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Lea continues to lead in oil rig count

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Curtis Wynne/News-Sun

After almost three years, Lea County still leads all other counties in the nation with active oil rigs, surpassed only by two whole states — New Mexico and Texas.

Adding six rigs in the week before Sept. 23, according to data published by oil field services company Baker Hughes, Lea County had a total of 71 active rigs, about two-thirds of New Mexico’s 111 as of that date.

“We’re very lucky,” said County Commission Chairman Dean Jackson, “first, to live where we live and, second, to have all the workers we have that go to work every morning before daylight and usually come home after dark, and also have to fight the very dangerous roads.”

Jackson said Lea County alone produces more oil and gas than several entire nations, including oil-rich Venezuela, information he recently gleaned while attending the annual conference of the New Mexico Oil and Gas Association in Santa Fe.

“God has blessed us with a natural resource, a resource that even the activists against oil and gas use … every day, whether it’s in the plastic in their glasses or the fuel for their cars,” the county chairman said. “We need to get the message out that we’re not the evil ogre.”

In the top three for rig counts nationally for several years, Lea County took the No. 1 spot among counties in December 2019 when New Mexico took the No. 2 slot for states, according to a study by the University of New Mexico reported earlier this year.

The recent uptick in active rigs failed to excite municipal leaders as much as it may have before the state Legislature changed gross receipts tax rules, but still warranted a nod.

“The only benefit we get from that is the lodger’s tax,” said Hobbs Mayor Sam Cobb. “The drilling itself is considered construction. It’s never been a GRT receipt.”

Workers spend their time off in temporary lodgings, often in Hobbs, Eunice or Jal.

“Unless they’re staying in Carlsbad,” Cobb noted. “We don’t get all the gravy. We’re seeing some increases, but not like it was in 2016. The (hotel) occupancies are up, but they’re in the 80s (percent). It use to be you couldn’t get a room. It’s not like that any more.”

Cobb said changes generally occurred after the COVID-19 pandemic sent many workers home to Arkansas, Louisiana or other areas. Oil companies now are having a hard time getting those workers to return to the oilfields of New Mexico, he said.

On the other hand, closer to the southern Lea County oilfield, the City of Jal sees temporary housing at capacity.

“We know that all the man camps are pretty much full and we have one man camp that’s getting ready to add 30-40 trailers,” said Jal City Manager Matt White.

With an already jammed east-west street through Jal, state road NM-128, the increase in the number of active rigs has caused little or no significant effect.

“As far as actual traffic or anything else, it’s about the same as it has been for six or eight months,” White told the News-Sun. “We haven’t really seen a lot of change here in Jal.”

Among other leading counties in the Permian Basin, Eddy County logged 37 rigs on Sept. 23.

According to the Permian Basin Oil & Gas Association’s weekly newsletter, using Baker Hughes rig count data, Eddy County is second only to Lea County with Texas counties falling in line behind them.

Louisiana is No. 3 among states with 66 rigs followed by Oklahoma with 65 and North Dakota with 37.

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