A report this week from Enverus Intelligence Research says the decline in oil prices could encourage companies to reconsider spending plans for 2025 and reduce the number of drilling rigs.  The report said, “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 percent.”

Alex Ljubojevic, a director at Enverus, said Tuesday, “If prices drop further, our experts wouldn’t be surprised if producers start paring 2025 budgets to curb drilling.”

Longer laterals and improved well performance help explain why producers can pare rigs yet continue to keep oil volumes steady, according to Enverus.  And the production of natural gas associated with Permian oil wells will continue to grow despite a decrease in drilling activity.  Ljubojevic added, “Lower Permian natural gas growth would need to be offset by increased production out of the Haynesville and Eagle Ford dry gas regions.”

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