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NMMI to receive $4.5 million from July lease sales

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Copyright © 2021 Roswell Daily Record

The State Land Office’s July oil and gas lease sale earned more than $30 million — an all-time high for the agency — which means higher-than-expected distributions to public schools and other beneficiaries, including a hefty unexpected $4.5 million check for New Mexico Military Institute.

In all, the State Land Office collected $30,035,248 in July’s lease sale, with public schools earning the majority, $23,897,140.
In addition to public schools, beneficiaries of the leased acreage and revenues included $4,494,610 for NMMI, $250,512 for New Mexico Tech, $225,700 for the University of New Mexico, $753,583 for Miners’ Colfax Medical Center, $150,900 for the Penitentiary of New Mexico, and $262,802 for improvements to the Rio Grande.
Fifty-eight bidders from 11 states registered for the July 18 sale. Eighteen bid on 82 tracts covering 20,814 acres of state trust lands in Chaves, Eddy, Lea and Roosevelt counties. The monthly oil and gas lease sales are held online in sealed and open bidding formats. This month, sealed bids generated $19,392,398 and online bids brought in $10,642,850.
Ameredev II of Austin, Texas, was the highest sealed bidder, paying $7,360,000, or $23,000 per acre, for 320 acres in Lea County.
OneEnergy Partners of Houston was highest online bidder, paying $6,001,100, or $18,753 per acre, for 320 acres also in Lea County.
The July earnings are also nearly double the agency’s total fiscal year 2018 operating budget of $15.9 million. The State Land Office is a self-funded agency and spends about 5 cents of every dollar it earns. The remaining revenue is distributed to the beneficiaries.
Public school monies are paid into the state’s general fund and distributed to each school district as appropriated by the state Legislature. The other beneficiaries receive checks monthly directly from the State Land Office.
“The July lease sale revenues far exceeded our expectations and our beneficiaries are thrilled,” State Land Commissioner Aubrey Dunn said in a news release. “It was a pleasure to call Maj. Gen. Jerry Grizzle at the New Mexico Military Institute and let him know he has an extra $4.5 million coming his way. Plus, since we’ve already met our budget we will be able to distribute huge amounts of money to public schools, universities and other trust beneficiaries we help support.”

The unexpected, one-time funding must be used by NMMI as a match for general obligation bond projects to renovate NMMI assets for many years.
“We were very pleased to receive the news from Land Commissioner Aubrey Dunn and certainly appreciate all he and his staff does and has done for the state land trust beneficiaries,” Grizzle, NMMI’s president and superintendent, said in a news release. “The funds from the leases first go to the land office of which part of the monies will go to the land maintenance fund of the land office with the remainder of the lease sales coming to the beneficiaries. What NMMI believes is that they will receive a portion of the $4.5 million to apply to needs. Also, NMMI receives a percentage of earnings from the land grant and permanent fund on an annual basis for operating expenses which totals approximately $19 million.”
NMMI’s next scheduled project, Cahoon Armory, was almost $5.2 million short of the estimated $10 million needed for a complete restoration. NMMI had planned to use revenue bonds to make up the shortfall, but can now consider the new funds to make up most of the difference. Other examples are energy-efficiency projects around the military school.
NMMI expects to receive the funds within the fiscal year ending June 30, 2018, although the funds may be made available sooner. The reason NMMI realizes these levels of benefits is due to the granted lands in the sections leased which dates back to the 1910 Enabling Act and subsequent 1912 New Mexico Constitution.
“We certainly appreciate the oil and gas lessees and operators in the state of New Mexico,” said Ed Martin, the State Land Office’s acting assistant commissioner for oil, gas and minerals. “Development of these leases will contribute long-term benefits to the state in terms of increased royalties and severance taxes.”