New Mexico drillers operate in the shadow of top oil-producing neighbor Texas, but the shale revolution hardly passed by the Land of Enchantment.
The state's crude output more than doubled between 2008 and 2015, and New Mexico ranks sixth in the United States for production, excluding offshore drilling. That is in no small part because the Permian Basin — the most prolific oil play in the United States — extends from Texas into the southeast corner of New Mexico.
In the face of falling oil prices, the number of onshore oil and gas rigs operating in New Mexico has plunged to 16 from 90 in just two years, a decline roughly in line with the national pace of rig reductions.
But data collected by IHS and shared with CNBC show that drillers are still prepping wells for production in the Delaware Basin section of the greater Permian, which lies beneath Eddy and Lea counties near the Texas line.
The average productivity for wells in the two counties has increased by about 50 percent from the beginning of 2013 through the middle of 2015, according to IHS analysis.
IHS estimates drillers can break even on the best wells in the Delaware when prices hit $38. U.S. crude futures have been trading between about $35 and $42 in recent weeks.
As the state's fortunes rose with oil prices through mid-2014, job gains offset declines in manufacturing and more tepid growth in the services sector. Wages, too, outpaced other industries, creating boom towns in places like Hobbs, New Mexico.
But with oil companies shedding thousands of workers, a high ratio of oil and gas employment to the overall labor force has become a liability for some states.
New Mexico's labor exposure to the energy sector relative to the national norm is roughly on par with Texas'. Both employ about 2.6 times more oil workers than the U.S. average. But that still leaves the states in a better position than Wyoming, where energy employment is 13 times above the average.
New Mexico is also less dependent on tax revenue from oil and gas taxes — known as severance tax — than some other top oil-producing states.
Income from severance tax accounted for about one-sixth of that state's overall tax revenue in 2014. Compare that to Alaska, which derives more than two-thirds of its revenues from state levies on hydrocarbon extraction.
To be sure, the share does not cover the oil and gas industry's total impact on New Mexico's state finances. Contributions from the industry accounted for 35 percent of New Mexico's revenues at the peak in 2014, according to the state economic development officials.
