Permian Basin Shifts to Delaware Sub-Basin, Boosting Gas Production
Drilling activity in the Permian Basin is increasingly focused on the Delaware sub-basin, a trend expected to drive growth in natural gas production. Despite historical challenges, operators are finding the Delaware’s extensive undeveloped acreage and evolving market dynamics attractive. The U.S. Energy Information Administration (EIA) currently has access to well-level data, including over 22,000 well logs, from the Permian Basin, aiding in the analysis of these shifts .
Delaware Basin Gains Prominence
Historically, the Midland Basin has been the preferred area for exploration and production (E&P) within the Permian. But, the Delaware Basin is gaining ground, accounting for nearly 58% of total Permian Basin rig activity in 2025, up from 51% in 2021 . Ten years ago, the Delaware represented only 45% of Permian rigs . This shift is driven by the Delaware’s larger undeveloped acreage, offering more potential for growth compared to the more mature Midland Basin.
Several factors previously hindered development in the Delaware. Federal lands in New Mexico present more permitting hurdles than those in West Texas. Delaware benches historically had higher gas content, less desirable when producers prioritized liquids. The gas also often contains higher levels of sulfur and carbon dioxide, requiring additional treatment before pipeline transport.
Infrastructure Investments Fuel Growth
The move towards the Delaware Basin is prompting significant investment in new gas pipeline infrastructure. Several projects are underway to increase gas takeaway capacity, including WhiteWater’s Blackcomb Pipeline (+2.5 Bcf/d), Eiger Express (+3.7 Bcf/d) and Energy Transfer’s Hugh Brinson Pipeline (+1.5 Bcf/d) and Desert Southwest (+2.3 Bcf/d) . Over 10 Bcf/d of new Permian gas egress is anticipated by 2030, which is expected to strengthen Waha prices as takeaway constraints are eased.
Impact on Gas and Oil Production
Gas-to-oil ratios (GOR) are rising in the Permian Basin, with the migration to the Delaware being a key contributor. Delaware wells generally produce more gas than those in the Midland . While Permian crude oil production is forecast to remain relatively flat through 2030, robust growth is expected in gas and NGLs.
Current Market Conditions
As of February 14, 2026, the U.S. Rig count remained flat at 513. The Permian Basin saw a decrease of 3 rigs, while the ArkLaTex, Anadarko, and DJ basins gained rigs . U.S. Natural gas volumes in pipeline samples averaged 82.3 Bcf/d for the week ending February 22, remaining consistent week-over-week.
Traders and analysts anticipate the EIA will report a 47 Bcf storage withdrawal for the week ending February 20. This draw would nearly eliminate the deficit to the 5-year average. The prompt-month futures price has fallen significantly in February, dropping from $4.37/MMBtu to $2.92 as the March contract nears expiration.
The Permian Basin, encompassing the Midland Basin, the Delaware Basin, and the Central Basin Platform, currently leads in oil production and ranks second in natural gas production .