Forecasting New Mexico's Oil & Gas Revenues: The Impact of Technology Change

Recent technological improvements in horizontal drilling technologies, in particular the development of a steerable GPS-guided bit, have altered New Mexico's oil industry. As a result, patterns in oil revenues are changing and the revenue estimation process used in recent years by the New Mexico State Land Office (SLO) is not performing as reliably as it once did. The SLO has contracted the University of New Mexico's Bureau of Business and Economic Research (BBER) to assist in identifying approaches and methods of forecasting SLO revenues from oil and gas renewable sources (i.e., bonus payments) and non-renewable sources (royalty income). (Authors: Gwendolyn Aldrich)