New well permit activity in the Permian Basin is showing signs of a notable pullback in 2025. After several years of strong growth, early indicators point to a more cautious stance from operators heading into the second half of the year.
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📉 Permit Totals Down 16% Year-over-Year
From January to June 2025, new well permits in the Permian totaled approximately 3,828, based on daily activity and forecasted June completions. That’s a 15.9% decline compared to the same period in 2024, which recorded 4,551 permits.
This drop suggests a softening of drilling appetite, especially as operators balance shareholder returns, capital discipline, and ongoing oil price volatility.
Period New Well Permits Jan–June 2024 4,551 Jan–June 2025 3,828 (incl. forecast) Change –15.9%
🛠️ Rig Activity Also Contracting
Several major Permian operators have already announced rig reductions or more selective drilling programs in 2025. While some companies continue to operate at scale, others are cutting back in response to market headwinds:
Company 2025 Permian Rig Activity Summary ExxonMobil (XTO) Largest Permian operator (post-Pioneer merger); no rig cuts announced — continuing to invest through the cycle. Diamondback Reducing from 15 to ~12 rigs (–20%); also cutting one full-time frac crew. Permian Resources Minor activity reduction; fewer well completions planned due to capex discipline. Coterra Energy Scaling down from 13 rigs in Q1 to 7 rigs in 2H 2025 (–30%); driven by oil price pressure. Devon Energy Operating ~23 rigs and 6 frac crews in Q1; maintaining activity through efficiency gains, no major cuts. EOG Resources Pulling back slightly: ~25 fewer wells planned in 2025 (–15 Delaware, –10 Eagle Ford); suggests minor rig utilization drop.
🔍 What’s Driving the Slowdown?
- Oil price uncertainty: Crude prices have softened from 2023 highs, leading to tighter drilling budgets.
- Capital discipline: Many operators continue to prioritize free cash flow and investor returns over production growth.
- M&A transitions: Major mergers (e.g., ExxonMobil–Pioneer, Diamondback–Endeavor) often lead to temporary pauses or rationalization of drilling programs.
- Efficiency gains: Companies like Devon and Exxon are drilling more efficiently, reducing the number of rigs needed to meet production goals.
⚙️ Outlook
While the Permian remains the engine of U.S. oil production, the data signals a measured pullback in 2025. The slowdown is not a collapse — but a recalibration. Investors, service companies, and mineral owners should watch closely for activity shifts, particularly in the Delaware and Midland sub-basins.
