Crude oil production from the Permian Basin exited 2023 at an all-time high of 6,115 Mb/d, according to East Daley Analytics’ forecast, punctuating a year of strong growth despite declining rig activity.
East Daley estimates Permian oil production grew nearly 500 Mb/d in 2023, up 8.8% in December ’23 from YE22 output of 5,620 Mb/d (see figure). EDA’s oil and natural gas production forecasts are available by basin in the Production Scenario Tools in Energy Data Studio.
Growth in Permian crude oil is weighted toward the back half of 2023 in our forecast, coinciding with new natural gas processing infrastructure and gas pipeline expansions that allowed producers to bring more wells online.
Oil production in West Texas and New Mexico continued to grow despite declining rig counts through the year. Rig activity in West Texas and New Mexico fell 49 rigs (-14%) in 2023, exiting the year at 302 rigs vs 351 at YE22. The Permian rig count has not been this low since January 2022, when basin oil production was at 4,977 Mb/d.
Mergers have contributed to falling Permian rig counts. Private operators posted the largest yearly decline in basin rig counts, down 33% in 2023. Drilling by private operators fell 17% in the Delaware and 36% in the Midland sub-basins.
Despite fewer rigs, efficiencies in drilling and completion work are driving productivity gains from new wells and more than offsetting lower rig counts in our model. EDA projects Permian crude production to grow 7% in 2024 while rig counts hold relatively steady, up 2% at YE2024. – Kristine Olesczek.
Join East Daley for mid-Winter Natural Gas Update
East Daley will review updates to our natural gas forecast and discuss the market outlook in a new online webinar on Wednesday, February 7. In “A Disjointed Winter Gives Way to a Volatile 2024,” EDA’s Natural Gas team looks at the effects of another mild winter on the gas market, and the potential for upside ahead from new LNG projects and higher power generation demand. How long will oversupply last? Join us Wednesday February 7 to discuss the road ahead for natural gas.
Dirty Little Secrets is Now Available
Dirty Little Secrets is now available. East Daley held our Dirty Little Secrets annual webinar on Wednesday, December 13. In “Volatility Will Continue Until Morale Improves,” we reviewed the factors likely to drive volatility ahead in oil, natural gas and NGL markets. We review the outlook for these markets and the midstream sector. Review the Dirty Little Secrets webinar here.
East Daley, Hart Bring NEW Gas & Midstream Weekly
East Daley is teaming up with Hart Energy on the NEW Gas & Midstream Weekly newsletter. This new report combines the strengths of Hart Energy's journalistic reporting and analysis on natural gas, LNG, midstream energy and deal-making with EDA's deep research and intelligence of hydrocarbons, storage and transportation.
Published every Thursday morning, this new powerhouse newsletter is an interactive and enlightening read highlighting breaking news, exclusive interviews, videos, charts, maps and more. The newsletter utilizes East Daley's Energy Data Studio tools for natural gas predictive analytics with Hart Energy's Rextag mapping tools to present a holistic view of pricing triggers, infrastructure growth, pipeline and processing bottlenecks, regulatory and legal hurdles, and the inevitable solutions.
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact email@example.com.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.