Artesia: Artesia's lush lands yield everything from alfalfa to oil and gas

New Mexico Business Journal, July, 1998 by Gailanne Dill

One game days it seems like everyone turns out in this "City of Champions." This is "Big Orange Country" and all over the community are signs of its commitment, not only to its state champion teams and its schools, but also to its overall future.

Now, with the expansion of U.S. 285 and negotiations with large corporations, Artesia's future-like its water-is crystal clear.

Artesia is surrounded by green fields in the Pecos River Valley. Known for its abundant water and named for the artesian wells that first attracted settlers, its economic base is made up primarily of oil and gas, agriculture, ranching, dairies and small businesses. Now this community of 12,000 people in Eddy County will have a four-lane highway that they expect will be a pathway for economic development.

The expansion of U.S. Highway 285, the main north-south thorough-fare for Artesia, should be complete by December. As part of the Relief Route for the Waste Isolation Pilot Plant, the four-lane project extends from Roswell to Carlsbad. U.S. 285 will connect to Interstate 40 by the year 2001.

"With this expansion, we are seeing much more activity and are receiving more requests for information about Artesia from business and industry representatives," said Richard Price, executive director of the Greater Artesia Chamber of Commerce. Price said the new highway, along with the pro-business atmosphere, makes this an ideal time for the introduction of new companies.

The chamber has just finished recruiting a trucking firm to haul milk produced by area dairies. Price said Ryder Truck and Dairy Express have formed a partnership and are working on a permanent facility employing 75 people.

Construction on a building for a truck-driving school will begin shortly. A partnership between state and local agencies, the project will train truck drivers at a reduced cost. The school trained more than 200 drivers last year, 98 percent of whom are employed, according to Price.

Nuchik Inc., a company out of Albuquerque, intends to build one of the most technologically advanced poultry processing facilities in the world on 2,680 acres six miles west of Artesia, according to Gary White, the company's president. The city passed an ordinance to approve up to $210 million in industrial revenue bonds for Nuchik. To take advantage of the bonds, Nuchik is obliged to raise $21 million in capital in two years. The company has thus far raised $1 million and is negotiating with an equity partner.

Nuchik, which means "good food" in Navajo, is a start-up company looking for New Mexico suppliers of corn, soybeans, milo, wheat and other items. White said the facility will be self-contained, taking care of its own water and domestic waste. He said it will be the first in the nation to be air chilled, instead of water chilled, which will save water.

White said Nuchik will use every part of the chicken "except the cluck." Feathers will end up as linings in bandages and diapers. Blood will be turned into blood meal and bones into bone meal. Even the manure will be processed and utilized.

According to mayor Daniel Reyes, the ordinance was the first of several steps to bring the company to Artesia. He said the city council has a committee working on the lease agreement, bond sales, performance agreement and indentures. If all goes well, the plant will employ 900. Nuchik plans to build its own school to prevent the children of its employees from overwhelming Artesia's school district.

"We still have these four or five steps to go, but we are making progress," said Reyes.

Artesia has actually been in the oil business for 75 years. The Yates family in Artesia has been exploring for oil and gas since 1923 and operates more than 4,000 oil and gas wells. The largest independent oil and gas producer in the state, Yates Petroleum Corp. was rated No. 1 in 1995 and 1996 for oil production by the New Mexico Oil and Gas Association. The Yates' companies employ 350 people. Yates Petroleum's total assets are more than $300 million and its gross revenues exceed $100 million, according to Price. Yates has consistently ranked in the top 10 producing operators in New Mexico.

Oil and gas production has slowed down some from the excellent revenues seen last year, but the hope is that that trend will soon be reversed. "We are optimistic that the price of oil will turn around, and when it does, we will be looking to drill more oil wells," said Randy Patterson, land manager and secretary of the corporation.

For nearly three decades Navajo Refining Co. has been a symbol of how important the oil and gas industry is to the area. Bill Gray, senior vice-president for Navajo, said the company employs 430 people. Navajo takes oil produced in southeastern New Mexico and refines it into gasoline, jet fuel and asphalt. He said production has increased from 16,000 barrels a day to 60,000 in the past 28 years, and the number of employees has tripled. Navajo's contributions to Artesia include a $17 million-plus permanent payroll and extensive use of materials and contract labor from the area, Price said.