The U.S. Energy Information Administration (EIA) predicts a surge in domestic energy production in 2025, with crude oil output reaching an average of 13.7 million barrels per day (b/d) and marketed natural gas production hitting 114.3 billion cubic feet per day (Bcf/d), according to its latest Short-Term Energy Outlook (STEO).Â
The Permian Basin, spanning western Texas and eastern New Mexico, is driving this anticipated growth. The EIA attributes this to a combination of factors:Â increased productivity, expanded infrastructure, and sustained high crude oil prices.Â
Despite a decrease in active rigs since late 2022, U.S. crude oil and natural gas production has continued to rise. The Permian region has consistently led the Lower 48 states in active rigs since early 2023, and continues to bring hundreds of new wells online each month. Â
As of July 2024, newly completed Permian wells achieved an average production of 433,000 b/d in their inaugural full month, while natural gas production from these new wells averaged 780 million cubic feet per day. This new well output surpasses the decline in production from existing wells.
Moreover, the EIA believes this escalating well productivity reflects the successful implementation of advanced drilling and completion techniques by Permian operators. These techniques include longer lateral lengths, optimized well spacing, and enhanced fracturing designs.
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Permian natural gas production forecast
The STEO report stated that they forecast an increase in crude oil production in the Permian region. They predicted a rise of 430,000 b/d from 2023, reaching 6.3 million b/d in 2024 and 6.6 million b/d in 2025. This increase was attributed, in part, to improvements in drilling productivity.
The report further stated that they forecast an increase in marketed natural gas production in the Permian region. They predicted a rise of 1.9 Bcf/d in 2024 and 1.0 Bcf/d in 2025, reaching an average of 25.8 Bcf/d in 2025. Furthermore, the report noted that most of the natural gas production in the Permian is associated natural gas, produced from oil-directed wells. The STEO concluded that they expect crude oil prices to remain high enough to support growth in both crude oil and associated natural gas production in the region.
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