Oil & Gas Lease Sale Provides over $12 Million to New Mexico Schools and Other Government Entities
“There’s money in real estate” is an utterance that resonates through investment circles every day, and nothing is closer to this truth than when it comes to state-owned land in New Mexico. As recently as October, alease sale auction, employing the open and sealed bid format closed 8 deals that brought $12.7 million into state coffers. The largestof these was the purchase of 440 tracts for 42% of the total - a definite sign that oil exploration in NM is alive and well.The thing that stands out most about the lease acquisitions is that every last cent of the gross revenue is channeled to state-governed service entities in need of the financing. In this case, the beneficiaries were common schools ($4.3 million), the state penitentiary($8.4 million) and even the water reservoirs ($30,690).The spigot is open and looks to remain that way - at least for the medium-term future (i.e. 2 months left of 2018 and all of 2019). State officials confidently expect there’ll be more auctions as an ideal way to generate similar oil exploration cashinflows. It seems that the search for open ground with hidden energy reserves is gaining momentum – a fact that bodes well for the NM infrastructure. The October sale of nineteen tracts, covering 4,176 acres in Lea, Chaves and Eddy counties really doesn’t tell the whole tale. The 8 successful bidders paying an average of $3,047 per acre were whittled down from 22 bidders from 5 different states. The energy industry far and wide is clearly attuned to the new opportunities NM represents.Aside from the direct impact on NM services, the biggest wave of economic prosperity lies in the new jobs and spending (a well-known income multiplier) that this land lease event has triggered. Drilling and its associated activities are drawing contractors, retailers and human services to the nearby towns and cities in anticipation of business growth. Of course, new families settling in for the ride are attracted to the public schools cited for vast improvement after their fresh funding.New Mexico, along with Texas, is right at the center of the country’s energy resurgence that has elevated the US to net energy exporter status in recent months. The new revenues are well deserved and it is indeed gratifying that New Mexico’s State Land Officehas elected to apply the inflow of dollars in well-thought-out ways to benefit the growing community.
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Chase Energy Services is one of the largest privately held integrated oilfield services company in the US, providing end-to-end oilfield services through an experienced management team, innovative technologies and an unrelenting focus on safety. With more than 500 employees, the company serves customers across Southwest New Mexico and West Texas in frac and acidizing, well construction and completion, cementing solutions and well servicing. learn more
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