Federal oil lease sale nets record $4B in NM, Texas
Levi Hill/News-Sun
SANTA FE — A regular Bureau of Land Management oil and gas lease sale in May brought in more than $4 billion in total receipts from lease sales in New Mexico and Texas, in what is being called proof of the importance of domestic production.
“America is sitting on some of the richest energy resources in the world, and President Donald J. Trump is committed to putting those resources to work for the American people,” said Secretary of the Interior Doug Burgum. “This over $4 billion lease sale is another sign that President Trump’s American Energy Dominance Agenda is delivering results. By cutting costs and removing barriers to development, we are unleashing American energy, strengthening national security, creating jobs and generating significant revenue for taxpayers and local communities.”
The Bureau of Land Management offered 74 parcels totaling 33,530 acres during the quarterly lease sale held May 20. Combined bonus bids and rental payments from the sale totaled approximately $4,007,944,870. Oil and gas leases are issued for a term of 10 years and continue as long as oil and gas are produced in paying quantities.
The lease sale surpassed the previous record sale that received $972 million in bids in New Mexico in September 2018. The New Mexico sale comes on the heels of another record sale in North Dakota that earned $44.3 million in bids.
Revenue generated through lease sales is shared between the federal government and the states where the parcels are located.
The record-setting sale comes at a time when the federal government reduced its royalty rate for new drilling operations to 12.5 percent from 16.67 percent.
Conversely, New Mexico recently increased its royalty rate on high-value leases from 20 to 25 percent, a move that many say will push oil producers off New Mexico lease lands.
However, the state has had several record-breaking sales since the new royalty rate went into effect last year, but many claim it is because the state withheld high-value leases for sale until after the new rate went into effect.
Jim Winchester, executive director of the Independent Petroleum Association of New Mexico, said the federal lease sale record shows oil companies prefer working with the federal government.
“The record-setting $4 billion federal lease sale underscores operators’ strong preference for working under federal regulatory frameworks that support responsible oil and gas development,” he said. “This stands in stark contrast to New Mexico’s state regulatory agencies, which are advancing expansive administrative regulations without clear statutory authority, threatening the viability of independent operators in the state.”
He added members of the IPANM have stated they prefer working on federal lease lands.
“IPANM members overwhelmingly favor operating on federal lands, and the shift in their drilling portfolios reflects a broader migration away from state lands,” Winchester said.
American Exploration and Production Council CEO Anne Bradbury reacted in a released statement to the record lease sale, urging Congress to build on the record by passing “comprehensive, durable permitting reform to ensure federal lands remain competitive regardless of the political party in power.”
“This record-setting lease sale reflects restored confidence in federal lands management, and it’s thanks to President Trump’s energy dominance agenda,” Bradbury said. “As oil and natural gas producers invest to strengthen America’s energy security, these results demonstrate the pivotal role of federal lands development to secure energy affordability.”
The Western Energy Alliance also applauded the Trump Administration for the record lease sale, saying it demonstrates the success of the One, Big Beautiful Bill Act in reversing restrictive energy policies.
“Americans see every time they go to the pump that we need to produce energy at home,” said Alliance President Melissa Simpson in a release. “As the world’s largest producer of oil and natural gas, we need to continue that energy dominance for our future prosperity.”
According to WEA, In the 16 months since President Trump took office, BLM has held five lease sales in New Mexico. It took four years for the Biden Administration to hold that many
“… and the results couldn’t be more stark,” Bradbury said. “In Trump’s time in office, BLM has earned nearly $4.5 billion cumulatively from lease sales in the state compared to $140 million total by Biden.”
Bradbury added New Mexicans benefit locally from the sale — nearly half the sale revenues are shared with the state, infusing $2 billion into school, hospital and infrastructure funds.
