also seeing an uptick in price per barrel for domestic oil. The price per barrel of West Texas Intermediate (WTI) was about $60 per barrel week of March 18th according to the NASDAQ. For the rest of 2019, New Mexico has a bright oil and gas forecast based on industry predictions and demand. Grow Revenue for 2020 and Future Years The Land of Enchantment has a wealth of natural resources that have yet to be leased out. State Land Commissioner, Stephanie Garcia Richard, who took office in January 2019 wants to take advantage of the significant opportunities for New Mexico. The following efforts will increase future revenues:
  1. Continue partnerships with regulators and industry leaders that have or seek state trust land
  2. Create new and extend existing monthly leases to fund local schools, hospitals, and colleges
  3. Make more land available for lease
 The Permian Basin’s production is continuing to boom, investors are attracted to the wealth of natural resources, and lastly, the current state’s government sees the public benefit that oil and gas provide to schools, hospitals, and many other positive facets of the community.

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