New Mexico became No. 2 in the nation for oil production this year.
In March, the state’s oil production tally spiked at 35.8 million barrels, topping North Dakota’s 31.8 million barrels. For reference, Texas logged 147.1 million barrels in March, a number no other state expects to approach.
For those who think of Texas as a “whole ‘nother country,” that would make New Mexico No. 1, but still just briefly, according to state Rep. Larry Scott, R-Hobbs, co-owner of Lynx Petroleum.
“Think about the month earlier where we had all that shut-in time due to weather issues and production fell way off,” Scott said. “What you saw in the following month was what I would call slush production from bringing all of those wells that had been shut in on line.”
Data indicates New Mexico has held the No. 3 slot since late 2017, usually well behind North Dakota.
Besides North Dakota, which maintained a substantial lead until the COVID-19 pandemic hit last year, other oil producing states in the top five are Alaska, Oklahoma and Colorado.
Alaska producers reported 14.1 million barrels of oil in March, less than half of North Dakota’s figure, while Oklahoma and Colorado reported 12.5 million and 11.4 million, respectively.
Actually, North Dakota’s oil production dropped briefly below New Mexico’s in the early pandemic months of May and June of last year, too, but bounced back by July.
Scott suggested New Mexico likely will slip back to the No. 3 place, or may have already, once the data are posted for the months following March.
“I would say (March production) was a bit of an anomaly,” Scott said. “There were some other factors involved there.”
The oilfield support expert noted two spikes, one down for February and one up in March.
Suggesting a plot of data for months preceding February, Scott said. “I think you’ll find it would be substantially more stable if you take those two spikes out.”
That’s not to say some increase in oilfield activity is unimaginable.
“At $70 (per barrel), with a prediction of going to $100, if that actually comes to pass, I think our activity levels will move from steady to frothy,” Scott said.
West Texas Intermediate crude was selling for $73.37 per barrel on Friday, having exceeded $70 early this month. Last year’s price of oil averaged less than half the current price.
Meanwhile, the data still shows Lea County maintaining its hold on the No. 1 slot for production among other counties in the nation.
Oil produced in Lea County also spiked in March to another record high at 22.5 million barrels, almost two-thirds of the state’s total of 35.8 million, according to data gleaned by county finance director Chip Low.
As part of his effort to manage Lea County’s finances, Low follows oil production, prices and rig counts not only in the county, but also in relation to other counties and states. A healthy portion of Lea’s revenue comes from oil production and equipment taxes.
For his data, Low credits the New Mexico Department of Taxation and Revenue, the Texas Railroad Commission, the North Dakota State Industrial Commission, the Colorado Oil and Gas Conservation Commission and the U.S. Department of Energy’s Energy Information Administration.
New Mexico’s data for the month of April likely will be unavailable until Monday or Tuesday, Low said, since the deadline for producers to report their production that month just occurred on Friday and some numbers usually trickle in late.
The finance director said he prefers to calculate monthly reports to daily averages since there are varying numbers of days in months. If the daily average remained the same, then the 31 days in March would be expected yield more than the 28 days in February or the 30 days in April. Of course, that would be true for North Dakota’s production data as well.
With regard to the rig count data, Low said Lea County jumped to 44 rigs last Friday, surpassing Eddy County’s 31 rigs. Earlier in the month Eddy topped Lea briefly in the number of rigs, but producers with wells in Lea County continued to report almost twice the oil production of those in Eddy.
Meanwhile, Eddy County maintains a healthy lead over Lea County in the amount of natural gas it produces, with Reeves County, Texas, leading both.
For instance, in March, natural gas producers in Eddy County reported 86 million MCF (million cubic feet) while those in Lea County reported 66.3 million MCF and Reeves County reported 88.8 million MCF.
