As contradictory as it might seem, US oil output has continued to grow over the last several years, even as drilling in the shale plays has maintained a slow decline. This improbable dichotomy is a testimony to the industry’s technological prowess / Kurt Abraham, Editor-in-Chief, World Oil
It has been a frustrating year for US onshore operators. High operating costs, low oil prices and capital restraint have all contributed to a further slowing of activity over 2025, compared with a gradual decline in 2024. Onshore drilling for this year will total about 16,461 wells, down by 7.8% from last year’s 17,854 wells. Looking at the second half of 2025, the 8,065 onshore wells drilled will be down by 3.9% from the estimated 8,396 drilled in the first half.
Meanwhile, quite paradoxically, US oil production has continued to set records in 2025. The US produced an average of 13.235m b/d of oil in 2024, which was a new annual record. As of August 2025, that figure had gained another 559,000b/d, to 13.794m b/d. Gas has been no slouch, either, setting a record of 117.2bcf/d in August 2025.
So, you ask, “how can US oil and gas production have registered such impressive output gains during 2025, when the drilling rate nationwide has declined?” The simple answer is technology and smart thinking by operators. Continued improvement in technology available to producers has enabled massive efficiency gains in drilling, completions and production. And, as the US Energy Information Administration (EIA) has noted so accurately: “Operators have been focusing on the most productive plays, drilling longer lateral lengths to access more hydrocarbons, and using more efficient completion techniques to ensure economic viability.”
Permian Basin
Oil and gas development in the Permian Basin has been slower in 2025, yet significant numbers of wells have been drilled, driven by production and efficiency. World Oil estimates that 4,505 wells will have been drilled in the Texas portion of the Permian (Railroad Commission Districts 7C, 8 and 8a) during 2025, compared with 5,168 in 2024—a 12.8% decline. And second-half 2025 drilling has been 8.2% lower than first-half. Whether 2026 will be a better year for drilling will depend on oil prices. There was some hope for higher rates when OPEC+ met at the end of November 2025 to discuss freezing any more oil supply additions for a period of some months.
The oil production rate in the Permian Basin was approximately 6.3m b/d in late 2024 and early 2025. Since then, the EIA has projected the rate to rise to an average of 6.6m b/d over the course of 2025.
The EIA said that, between 2020 and 2024, total crude oil and lease condensate production in the US grew by 1.9m b/d, 93% of which was produced from just ten counties in Texas and New Mexico. Production from the rest of the US, including producing areas in offshore state or federal waters, grew by just 130,000b/d. The ten counties are all within the Permian, which underlies 66 counties in Texas and New Mexico.
Two of these counties, Lea and Eddy in New Mexico, accounted for nearly 1m b/d of US production growth (52%) between 2020 and 2024. Martin and Midland counties in Texas accounted for an additional 400,000b/d (21%). Six additional counties in Texas—Andrews, Glasscock, Howard, Loving, Reagan and Ward—grew a combined 360,000b/d (19%).
Marcellus/Utica shales
Gas development in the Marcellus shale in 2025 has been characterised by a modest increase in production, driven principally by new infrastructure (such as the Mountain Valley Pipeline), rising demand from LNG exports and datacentres, and operators maximising efficiency through longer well laterals. The Marcellus and Utica shales are predicted to see slight production growth in 2025 and 2026, compared with the high growth rates of the mid-2010s. The EIA forecasts total US dry gas production to resume modest growth in 2025, including important contributions from the Marcellus.
There is substantial new demand for gas-fired power plants to supply planned datacentres within and near the Marcellus-consuming region (mostly in Pennsylvania and Virginia). Despite generally lower rig counts compared with previous years, producers remain focused on efficiency. This includes drilling longer laterals to maximise gas production and improve economics.
Much like the Marcellus, gas development in the Utica shale is characterised by steady production, increased drilling efficiency through longer laterals and strategic positioning by operators for future demand growth, despite some pipeline constraints in the overall Appalachian region. Accordingly, World Oil expects the final drilling figure for the Northeastern region in 2025 to be 1,099 wells, up by 3.5% from 2024’s level. And even second-half drilling for 2025 is up 2% from the first half.
