SANTA FE, N.M. (AP) — There are fewer premium tracts available for leasing by oil and gas developers on state trust land in the Permian Basin, and New Mexico land managers say that’s having an effect on revenues generated by monthly lease sales.
The State Land Office said Monday that lease sales netted nearly $17 million for the year, marking a decrease of nearly 68% when compared to 2019. The sale completed earlier this month brought in more than $2.3 million for 2,880 acres.
After the December sale, only 9% of state trust land mineral estate in the premium part of the Permian Basin is available to be leased, according to the agency.
Land Commissioner Stephanie Garcia Richard said that means all or almost all of the premium trust land tracts could be held by a lease within the next few years.
“The State Land Office has taken action to assure that we are making as much money for our beneficiaries as possible from the land that we still have available,” she said, pointing to the implementation of minimum bids for all trust land oil and gas sales.
Revenues generated from the drilling and other development on state trust land is used to fund public schools, colleges and hospitals. Each acre leased for oil and gas exploration has an assigned beneficiary institution, with the payment for lease bonus sales as well as the subsequent royalties on oil and gas production directly benefiting that beneficiary.
Despite the record drop in prices earlier this year and the economic fallout stemming from the pandemic, industry officials say the Permian Basin has remained productive.