New Mexico's oil output gains top Texas in 2022, delivering half of US growth

NEW YORK, May 18 (Reuters) - New Mexico's crude oil production grew more last year than any other U.S. state, including top producer Texas, and accounted for half the nation's overall gain, signaling its importance in expanding U.S. oil output.

The state's production rose by a record 300,000 barrels per day (bpd) in 2022, to 1.6 million bpd, the U.S. Energy Information Administration said on Thursday. It was the third consecutive year that New Mexico's increase outpaced other states.

Overall U.S. crude oil production grew by 600,000 bpd in 2022, averaging 11.9 million bpd, the EIA said.

"New Mexico is like the new frontier, and there's a lot of upside potential," said Phil Flynn, an energy analyst at Price Futures Group. "Some people argue that some of (Texas's) best wells have been drilled."

Texas is still the largest oil-producing state with output totaling nearly 5.3 million bpd in February, far ahead of New Mexico's 1.8 million bpd, the most recent EIA data showed.

But New Mexico's gains, from investments by U.S. oil producers including Chevron Corp (CVX.N), opens new tab, ConocoPhillips (COP.N), opens new tab, Devon Energy Corp (DVN.N), opens new tab, and Occidental Petroleum Corp (OXY.N), opens new tab, are poised to continue.

The number of drilling rigs, a barometer for future production, has increased by five so far this year in New Mexico, compared to an eight-rig decline in Texas, the EIA said.

That is reversing a trend from 2022, when the rig count increased by eight in New Mexico and by 100 in Texas.

Outside of New Mexico and Texas, U.S. crude production grew 33,000 bpd last year. California's oil output decreased for the eighth consecutive year, Alaska decreased for the fifth straight year, and North Dakota fell for a third year, the EIA said.

The EIA estimates U.S. crude output will increase this year to a new record high of 12.5 million bpd and to 12.7 million in 2024. The last record output was hit in 2019 at 12.3 million bpd.