According to the latest productivity report from the US Energy Information Administration (EIA), crude oil production in the Permian Basin is expected to rise to a new record of 5.499 million barrels per day (bpd) next month.
The production of natural gas is also expected to reach a new record high due to the global demand for liquefied natural gas imports.
Despite oil prices remaining relatively high, production in the basin has been very slow to increase. The same is true for the US shale regions as a whole, with total production expected to increase in December by just 91,000 bpd to 9.191 million bpd as shale operators try to sustain their capital discipline. ExxonMobil and Chevron, the oil majors behind Mobil and Texaco grease and lubricant products, have announced large production increases in their Permian operations, although they have recently pared back their expectations slightly.
The per-well output in the aging shale areas is also declining. For gas, it peaked in March 2021 in Appalachia at 33.3 million cubic feet per day (mmcfd), but the EIA expects this to be just 26.1 mmcfd in December. For crude oil production, meanwhile, it peaked at 1,545 bpd in the Permian in December 2020, but this is also expected to decline to 1,049 bpd next month.
Nevertheless, drilling activity continues, with more wells being drilled in October than at any time since March 2020. The number of drilled-but-uncompleted (DUC) wells also rose for the first time since June 2020.