Permian Basin: The Last Man Standing
Published: March 6, 2025 Category: Basin Report Access: Free
If you want to understand U.S. oil production in 2025, you need to understand one basin. Everything else is context.
The Permian Basin is producing approximately 6.2 million barrels of oil per day — roughly 48% of total U.S. crude output. The second-largest producing basin, the Eagle Ford, comes in at around 1.1 MMbbl/d. The Bakken sits at 1.18 MMbbl/d. Neither is growing at any meaningful pace. The Permian isn't just leading; it's lapping the field.
But "the Permian" is doing a lot of work as a single term. There are actually two fundamentally different sub-basins operating under that umbrella, and they behave differently in meaningful ways.
Midland vs. Delaware: Two Basins, One Brand
The Midland Basin (east side of the Central Basin Platform) is more geologically predictable. Stacked benches in the Spraberry and Wolfcamp formations offer repeatable targets with lower geological risk. This is where Pioneer built its empire — 850,000 net acres of it — and it's now ExxonMobil's primary development canvas. Lateral lengths here are pushing 15,000+ feet on premium acreage, and well costs per foot have been declining as operators scale.
The Delaware Basin (west side, straddling New Mexico and Texas) is geologically richer but more complex. Multiple stacked pays — Bone Spring, Wolfcamp, Delaware Sand — offer tremendous resource density, but the subsurface variability is higher. Production per well can be exceptional; it can also disappoint if you don't understand the local geology. Operators like Occidental and Diamondback have built deep technical expertise here. Chevron has a significant legacy position in the New Mexico Delaware that's getting renewed attention.
These aren't academic distinctions. They matter for well economics, completion design, and development sequencing. When you hear someone cite "Permian production," they're averaging across two very different geological settings.
The Tier 1 Acreage Problem
Here's the uncomfortable reality: the best Permian acreage is increasingly concentrated in a small number of hands.
Post-consolidation, ExxonMobil controls the heart of the Midland Basin. Occidental dominates large portions of the Delaware. Diamondback — which acquired Endeavor Energy in a $26 billion deal announced in early 2024 — cemented its position as the largest pure-play Permian independent, with roughly 838,000 net acres and production approaching 460 Mboe/d. Chevron holds a substantial position in both sub-basins.
What's left for the remaining independents? Secondary acreage with higher breakevens, thinner benches, and less established development templates. The Permian is not democratized. The easy acreage — the stuff that works at $50/bbl — is largely spoken for.
New-well oil production per rig in the Permian currently averages approximately 1,400 bbl/d — the highest productivity of any U.S. basin by a significant margin. That metric tells you why everyone wants in. It also tells you why competition for positions has been so fierce and why deal values were so high. You don't pay $59.5 billion for average geology.
DUC Inventory: The Buffer Is Thinning
The EIA's most recent drilling productivity report puts Permian DUC (Drilled but Uncompleted) well inventory at approximately 893 wells. That sounds like a meaningful buffer — and it is, relative to other basins — but context matters. In 2021, when operators were drawing down DUCs aggressively to generate cash without drilling, Permian DUCs hit a peak above 3,000. The current level is roughly 30% of that peak.
DUC drawdown is one of the cleanest leading indicators of future production trends. When operators are completing more wells than they're drilling, they're running down the buffer. When that buffer gets thin, the relationship between rig count and production becomes more direct — and any activity slowdown has faster production consequences.
The Waha Problem
I'd be doing you a disservice if I wrote a Permian piece without addressing the Waha natural gas pricing situation, because it's not a footnote — it's a meaningful drag on operator economics.
Waha Hub, the primary Permian gas pricing point in West Texas, went negative multiple times in 2024. We're talking about associated gas so plentiful that producers couldn't give it away — they were effectively paying to have it taken. The root cause: takeaway capacity hasn't kept up with Permian associated gas volumes. The Matterhorn Express Pipeline, a 580-mile, 2.5 Bcf/d system connecting Permian supply to Waha and onward to Gulf Coast markets, came online in late 2024. That provided some relief, but the structural problem persists.
For oil-focused operators, associated gas is an afterthought — until it becomes a penalty. Negative Waha prices effectively reduce the realized value of every barrel produced in certain areas of West Texas. For operators with significant gas capture requirements to comply with flaring regulations, it's a direct hit to the income statement.
Who's Growing, Who's Integrating
Growing: Diamondback Energy is the one to watch among pure-plays. Post-Endeavor, they have the acreage inventory and operational execution to sustain 460-480 Mboe/d through 2025-2026. EOG's Permian position — particularly in the Delaware — continues to punch above its footprint. Occidental is delivering on its Delaware exposure while also managing the complexity of its CrownRock acquisition integration.
Integrating: ExxonMobil is running a more measured development pace on the Pioneer assets than Pioneer itself would have. Capital goes to projects that compete on XOM's global portfolio — meaning some Permian inventory that would have been drilled aggressively under Pioneer is sitting in queue behind XOM projects with higher risk-adjusted returns. This is not a criticism — it's rational capital allocation. But it means Midland Basin production from XOM acreage may grow more slowly than the Pioneer standalone trajectory implied.
So What?
The Permian is the engine of U.S. oil production, and that isn't changing. But "the Permian is booming" is the wrong mental model for 2025. The right model is: a highly concentrated basin, with Tier 1 acreage in a handful of large hands, producing at peak efficiency, with infrastructure constraints on the gas side, and a DUC buffer that's thinner than most people realize.
If you're an engineer, geologist, or landman working in the Permian — you're in the right place. But understand who controls the chess pieces now. The game has changed.
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