April earnings from oil and gas leases hit new levels according to one state department.
On Tuesday, the New Mexico State Land Office announced the department earned $109.8 million in April from oil and gas lease royalties — its highest earning month to date.
The earnings broke the previous high of $108.9 million in February 2020, the department said.
The high earnings from royalties on oil and gas leases in April can be attributed to the higher prices on oil and sustained production this year, New Mexico State Land Office spokesperson Angie Poss said. There are around 3,000 oil and gas leases on state trust land, she said.
Oil and gas producers who lease state trust land are taxed anywhere from 12.5% to 20%, Poss said. The money from those taxes is then put towards the Land Grant Permanent Fund, which is managed by the department.
The fund helps with costs for three hospitals — the UNM Carrie Tingley Hospital, Miners’ Colfax Medical Center and the Behavioral Health Institute — as well as public schools and universities. About 95% of the fund money will benefit public schools directly, Poss said.
Royalties earned from oil and gas leases on state trust land also helps offset taxes that New Mexicans would otherwise pay.
“It’s a little known fact, but on average, the State Land Office saves the typical New Mexico taxpaying household an estimated $1,500 per year in taxes in money that would otherwise be needed to fund our state,” Commissioner of Public Lands Stephanie Garcia Richard said in a prepared statement. “This is a huge monetary relief for hard working New Mexico families, particularly during the coronavirus pandemic.”
The news comes on the heels of a breakout year for the state in oil and gas production. Number from 2020 from the state’s Oil Conservation Division show the New Mexico broke records in gas production with 1.9 trillion cubic feet of gas, and in oil production with 370 million barrels.
Revenue from oil and gas produced on federal land in New Mexico is a “50-50 split,” Poss said, with half going to the federal government and the other half going towards the state’s general fund.