Growth in Permian Associated Gas Production
Permian natural gas production increased faster than crude oil
June 18, 2026 eia.gov
The Permian region’s marketed natural gas production grew from 17.2 billion cubic feet per day (Bcf/d) in 2021 to 27.6 Bcf/d in 2025, a 60% increase, according to data from our latest Short Term Energy Outlook. Over the same period, crude oil production grew by 39%, going from 4.7 million barrels per day (b/d) to 6.6 million b/d. The higher growth in natural gas production is the result of increasing gas-oil ratios (GOR).
As more oil and natural gas are produced, pressure within the reservoir declines; natural gas is easier to produce at lower pressures and the GOR increases.
The GOR in the Permian region has steadily increased over the past five years. In 2025, the GOR averaged nearly 4,200 cubic feet of natural gas per barrel of oil (cf/b), a 16% increase from 2021. As the region matures, we expect the GOR to continue to increase. As the GOR rises, we estimate that the production growth rate of natural gas will continue to exceed the growth rate of crude oil in the Permian region.
In 2021, the Permian produced 17.3 Bcf/d of natural gas and 4.7 million b/d of crude oil, and the GOR averaged 3,628 cf/b. If the GOR had remained the same as in 2021, the Permian region would have produced only 23.8 Bcf/d of natural gas in 2025, 14% less than actual production that year. The extra 3.8 Bcf/d of gas in 2025 comes because of this higher GOR.
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Replies to This Discussion
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Oil & Gas ProPermalink Reply by Rock Man on -
Combination of more Delaware Basin and Southern Midland Basin production (high GOR} and higher GOR on older wells (due to depletion) plus - and most importantly - the numerous new gas pipelines bringing gas from Permian to the Gulf Coast
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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on -
Yes, as associated gas production grows, pipeline takeaway capacity grows also. More natural gas making its way to the Gulf coast markets to compete with Haynesville Shale production. And as natural gas demand increases from LNG export capacity and data center growth, supply is growing to balance supply with demand. Likely keeping the price of natural gas range bound for the foreseeable future.
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Oil & Gas ProPermalink Reply by Rock Man on -
Note - based on revenue statements from Permian Resources for March 2026, post processing residue gas was being priced for -$2.15 to -$3.15 per MCF.
Yes - negative
This was from Reeves County - thinking the Waha plant.
More takeaway capacity is needed for the Permian to reverse this negative issue.
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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on -
We've seen WAHA prices go negative many times the last few years. I've never read the full story. If Permian operators are paying midstream companies to take their gas, what price do those midstream companies get from end users? Are they getting paid on both ends of the transaction? If so, Permian midstream companies may be a better investment opportunity than the O&G companies they serve.
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Oil & Gas ProPermalink Reply by Rock Man on -
I am not the person to address this negative pricing issue. But I do know that some operators "ding" the royalty owners commensurate with the negative gas pricing.
Another issue that should be addressed in a good O&G lease.
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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on -
So, the operator deducts from the lessors' oil price some portion of what it pays for the midstream company to take the gas when prices are negative? I hadn't thought about that as we don't deal with it in the Haynesville play. I imagine that savvy O&G attorneys try to address that in their clients' lease terms.
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Oil & Gas ProPermalink Reply by Rock Man on -
Operator deducts the negative "value" of the gas from the total check.
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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on -
Ouch!
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Oil & Gas ProPermalink Reply by Rock Man on -
One of my clients has wording in their lease that states that realized gas prices cannot be less than the value of this gas if it is never produced.
Technically, this should prevent operator from doing this "negative gas ding"
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