In April of 2024, the Railroad Commission of Texas (“RRC”) posted a year-end review of production for the year of 2023. According to the RRC, Texas oil and gas production reached record highs in the year of 2023.[1] In 2023, oil production hit 1.92 billion barrels, 51 million barrels more than the previous record, and natural gas operators produced 12.01 trillion cubic feet, beating the prior year’s record by more than 13%.[2]
Increases in Texas production are often led by activity in the Permian Basin. World Oil reports that productivity improvements in the Permian Basin are often attributed to the increased efficiencies provided by drilling longer laterals.[3] In June of 2024, a record high was hit as rigs in the Midland Basin of Texas and New Mexico drilled an average of 47 miles of horizontal lateral wells.[4] Overall, drillers have extended the horizontal length of their wells since the pandemic to three or more miles in order to increase the output from production.[5]
Expectations for 2024 and 2025:
According to the U.S. Energy Information Administration (“EIA”), production in the Permian Basin is leading the national growth projected for 2025. In 2025, crude oil production in the U.S. is projected to grow to 13.7 million barrels per day and natural gas production is projected to grow to 114.3 billion cfd.[6] The “EIA forecasts crude oil production in the Permian Basin will increase by 430,000 b/d from 2023 to 6.3 million b/d in 2024 and 6.6 million b/d in 2025.”[7] Such growth is attributed to the drilling productivity improvements in the Permian Basin.[8]
The EIA expects crude oil production in the Permian Basin to increase by nearly 8% in 2024 from 2023 production.[9] “The Permian Basin accounts for nearly half of U.S. crude oil production, and EIA expects increased production in the Permian and other regions will drive U.S. oil production to successive records in 2024 and 2025.”[10]
[1] Texas Oil and Gas Production Hit Record Highs in 2023, Railroad Commission of Texas (April 9, 2024), https://www.rrc.texas.gov/news/040924-texas-oil-and-gas-production-records-tumbled-in-2023/.
[2] Id.
[3] Lucia Kassai, Permian, Bakken drilling rigs spur “record” U.S. oil production forecast on longer laterals, World Oil (August 29, 2024), https://www.worldoil.com/news/2024/8/29/permian-bakken-drilling-rigs-spur-record-u-s-oil-production-forecast-on-longer-laterals/.
[4] Id.
[5] Id.
[6] EIA forecasts Permian to contribute to increases in crude oil, natural gas, The Permian Basin Petroleum Association Magazine (August 30, 2024), https://pboilandgasmagazine.com/eia-forecasts-permian-to-contribute-to-increases-in-crude-oil-natural-gas/.
[7] Id.
[8] Id.
[9] EIA expects crude oil production in the Permian Basin to increase by nearly 8% in 2024, U.S. Energy Information Administration (June 11, 2024), https://www.eia.gov/pressroom/releases/press555.php.
[10] Id.
