(September 28, 2020)
Natural gas production in the Permian Basin and across Texas took a hit earlier this year due to the sharp downturn of oil prices and the economic crisis triggered by the pandemic. But experts believe oil and gas producers in western Texas will bounce back swiftly, resulting in record natural gas production in the Permian by late 2021.
A major factor in the decline of natural gas output was the drop in associated gas, which is produced as a by-product of oil drilling. According to energy analysis Firm Rystad, however, oil drilling will increase again throughout 2021. Provided the West Texas Intermediate (WTI) oil price remains at or above $45 per barrel, Rystad believes there will be sufficient drilling activity for the Permian to surpass its pre-pandemic levels of natural gas production.
By 2023, natural gas output in the Permian will reach 16 billion cubic feet per day, 2 billion cubic feet less than Rystad’s pre-pandemic prediction.