January’s US Oil Production Drops Big

By Ovi

All of the Crude plus Condensate (C + C) production data, oil, for the US state charts comes from the EIAʼs Petroleum Supply monthly PSM which provides updated information up to January 2025.

U.S. January oil production decreased by 305 kb/d to 13,146 kb/d, 158 kb/d lower than December 2023. The largest decreases came from Texas and New Mexico. December production was revised down from last month’s 13,491 kb/d to 13,451 kb/d a decrease of 40 kb/d. Production in February is expected to increase by 392 kb/d.

The dark blue graph, taken from the March 2025 STEO, is the forecast for U.S. oil production from February 2025 to December 2026. Output for December 2026 is expected to reach 13,698 kb/d. From February 2025 to December 2026 U.S. production is expected to grow by 160 kb/d, not much for almost two years.

The light blue graph is the STEO’s projection for output to December 2026 for the Onshore L48. January Onshore L48 production dropped by 324 kb/d to 10,913 kb/d. From February 2025 to December 2026, production is expected to increase by 203 kb/d to 11,440 kb/d. December 2026 production was revised up from 11,366 kb/d by 74 kb/d from last month. Note how production is essentially flat starting in mid 2025 to December 2026.

Why is January production down by 305 kb/d? Is it the weather or the low frac spread count? An estimate for the weather can be made. The weekly production data for the week of January 24 shows it was down by close to 300 kb/d. Let’s assume it was 400 kb/d for the whole week. That translates into a monthly drop of 90 kb/d. That implies that 200 kb/d of the January drop is associated with the low January frac spread count and possibly geology, i.e. fewer Tier 1 wells, dropping pressure and increasing GORs. It will take a few more months of production data to sort this out.

U.S. Oil Production Ranked by State

Listed above are the 12 US states with the largest oil production along with the Gulf of Mexico. Montana was added to this table a few months back since its production exceeded Louisiana’s production and we wish to keep tracking Louisiana.

These 12 states accounted for 84.7% of all U.S. oil production out of a total production of 13,146 kb/d in January 2025. On a MoM basis, January oil production in these 12 states dropped by 233 kb/d. On a YoY basis, US production increased by 560 kb/d with the biggest contributors being Texas and New Mexico.

State Oil Production Charts

According to the EIA, Texas production decreased by 105 kb/d in January to 5,584 kb/d and is 248 kb/d lower than October 2024. YoY production is up by 211 kb/d. Note that November production from last month was revised down by 33 kb/d from 5,801 kb/d to 5,768 kb/d and December was revised down by 34 kb/d from 5,723 kb/d to 5,689 kb/d.

Texas production has been dropping since October. The drop could be related to the drop in completions that started in October while the January drop could be a combination of cold weather and low completions. A few more months of data is required to see if Texas is nearing a production plateau and possible peak.

The red graph is a production projection using December and January Texas RRC data. Due to more production revisions than typical to earlier months in the January report, the projection is too optimistic by roughly 200 kb/d. However, note that both the projection and the EIA show production rolling over in October and dropping in January.

The blue graph shows the average number of weekly rigs reported for each month, shifted forward by 10 months. So the 276 rigs operating in July 2023 have been shifted forward to May 2024. From February 2024 to July 2024, the rig count dropped from 312 in time shifted February 2024 to 256 in July 2024. That drop of 56 rigs has had no impact on production up to August 2024 but November may be the first month when the rig drop impact on oil production is starting to show up.

According to the EIA, New Mexico’s December production dropped by 53 kb/d to 2,060 kb/d.

The blue graph is a production projection for Lea plus Eddy counties. These two counties account for close to 99% of New Mexico’s oil production. The difference between the December and January preliminary production data provided by the New Mexico Oil Conservation Division was used to make the projection. A 1% correction was added to the Lea plus Eddy production projection to account for their approximate fraction of New Mexico’s oil production.

The projection estimates January production was 31 kb/d lower than the EIA’s report. The decrease is related to January production decreases in both Eddy and Lea counties and is discussed further down in the Permian section.

More oil production information for a few New Mexico and Texas counties is reviewed in the special Permian section further down.

January’s output dropped by 9 kb/d to 1,172 kb/d. Production is down by 115 kb/d from the post pandemic peak of 1,287 kb/d. The North Dakota Department of Mineral resources reported January production was 1,173 kb/d.

