Oil and gas industry still booming in NM

New Mexico's oil and gas industry is holding strong.

It's difficult to predict the booms and busts of the oil and gas industry, but academic expert Jim Peach points to rig counts as a measure to judge how the industry is doing. If the number of drilling rigs falls below 100 in New Mexico, that could indicate a bust on the horizon, he said.

New Mexico's rig count stood at 102 as of Nov. 22, the same as the week prior, according to energy company Baker Hughes. That's four fewer rigs than the year before.

Nonetheless, New Mexico's current oil boom remains consistent.

Ninety-six of the rigs in New Mexico are for oil drilling and the other six are for gas. Nearly all the rigs use horizontal drilling.

Texas, the only state in the U.S. that produces more oil than New Mexico and which shares the Permian Basin with New Mexico, had more than double the rigs of New Mexico. The neighboring state had 281 rigs on Nov. 22, a majority also being oil rigs, according to Baker Hughes.

Texas has more rigs in the Permian Basin — one of the most prolific oil drilling spots in the world — than New Mexico. However, New Mexico contains the Delaware Basin, the most fruitful portion of the Permian for oil exploration.

The Permian Basin had 303 oil and gas rigs in late November, according to Baker Hughes, with all but three rigs used for oil drilling. The remaining three rigs are for gas.

On a national scale, the U.S. had 583 rigs on Nov. 22. New Mexico's oil and gas rigs alone make up nearly a fifth of the rigs nationwide.

The U.S. recorded more rigs in October than other high-producing areas in the world, including the Middle East, which had 342 land and offshore rigs, according to Baker Hughes. There were 1,754 rigs worldwide in October.

On the leasing side, the New Mexico State Land Office in November leased 14 tracts of land for mineral purposes, all in Lea and Eddy Counties — where New Mexico's portion of the Permian Basin is.

The State Land Office offers tracts for oil and gas leasing the third Tuesday of every month.

Texas-based oil and gas company Magnum Producing LP obtained the largest acreage total, leasing out 960 acres across six tracts in Lea County.

A Santa Fe title company, Federal Abstract Company, leased the next largest acreage amount at 640 acres across seven tracts in Lea County.

Dudley Land Company, headquartered in Oklahoma, put in the highest bid for any one parcel, winning the lease for an 80-acre plot in Eddy County for $2.42 million.

The state raked in $5.5 million in November lease sales.

The number of November-approved leases is minuscule compared to the number of active oil and gas leases in New Mexico. The state has 5,747 active oil and gas leases, according to data from the State Land Office.

New Mexico makes royalties, up to 20% of the revenue generated from the sale of extracted oil on its leased-out land, which goes to the state's Land Grant Permanent Fund. That fund channels the money to its beneficiaries, mostly education.

The Land Grant Permanent Fund currently contains more than $32 billion, according to the most recent numbers from the New Mexico State Investment Council. It's the largest fund New Mexico has.