West Texas, the heart of U.S. shale oil production, is experiencing a significant pullback in drilling activity. According to our analysis, 24 drilling rigs that were active in the Midland region during 2024 have not returned to drill in 2025 — a clear signal that the slowdown is real and gaining momentum.
This localized drop mirrors national trends. U.S. drilling activity has been on a steady decline throughout 2025, with the Baker Hughes rig count falling for the 11th consecutive week — the longest losing streak since the early pandemic-era collapse in 2020. For the week ending June 28, 2025, the total U.S. rig count dropped to 547, down 6% year-over-year.
West Texas by the Numbers
- The Midland Region saw a net reduction of 24 rigs compared to 2024.
- Rigs that drilled in 2024 but have not returned in 2025 include top contractors such as:
- Patterson-UTI
- Helmerich & Payne
- Nabors Drilling
- Operators such as EOG Resources, ConocoPhillips, and Diamondback Energy are among those with fewer active rigs in the area this year.
Report: List of the 24 Racked Rigs
What’s Driving the Decline?
Several converging pressures have cooled the pace of drilling:
- Commodity Price Volatility: Oil prices have remained softer than expected, especially after 2024’s highs failed to hold.
- Rising Service Costs: Inflation and supply chain pressures continue to push up the cost of drilling and completions.
- Capital Discipline: Investors are rewarding companies that prioritize returns and free cash flow over aggressive growth. Many operators are reallocating capital to dividends, share buybacks, or debt reduction.
- Efficiency Gains: Improvements in well productivity mean companies can maintain output with fewer rigs.
Impacts on the Permian Basin
The Permian Basin, which includes the Midland sub-basin in West Texas, remains the most active U.S. basin — but even here, drilling activity has dipped:
- Multiple Baker Hughes reports have noted new lows in the Permian rig count, aligning with company-level announcements of reduced capital spending.
- Oklahoma and Eagle Ford are also seeing softness, though Oklahoma remains slightly ahead of 2024 levels.
Outlook for the Rest of 2025
Unless oil prices stage a sustained rally, the remainder of 2025 may see continued moderation in rig activity. Many analysts now expect a slow rebound in drilling toward late 2025 or early 2026, depending on OPEC policy, global demand, and the inflationary environment.
📌 Bottom Line:
West Texas is not immune to the broader U.S. shale slowdown. With 24 fewer rigs active in the region this year, it’s clear that operators are scaling back and prioritizing cost control. The Permian remains resilient, but not invincible.
