Steady crude oil prices in 2022 led to increased oil and gas tax collections for Eddy County government during the opening month of the 2023 fiscal year, according to data from the Eddy County Finance Department.
The County collected $8.9 million in taxes from the industry in July, compared to $8.8 million collected in June, said Eddy County Finance Director Roberta Smith.
Fiscal years in Eddy County start July 1 and end June 30.
More:Rising oil prices lead to increased revenues for Eddy County government
Smith said July’s revenue was based on April business activity in Eddy County’s oilfields.
She said the price of oil averaged around $102 a barrel and nearly 19 million barrels of oil were produced in the oilfields.
The lowest price for a barrel of West Texas Intermediate (WTI) sweet crude was $94.29 on April 11 and the highest was $108.21 on April 18, per information from the US Energy Information Administration (EIA).
The County projected it would collect $2.9 million in oil and gas taxes during July.
dr Chris Erickson, an economics professor at New Mexico State University in Las Cruces, forecasted rising oil and gas tax collections for Eddy County and the State of New Mexico for the rest of calendar year 2022.
WTI prices for a barrel of oil was $86.87 as of Sept. 2. The price was down by $6.19 during the week of Aug. 26, according to EIA data.
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Erickson said it is difficult to predict commodities trading like oil and gas due to fluctuations in markets.
“As goes oil and gas as does the State (of New Mexico) budget. If oil prices remain above $90 a barrel it will be a good year,” he said.
During a meeting of the Legislative Finance Committee (LFC) last month, officials said higher crude oil prices led to an increase of more than $2 billion in new money for State government during the 2024 fiscal year.
Eddy County predicted $2.95 million in oil and gas tax collections for the remainder of the 2023 fiscal year, per County Finance Department data.
The Finance Department anticipated oil and gas revenue collections at $39.5 million at the end of the 2023 fiscal year.
Revenue from oil and gas activity is a significant source for Eddy County and New Mexico State government operations, according to an economic report conducted by the Permian Strategic Partnership (PSP).
More:Oil and gas touted by southeast New Mexico leaders, economists warn of volatility
“The projected total economic impact of the Permian Basin to the state of New Mexico by 2050 will be anywhere from $19 billion to $29 billion in gross product and between 120,000 and 165,000 jobs,” said PSP President and Chief Executive Officer Tracee Bentley.
Gross receipt taxes (GRTs) collected during the first month of the new fiscal year were down slightly from June, the last month of the 2022 fiscal year, according to financial data from the County.
Eddy County collected $3.95 million GRTs in July compared to $3.98 million in June.
Gross receipt taxes (GRTs) were defined as money received through business activity by the New Mexico Department of Finance and Administration (NMDFA).
Despite the slight drop, Eddy County was 94 percent ahead of the $2.18 million in GRT collection forecasts for 2023.
Eddy County’s Finance Department predicted $2.18 million for GRT collections for all of fiscal year 2023.
Mike Smith can be reached at 575-628-5546 or by email at [email protected] or @ArgusMichae on Twitter.
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