Lea County is leading New Mexico’s oil patch in historic proportions.
Wednesday the New Mexico State Land Office announced its July oil and gas lease sales surpassed $30 million, a record high. Lea County led that sale with two 320-acres leases selling for $7.36 million and $6 million respectively.
“The July lease sale revenues far exceeded our expectations and our beneficiaries are thrilled,” said State Land Commissioner Aubrey Dunn in a news release. “It was a pleasure to call Major General Jerry Grizzle at the New Mexico Military Institute and let him know he has an extra $4.5 million coming his way. Plus, since we’ve already met our budget we will be able to distribute huge amounts of money to public schools, universities and other Trust beneficiaries we help support.”
In all, the State Land Office collected $30,035,248. Fifty-eight bidders from 11 states registered for Tuesday’s sale. Eighteen bidders vyed on 82 tracts covering 20,814 acres of State Trust Lands in Chaves, Eddy, Lea and Roosevelt counties. The monthly oil and gas lease sales are held online in sealed and open bidding formats. This month, sealed bids generated $19,392,398 and online bids brought in $10,642,850.
Ameredev II LLC, of Austin, was the highest sealed bidder, paying $7,360,000, or $23,000 per acre, for 320 acres in Lea County. OneEnergy Partners, of Houston, was highest online bidder, paying $6,001,100, or $18,753 per acre, also for 320 acres in Lea County.
The July earnings are also nearly double the agency’s total fiscal year 2018 operating budget of $15.9 million.
Lea County continues to be the bright spot in New Mexico’s oil patch and that is not only apparent in the lease sales, but also at the Lea County Clerk’s Office.
Lea County Clerk Keith Manes said it’s “crazy” at his office.
“One day I counted 53 land man working in there,” he said. “We have nine computer terminals for them to use. The abstract office is also full. We have three copiers and they are going all the time. Last year we generated $129,000 in copier fees and this year, January to May, we’ve generated $158,000.”
Manes said the office has set up tables in the courthouse basement to help accommodate the number of researchers checking lease records. Thursday he said at least 30 researchers were in his office.
“I think there have been mergers too and they have to research everything to make sure they have the title to whatever they have purchased,” he said about the reason for the activity. “They are very secretive about what they are doing.”
Robert McEntyre, director of communications for the New Mexico Oil and Gas Association, said land in the Permian Basin is the most sought-after oil asset in the country right now.
“As you know, the Permian is widely regarded to be one of the top oil and gas assets in the entire country and for many companies they consider the Permian some of the best land in the entire world,” he said. “Interest in the Permian continues to be very strong and people are looking at a combination of things. They like New Mexico’s regulatory environment — the efficiencies the state has put into place. The recent announcement by BLM is giving producers even more confidence.”
The federal Bureau of Land Management announced several weeks ago it would begin to clear the permit backlog for drilling on federal lands in the state and hold quarterly lease sales as opposed to one or two sales a year.
“I think all of it in conjunction points to strong interest in the Permian,” McEntyre said. “Those with acreage there are looking to increase it and to gather as many parcels as they possibly can. We have seen more than $13 billion in acquisitions in New Mexico in the last year. It is great news for our state and our state budget and shows that New Mexico is continuing to lead the nation in oil and gas development despite low oil prices.”
