The Permian Basin remains a key driver of opportunity in the Oil/Energy sector. Its steady production growth, combined with operational efficiencies and strategic importance, presents a strong investment case. Companies with a focus on the Permian, such as EOG Resources EOG, Diamondback Energy FANG, ExxonMobil XOM, and Chevron CVX, are well-positioned to deliver substantial value in the years ahead, making them worthy of close investor attention.

Permian Basin: A Key Growth Driver for Energy Investors

The Permian Basin is the epicenter of opportunity for oil and gas investors. As the top oil-producing region in the United States, its production growth and future potential are unmatched. Goldman Sachs projects Permian oil production to increase by 270,000 barrels per day (bpd) by 2026, building on a solid 520,000 bpd growth in 2023. Although geological factors may temper this rise, the Permian — with its substantial output — will remain a critical force in stabilizing global oil prices.

Additionally, the Energy Information Administration (‘EIA’) forecasts U.S. crude oil production, led by the Permian, to reach 13.2 million bpd in 2024 and 13.7 million bpd in 2025. With Permian output set to grow by 430,000 bpd this year from 2023 and an additional 300,000 bpd in 2025, the region will account for nearly half of the nation’s oil supply, solidifying its role in the energy market.

The Permian’s growth is not just about volume but also efficiency. Rig productivity has hit new records, and its strategic proximity to Gulf Coast refineries and export terminals enhances its appeal. With strong infrastructure in place and continued improvements, the Permian Basin is poised for sustained growth in the years to come.

Stocks to Watch

EOG Resources, ExxonMobil, Diamondback Energy and Chevron are some of the key players to watch. These companies have extensive operations in the Permian and are well-equipped to capitalize on its potential. 

EOG Resources is a leading player in the Permian Basin, leveraging its extensive acreage in the prime Northern Delaware region. The company excels in cost control and technological innovation, such as Super Zipper fracs, enhancing operational efficiencies. With a strong focus on maximizing returns through strategic investments and partnerships, EOG continues to drive significant growth and value in the region.

ExxonMobil has significantly expanded its operations in the Permian Basin, doubling its production volume since 2019. The company’s investments in the region are a testament to its commitment to boosting output and profitability. To strengthen its presence in the Permian further, ExxonMobil recently paid a staggering $59.5 billion to buy Pioneer Natural Resources.

Midland, TX-headquartered Diamondback Energy is an independent oil and gas exploration & production company, with its primary focus on the Permian Basin, where it has more than 490,000 net acres. Its activities are concentrated in the Wolfcamp, Spraberry and Bone Spring formations. By leveraging prime acreage, innovative technologies, and strategic mergers, Diamondback enhances its operational efficiencies and economies of scale.

Chevron‘s expanding asset base in the Permian Basin sets the company up for significant production gains. In Q4 2024, Chevron expects to produce roughly 940,000 barrels of oil per day in the Permian, with full-year growth reaching 15%. This production boost highlights Chevron’s efficiency in leveraging its massive reserves.