CALGARY, Alberta (Dec. 3, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report examining the Permian Basin’s production and drilling activity if operators cut spending next year to hold oil volumes flat at 6.4 million barrels per day, a production threshold that would likely alter the rig count by roughly 10%.
“Oil prices have softened recently but all regions of the Permian Basin, the largest source of crude oil in the U.S., continue to generate profit. If prices drop further, our experts wouldn’t be surprised if producers start paring 2025 budgets to curb drilling,” said Alex Ljubojevic, director at EIR.
“Reduced oil-related output from the Permian would be bullish for the Gulf Coast natural gas plays,” Ljubojevic said. “Lower Permian natural gas growth would need to be offset by increased production out of the Haynesville and Eagle Ford dry-gas regions.”
Key takeaways from the report:
- The recent decline in oil prices may force energy companies to reconsider spending plans for 2025. Holding the Permian Basin’s crude oil production at the current level of 6.4 million barrels per day requires companies to pare the number of active drilling rigs by about 10%.
- Longer laterals and improved well performance help explain why producers can pare rigs yet continue to keep oil volumes steady.
- The production of natural gas associated with Permian oil wells will continue to grow despite a decrease in drilling activity.
EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research.
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About Enverus Intelligence® Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers and more than 40,000 suppliers. Learn more at Enverus.com.
