EIA says declining rig counts could lead to drop in production in 2027

U.S. Energy Information Administration said continued decline in rig counts could lead to a drop in production in 2027 of about 2 percent.  In the March issue of its short-term energy outlook, EIA said Texas produced nearly half (6.6 million barrels a day) of the nation’s 13.6 million barrels a day of crude oil in 2025.  The record production came despite operators having drilled fewer new wells, analysts said, because of the state’s geological makeup, a network of pipelines and transportation, and the ability to work on multiple production sites in less time.

Ed Longanecker, president of Texas Independent Producers and Royalty Owners Association, told the Texas Tribune, “Depressed rig counts raise legitimate concerns about future production sustainability.  If the trend continues without offset, operators risk slower inventory replacement and a potential plateau or gradual decline in output over the medium term, particularly if new drilling fails to keep pace with natural decline rates in existing wells.”