Bakken shale
Oil and gas development in the Bakken shale during 2025 has been typified by an overall slowdown in oil production and stable-to-slightly increasing gas output. These trends have been driven by lower oil prices, reduced drilling activity and a strategic shift by major operators towards more profitable basins such as the Permian.
After a slight increase late in 2024, North Dakota's oil production has been on pace during 2025 for an annual decline. Production levels in mid-2025 were around 1.1m b/d to 1.15m b/d, below 2024’s 1.194m b/d average. The EIA forecasts a slight rise in Bakken oil production at the end of 2025 before a potential decline in 2026.
Major companies such as ExxonMobil and Chevron have been divesting Bakken assets and redirecting capex to other areas, such as the Permian. This seems to indicate that they view the Bakken as a more mature play. Not surprisingly, World Oil estimates that drilling for 2025 will have totalled 1,048 wells, down 7.0% from 2024’s level. Comparing second-half drilling to the first half, the well total will be down 8.4%. The outlook for 2026 looks like a flat level of drilling.
Eagle Ford shale
During 2025, oil and gas development in the Eagle Ford shale of South Texas has resulted in relatively stable oil production, with output remaining around 1.1–1.16m b/d, with forecasts showing it staying flat through at least 2026. On the other hand, gas production is projected to increase due to higher LNG demand, with a final number of around 7bcf/d for 2025 expected.
Consolidation continues in the basin, and drilling activity has declined modestly as a result, with low oil prices not helping. World Oil estimates the total number of combined wells drilled over 2025 in Railroad Commission Districts 1, 2 and 4 will be 1,528, down by 3.3% from the 1,580 recorded in 2024. One can see some erosion when comparing second-half 2025 numbers with first-half figures. In these three districts, we expect second-half drilling to total 741 wells, down 5.8% from 787 wells in the first half. Again, as in the Permian, producers are hoping for better results in 2026, but the rate of drilling will depend on oil price movements.
Alaska
During 2025, Alaska’s upstream sector has seen multiple production gains, project milestones and policy shifts that define the state’s role in supporting US energy security. Crude oil output is projected to average around 422,000b/d for 2025, supported by new volumes from Santos and Repsol’s Pikka project and ConocoPhillips’ Nuna development. During 2026, the EIA projects that Alaskan oil production will jump by 13% (55,000b/d), to 477,000b/d.
Nuna came online at the end of 2024 and should peak at 20,000b/d. Development has been ongoing, with 29 wells planned in total and infrastructure connecting to existing processing facilities in the Kuparuk River Unit. The Pikka oil project is in the final stages of development, with first oil production expected in early 2026, some months ahead of earlier projections. The project’s Phase 1 is more than 95% finished as of late 2025, including pipeline installation and drilling of wells. Pikka should peak at 80,000b/d by mid-2026. These projects should help to counter natural decline and stabilise production.
ConocoPhillips’ Willow oil project remains a highlight for the northernmost state. It is in the development phase, with construction advancing and an expected startup in 2029. Although the Biden administration approved the project in March 2023, legal challenges have been underway ever since. A June 2025 ruling remanded approval back to the Bureau of Land Management to address procedural errors, but the project is allowed to continue construction. The project’s estimated cost has been raised to $9b. ConocoPhillips’ work includes the Willow Operations Center and a construction camp.
During 2025, the US Department of the Interior (DOI) opened additional acreage in the National Petroleum Reserve-Alaska by rescinding a previous rule that blocked drilling on 11m acres. This action reverses a Biden administration decision and opens up nearly half of the reserve to oil and gas leasing, totalling approximately 11.8m acres. The DOI also requested public nominations for areas within the reserve that should be made available for future leasing.
Despite all the development work, it looks like Alaska’s final drilling total will be 5.6% less for 2025 than in 2024. And drilling in second-half 2025 will be about 8% lower than in the first half. PE