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More Gas Per Barrel of Oil: A Growth Lever for Permian Operators
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Key Takeaways
WTI above $95/barrel is spurring Permian drilling, raising oil output and associated gas.
EIA sees Permian crude 6.63MM bpd this year vs. 6.58MM last year; gas rising into next year.
FANG's Q1 mix was over half oil, with the rest natural gas and NGLs, positioned for higher output.
High oil prices have been making newspaper headlines, as the Iran war shock has pushed commodity prices back toward their glory days. Handsome oil prices are supporting increased crude production, which is boosting associated natural gas output from wells in prolific basins. Could this trend brighten the business outlook for Diamondback Energy, Inc. (FANG - Free Report) , Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) ?
More Oil Drilling Brings Up Extra Natural Gas
The price of West Texas Intermediate (“WTI”) crude is trading above $95 per barrel, which is highly favorable for exploration and production activities. Increased drilling and upstream activities will likely result in higher production of the commodity in the Permian, the most prolific basin in the United States. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook estimated that total crude oil production in the Permian would be 6.63 million barrels per day this year, higher than 6.58 million barrels per day last year.
This higher crude production, being backed by extremely handsome prices, is bringing up additional associated natural gas, especially in the Permian, the EIA added. Thus, the production of natural gas will likely continue to rise through next year, EIA believes.
Increased production of both oil and natural gas is going to aid the earnings of explorers and producers in the Permian Basin.
3 Permian Players in the Spotlight
Diamondback Energy is a well-known pure-play Permian player. In the first quarter of this year, the company's oil production was responsible for more than 50% of total volumes, while the rest was natural gas and natural gas liquids. FANG, sporting a Zacks Rank #1 (Strong Buy), is well-positioned to capitalize on rising oil prices and increasing gas production.
ExxonMobil, with a Zacks Rank of 1, has a strong footprint in the Permian and is among the advantageous assets that the energy major believes will contribute to its long-term production growth. In the Permian, the integrated giant has been employing lightweight proppant technology and hence has been capable of boosting its well recoveries by up to as much as 20%. Production of liquids by XOM in the first quarter of 2026 accounted for more than 70% of total volumes, while the rest was natural gas. Thus, like FANG, XOM is also in a sweet spot now. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chevron also has a strong footprint in the Permian. CVX mentioned that it has an interest in one of every five wells in the most prolific basin. Over the years, while growing its operations in Permian, Zacks #1 Ranked CVX has been able to generate more production while employing lower capital spending, thanks to advanced drilling techniques. Being a producer of both oil and natural gas, the company is well-positioned to gain.
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More Gas Per Barrel of Oil: A Growth Lever for Permian Operators
Key Takeaways
High oil prices have been making newspaper headlines, as the Iran war shock has pushed commodity prices back toward their glory days. Handsome oil prices are supporting increased crude production, which is boosting associated natural gas output from wells in prolific basins. Could this trend brighten the business outlook for Diamondback Energy, Inc. (FANG - Free Report) , Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) ?
More Oil Drilling Brings Up Extra Natural Gas
The price of West Texas Intermediate (“WTI”) crude is trading above $95 per barrel, which is highly favorable for exploration and production activities. Increased drilling and upstream activities will likely result in higher production of the commodity in the Permian, the most prolific basin in the United States. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook estimated that total crude oil production in the Permian would be 6.63 million barrels per day this year, higher than 6.58 million barrels per day last year.
This higher crude production, being backed by extremely handsome prices, is bringing up additional associated natural gas, especially in the Permian, the EIA added. Thus, the production of natural gas will likely continue to rise through next year, EIA believes.
Increased production of both oil and natural gas is going to aid the earnings of explorers and producers in the Permian Basin.
3 Permian Players in the Spotlight
Diamondback Energy is a well-known pure-play Permian player. In the first quarter of this year, the company's oil production was responsible for more than 50% of total volumes, while the rest was natural gas and natural gas liquids. FANG, sporting a Zacks Rank #1 (Strong Buy), is well-positioned to capitalize on rising oil prices and increasing gas production.
ExxonMobil, with a Zacks Rank of 1, has a strong footprint in the Permian and is among the advantageous assets that the energy major believes will contribute to its long-term production growth. In the Permian, the integrated giant has been employing lightweight proppant technology and hence has been capable of boosting its well recoveries by up to as much as 20%. Production of liquids by XOM in the first quarter of 2026 accounted for more than 70% of total volumes, while the rest was natural gas. Thus, like FANG, XOM is also in a sweet spot now. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chevron also has a strong footprint in the Permian. CVX mentioned that it has an interest in one of every five wells in the most prolific basin. Over the years, while growing its operations in Permian, Zacks #1 Ranked CVX has been able to generate more production while employing lower capital spending, thanks to advanced drilling techniques. Being a producer of both oil and natural gas, the company is well-positioned to gain.