ALBUQUERQUE, N.M. — Billions of dollars in new investment is flowing again in southeast New Mexico’s oil patch. Production is up, service companies are putting people back to work and more revenue is flowing into state coffers.
But by all accounts, it’s a modest recovery at best compared with the boom times of just a few years ago. Full recovery isn’t on the horizon yet. And, notwithstanding renewed confidence among producers, even the moderate gains achieved to date remain tenuous given the widespread uncertainty about oil prices going forward.
Many believe this is the new normal, at least for now, with most fresh investments coming from mid- and large-sized producers who have the cash to generate returns at $50 per barrel. Hundreds of others – small, independent producers who operate marginal stripper wells – are hunkering down to keep what they already have going until better times arrive.