Aging wells plague small N.M. producers

ALBUQUERQUE — Smalland medium-sized oil and gas producers in New Mexico are struggling to keep running aging wells based on outdated technology.

The Albuquerque Journal reports that independent producers might soon be swallowed up by an unprecedented oil and gas boom in southeastern New Mexico as ExxonMobil and other industry titans pump billions of dollars into previously untapped sections of the state’s oil patch.

Those smaller companies, which have flourished for decades in New Mexico’s side of the Permian Basin, don’t have the resources to invest in the modern drilling technology needed to dig into the oil-rich, hard shale-rock formations where the majors are now concentrated.

With oil prices well below the $100 per barrel level that kept low-volume “stripper wells” profitable in years past, many independent operators are now choosing to invest in only their most-productive ones and abandon others, said Gregg Fulfer of the Fulfer Oil and Cattle Co. in Jal, which operates about 150 marginal wells.

“I think the little guys will be history pretty soon,” Fulfer said.

Local government officials and economic development professionals say the flood of investment pouring in from the major players will easily make up for economic losses from the decline in traditional, or legacy operations that fueled past booms.