New Mexico raked in its highest ever royalty amount from oil and gas leases in April, according to the NM’s State Land Office.
The previous record high royalty payments from oil and gas leases on a monthly basis was $109 million, reached in February 2020.
Now, for April, the royalty payments hit almost $110 million—higher than what New Mexico received prior to the pandemic. In fact, it was the highest ever.
On average, these royalties save the average New Mexican household $1,599 in taxes per year, according to Stephanie Garcia Richard, New Mexico’s Land Commissioner, as cited by the Associated Press.
New Mexico is the third-largest oil-producing state after Texas and North Dakota, and produces about a million barrels of crude oil per day, according to Energy Information Administration data.
It is also a top 10 natural gas-producing state.
So even though the state sees a rather high unemployment rate, it has enjoyed these high royalty payments. In 2019, the state’s total oil revenues made up 39% of New Mexico’s general fund revenues.
New Mexico’s oil and gas industry now faces a new hurdle. President Biden’s oil and gas lease ban on federal lands could deal a crushing blow to New Mexico, which sees 65% of its oil and gas production on federal lands.
While a temporary suspension of a ban on new lease sales was not expected to have immediate negative effects, it appears that the suspension could be in effect for quite some time during the review process.
Because New Mexico’s share of the Permian is heavily weighted toward federal lands and Texas’s side isn’t, future production growth is expected to favor Texas.