Permian Producers Are Tiptoeing Toward Output Growth

Permian Basin producers are taking baby steps toward growing oil output in response to higher prices.

Analysts at East Daley Analytics have updated their survey of Permian Basin operators and found responses point to a gain of about 217,000 barrels per day, or 3.2% growth, this year. That's up from 2.7% growth in East Daley's post-fourth-quarter 2025 earnings survey.

Analysts estimate Permian oil production will increase from an average of 6.82 million barrels per day in 2025 to approximately 7.05 million barrels per day this year.

ExxonMobil continues to be the growth engine for the region, with company officials saying they expect to grow Permian oil production by 11% in 2026, adding 108,000 barrels a day year over year. That represents about 44% of the basin-wide increase East Daley analysts captured in their survey. ExxonMobil is also the most active operator, running 34 rigs in late April — 26 in the Midland Basin and eight in the Delaware Basin.

Updated guidance from operators shows broader contributions from the next tier of producers, East Daley analysts report. They model Chevron as adding 5,000 barrels a day, or 2% growth, while Diamondback Energy raised its Permian growth guidance to 4.5% from 2.5%, which would add 27,000 barrels a day. Matador Resources increased its guidance to 3.5% growth from 2.5%.

East Daley analysts expect EOG Resources and Permian Resources to increase their 2026 production by 4%.

The company's survey was affected by several mergers since its last survey. Devon Energy and Coterra Energy completed their merger last month. Now operating as Devon, the combined company will report guidance later this month. In the interim, Devon reported first-quarter 2026 oil production at the high end of its guidance, prompting East Daley analysts to raise their outlook for the merged entity to 2% Permian growth.

Another newly merged company — SM Energy and Civitas Resources — completed its merger in January and first-quarter production came in higher than the expected guidance midpoint. Now operating under the SM ticker, the company is projecting 2% growth in 2026, including 11 months of production from Civitas.

Despite the higher growth estimate, East Daley analysts write, "the broader message has not changed: Permian growth is positive, but still highly concentrated in the hands of a few companies. Higher West Texas Intermediate prices could continue to move production expectations at the margin, but Permian operators are likely to remain disciplined until new gas pipelines create more room for growth in the back half of 2026."

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