Energy Analytics

Associated Natural Gas in the Permian – Friend or Frenemy?

byEnverus

For years associated natural gas from oil production in the Permian Basin has been viewed as a byproduct with little monetary value. Infrastructure constraints and challenged pricing caused many operators to flare produced gas rather than capture and sell it. With significant egress capacity additions out of the Permian and gas prices expected to stay above $3/MMBtu for the next couple of years, many producers and investors are wondering if they should pay attention to associated gas.

Figure 1 shows how well-level economics are impacted by different gas and oil prices in the prolific Stateline region of the Delaware Basin in Texas and New Mexico. As gas prices increase, the value of wells in gas-prone regions improve. Despite this increase, oil-rich areas generally screen as generating higher returns. We believe that operators are more likely to target assets with higher oil cuts even as gas prices rise; if operators are unable to do this, they will benefit from their former frenemy.

FIGURE 1 |  Well-Level Net Present Value (NPV-10) at Different Gas and Oil Prices*

*Vertically and horizontally co-completed, horizontal wells targeting the Upper Wolfcamp intervals. Assumes $800/ft drill, completion and equipment costs and 7,500-foot laterals.

Picture of Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

bA
Energy Transition
ByBrynna Foley

Publicly traded independent power producers (IPPs) are poised for a significant shift as renewable energy continues to reshape the generation mix. Enverus Intelligence® Research’s latest report explores how evolving generation and price forecasts will impact IPP profitability. The retirement of...

Enverus Blog
Energy Transition
ByCarson Kearl, Enverus Intelligence® Research (EIR) Contributor

Enverus Intelligence® Research (EIR) and many others have published at length on the coming wave of load growth that starkly contrasts more than a decade of stagnation.

Enverus Intelligence® Research Press Release - Winning in the West: Renewed opportunities are resurfacing in the DJ and PRB’s Niobrara
Energy Analytics Financial Services
ByEnverus

In a landmark move within the Canadian energy sector, Whitecap Resources Inc. (WCP) and Veren Inc. (VRN) have announced a near merger of equals. This strategic combination, with a purchase price of C$8.6 billion (US$5.9 billion) for Veren inclusive of...

Enverus Intelligence® Research Press Release - OPEC+ cuts and Trump tariffs force price downgrade
Analyst Takes Trading and Risk
ByAl Salazar, Enverus Intelligence® Research (EIR) Contributor

The following blog is distilled from an interview on CBC’s “The Eyeopener,” hosted by Loren McGinnis who interviewed Enverus Intelligence® Research’s (EIR) very own Al Salazar. Click here to listen to the full radio segment.  Consequences for U.S. Shale and...

Enverus press release - Renewing Alberta’s path for renewables
Energy Transition
ByAdam Robinson, Enverus Intelligence® | Research (EIR) Contributor

Since 2020, the demand for Power Purchase Agreements (PPAs) has surged, driven by tax incentives, corporate clean energy goals, and increasing power needs.

Enverus Press Release - Alternative fuels M&A focus turns from policy boosts to business resilience
Power and Renewables
ByKatherine Paton-Ilse

Most projects that enter the interconnection queues never get built. The queues are growing increasingly crowded, and backlogs continue to persist across multiple ISOs.

energy-transition-research
Energy Transition
ByThomas Mulvihill

Enverus Intelligence® Research (EIR) has updated its long-term load forecast model, predicting a 30% increase in total U.S. power demand by 2050, down from the previous projection of 39%.

Enverus_Press_Release_EV_Regional_Volatility_Thumbnail
Power and Renewables
ByNatalia Opie Davila, Customer Success Lead at RatedPower

Solar panels can be coupled or linked to a battery either through alternating current (AC) coupling or direct current (DC) coupling. AC current flows rapidly on electricity grids both forward and backward. DC current on the other hand, flows only in...

Enverus/RatedPower Press Release - RatedPower publishes 2025 Global Renewable Trends Report examining the green landscape
Power and Renewables
ByNatalia Opie Davila, Customer Success Lead at RatedPower

Solar irradiance, the power of solar radiation measured in W/m2 — is an essential metric when designing a PV system. One of the most important factors to consider when designing a solar photovoltaic (PV) system is the level of solar...

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert