Remaining Oil and Natural Gas Resources of New Mexico
BROADHEAD, RONALD F., New Mexico Bureau of Geology and Mineral Resources, A Division of New Mexico Tech Socorro, NM 87801
New Mexico has produced 5.2 billion bbls of crude oil and 56 trillion cubic ft3 of natural gas since production of these resources began in the 1920’s. During 2002, 67 million bbls oil and 1.6 trillion ft3 gas were produced in New Mexico. Available estimates of undiscovered resources indicate a minimum of 1.48 billion bbls oil and between 68 and 89 trillion ft3 gas remain to be produced in the state. That is between 32 and 45 years of production for natural gas and 22 years of production for crude oil at present rates of production. In the case of oil, especially, this is a minimum figure because of the limitations involved in estimating an unknown resource that can be neither seen nor measured directly.
The Reserve Life Index (the ratio of proved reserves to annual production) has been relatively stable for the past two decades at approximately 12 years for natural gas and 10 years for oil. The stability of the Reserve Life Indices of oil and gas indicates that new, previously unproven resources are being discovered and brought into production at a rate that replaces production. In the case of gas, this is due chiefly to the discovery and development of coalbed methane whose contribution to annual New Mexico production has grown from 0% in 1987 to 38% in 1996 and still provides 30% of the state’s gas production today.
Significant volumes of crude oil and natural gas remain to be produced in New Mexico. Most of the existing resource base is not in proved reserves in known oil and gas fields. Rather, it occurs as undiscovered resources that will only be found and produced through application of sophisticated exploration methodologies and concepts and, ultimately, drilling. Production of oil and gas will decline unless new reserves of oil and gas are discovered, developed, and produced.
Oil and gas prices will affect what will actually be discovered and produced. Lower rates of discovery and production are associated with periods of low prices and higher rates of discovery and production are associated with periods of high prices.