Rig count peaks at record
With Lea County leading in oil production, New Mexico’s rig count hit its historic peak this week at 103, the most ever, and close to double the 57 at the same time last year.
Lea County’s count this week is 51 active rigs, up more than two-thirds from last year’s 30 active rigs and putting Lea at the top in New Mexico with almost half of the state’s total rigs as the price of oil hovers close to $70 per barrel.
According to a news release from the New Mexico Oil and Gas Association, data from the Baker-Hughes rig count website indicates the state’s active drilling rigs are at an all-time high.
New Mexico had previously reached the 103 mark twice, in October and December 2014, beating the previous top count of 101 reached throughout 2006. New Mexico’s rig count now ranks third in the United States, following only Texas and Oklahoma.
The news came as no surprise to Steve Vierck, president and CEO of the Economic Development Corporation of Lea County.
“It’s good news economically,” he said. “Rig counts are an important early indicator of energy activity, so it bodes well for the future. Those rigs do generate a lot of jobs. Then, the follow-on work and operations in the value chain generate a lot of jobs as well. So, it’s a good thing for the economy.”
Nearby Eddy County’s active rig count is 48, almost double the 25 rigs in that county at the same time last year.
“More rigs equals more jobs and more revenue for our state,” said Ryan Flynn, NMOGA’s executive director. “New Mexico’s flourishing oil and gas industry benefits all New Mexicans, helping us invest more in quality public schools, essential roads and highways, and critical law enforcement.”
New Mexico’s latest rig count topped the 100-rig mark for the first time since January 2015, according to the NMOGA release. Of the 103 active rigs operating in New Mexico, 101 are located in the flourishing Permian Basin in southeast New Mexico, while two rigs are active in northwest New Mexico’s San Juan Basin.
NMOGA estimates an active rig employs 50 or more workers, or at the current rig count, at least 5,000 jobs in total.
The news follows record-setting New Mexico oil production in 2017 that also saw the state climb to the third-largest producer of oil in the United States, behind Texas and North Dakota.
The data also showed Lea County producing more oil than any county in the Permian Basin, including those in Texas.
New Mexico’s state finances have rebounded on the strength of oil and natural gas production. State economists told lawmakers during the recently concluded legislative session that the state was on track to surpass current annual spending with $600 million in “new” money, mostly driven by gains in market prices for oil and increased production in the Permian Basin.
“As the foundation of our state’s economy, we are poised to help New Mexico and our children thrive,” Flynn said. “That’s why it’s so important – to our kids, teachers, and police officers – that New Mexico remains a favorable place for oil and natural gas producers to do business.”