New Mexico Breaks Oil Production Record

New Mexico broke an oil production record in May, pumping an average 1.22 million barrels daily as the Permian Basin returned to output growth again.

Bloomberg reports, citing government data, that New Mexico produced more oil than North Dakota, and it did so for three months in a row to May.

New Mexico also recently reported record oil and revenues for the fiscal year 2021. According to the New Mexico State Land Office, it had received some $1.26 billion in total revenues in the latest fiscal year, of which $1.25 billion or 96 percent came from oil and gas royalties.

Since the start of this year, revenues have strengthened further, averaging some $100 million per month and rising to a record $135 million for June, according to preliminary data.

State Land Commissioner Stephanie Garcia Richard said, as quoted by the Carlsbad Current-Argus, that oil and gas production in New Mexico rebounded quickly thanks to relief granted by the state. The relief consisted of drillers keeping their leases despite well closure during the worst of the demand crisis last year.

“At the onset of the pandemic, we worked to put safeguards in place in order to assure that active oil and gas leases would be as successful as possible for the institutions we support,” the commissioner said. “Those efforts paid off in the long run.”

Speaking of oil leases, New Mexico senators are among those getting increasingly frustrated by the Interior Department’s delay in restarting the issuance of federal oil and gas leases. President Biden imposed a moratorium on oil and gas leases for federal lands in January, but recently, a Louisiana judge overturned the moratorium. The Interior Department, however, has been slow to remove the obstacles to new lease issuance.

New Mexico is among the states with a substantial portion of oil royalties coming from federal land leases.