Latest New Mexico oil, gas lease sale attracts $5.5 mil in high bids

New Mexico's latest monthly state oil and gas lease sale attracted $5.5 million in high bids Nov. 19 -- lower than the last few sales but higher than others earlier in 2024, post-auction records released by the State Land Office showed.

Five upstream companies and other entities placed bids on a total of 14 leases, with the highest sum weighing in at $2.4 million –- amounting to nearly 44% of the total sum of high bids, the records showed. That bid was placed by land brokerage provider Katy, Texas-based Dudley Land Co., and was the company's only high bid in the sale.

The second-highest offer of the auction was $1.24 million, or 22% of the total high bids, placed by Federal Abstract Co. -- a frequent bidder in New Mexico state land sales.

Santa Fe, New Mexico-based Federal Abstract provides complete records of the chain of title and interest holders in a lease on federal, state and indigenous lands.

The Federal Abstract bid, plus the Dudley bid, together accounted for two-thirds of the total $5.5 million in high bids.

Highest number of winning bids

Federal Abstract also placed the highest number of winning bids in the November sale -- a total of six, which added together amounted to $1.5 million.

The other multiple high bidder was Magnum Producing, which placed five high bids totaling $700,750. Corpus Christi, Texas-based Magnum focuses mainly on the US Gulf Coast region but has acreage and prospects in 19 producing states.

Martin Oil & Gas, a Colorado-based land services company, also had one high bid of $400,529.

And privately held Midland, Texas-based producer Marshall & Winston placed a winning bid for another tract of $480,080.

New Mexico's November 2024 oil and gas lease sale sum total was lower than the October sale, which took in $6 million, and the September auction, which captured $8.3 million. But the November sale is larger than several state sales earlier in the year.

Withholding choice acreage

State Land Office Director Stephanie Garcia Richard said in early 2024 that she would withhold some of the choicest state acreage until the state legislature met in a year and could approve a higher royalty rate.

She said state agencies that benefit from oil and gas revenues are losing money at the current rate of 20% rather than the 25% being proposed. That would be about in line with other large producing states.