According to this Article the Director of the North Dakota Department of Mineral Resources said “oil production is 6.6% above the revenue forecast but it is 1.7% down from December into January or roughly 20,000 barrels per day in the December to January decline. “We attribute that to a cold spell in mid-January and slightly less completions,” he said. He said he would expect February will have similar results due to very cold temperatures.”

“According to Anderson, the drilling rig count remains steady and is expected to remain at similar levels through 2025.

He said mergers and acquisitions continue to occur and it is expected integrations of these companies will occur in the coming year.

Currently, 12 frac crews are active in the state.”

Alaskaʼs January output rose by 7 kb/d to 441 kb/d while YoY production rose by 14 kb/d. The rise in production is an indication that production for the next few months will be on its regular plateau after summer maintenance. EIA’s average weekly January production for Alaska is almost the same at 440 kb/d.

Alaska has recently brought new fields online to consistently have YoY and monthly production gains which have broken away from the earlier dropping production trend red lines. According to this Article, first oil production begins at Nuna project in Alaska in December.

Nuna is expected to add 20,000 barrels of oil to the state’s overall oil production, at its peak production level.

Coloradoʼs January oil production decreased by 32 kb/d to 479 kb/d. Colorado began the year with 12 rigs. In December it had 7 in operation which dropped to 6 in January and February and to 5 in March. Is the dropping rig count beginning to show up in dropping oil production?

An aside: Did a search to find a reason for Colorado’s January oil production drop. Above is what the AI summary came up with. Beware of AI data/facts.

Oklahoma’s output in January dropped by 17 kb/d to 401 kb/d. Production remains below the post pandemic July 2020 high of 491 kb/d and is down by 51 kb/d since May 2023. Output entered a slow declining phase in June 2023.

At the end of October 2024 there were 40 operational rigs and they have held steady at 41 ±1 from October to December. In February 4 rigs were added to bring the total to 46 and an additional 4 were added in March to raise the count to 50. Will the increase in the rig count result in increasing oil production going forward? Maybe January was a cold weather related production drop.

California’s declining production trend continues. January production dropped by 3 kb/d to 265 kb/d.

Wyoming’s oil production has been rebounding since March 2023. However the rebound was impacted by the January 2024 storm. Production peaked in February 2024 and was showing signs of being on a plateau in mid year. January’s production dropped by 12 kb/d to 291 kb/d.

In August Wyoming had 8 operational rigs. The rig count has slowly risen to 14 from November to January and to 16 in March.

January’s production increased by 2 kb/d to 173 kb/d. Utah had 8 rigs operating from December through March.

January’s production increased by 2 kb/d to 173 kb/d. Utah had 8 rigs operating from October through March.

Ohio has been added to the Louisiana chart because Ohio’s production has been slowly increasing since October 2021 and passed Louisiana in November 2023.

Louisiana’s output entered a slow decline phase in October 2022 and continued to fall in January. January’s production dropped by 10 kb/d to 69 kb/d. As of all of 2025, there are no oil rigs operating in Louisiana. In November 2024, one rig was operating. Anybody have any thoughts on this and can it be confirmed?

Ohio’s January oil production was unchanged at 126 kb/d, a new record high, upwardly revised from 122 kb/d last month. The most recent Baker Hughes rig report shows one horizontal oil rigs operating in Ohio in December and January and two in February. In late March, 3 rigs were operational.

January’s oil production dropped by 1 kb/d to 78 kb/d. Montana had one oil rig operating from December through March.

GOM production dropped by 59 kb/d in January to 1,792 kb/d but is expected to rise in February to 1,865 kb/d.

The March 2025 STEO projection for the GOM output has been added to this chart. It projects production in December 2026 will be 68 kb/d lower than February 2025 at 1,797 kb/d.

According to the OPEC MOMR, GOM output is expected to be supported by new projects in the coming months, such as the deepwater Whale platform that started production in January.  

A Different Perspective on US Oil Production

Combined oil output for the Big Two states Texas and New Mexico.

January’s production in the Big Two states decreased by a combined 158 kb/d to 7,644 kb/d and is 300 kb/d lower than October 2024. Clearly these two states were the drivers of US oil production growth up to October 2024. Has the trend flipped?

Oil Production by The Rest

January’s oil production by The Rest dropped by 95 kb/d to 3,269 kb/d and is 176 kb/d lower than November 2023.

Permian Basin Report for Main Counties and Districts

This special monthly Permian section was added to the US report because of a range of views on whether Permian production will continue to grow or will peak over the next year or two. The issue was brought into focus recently by two Goehring and Rozencwajg Report and Report2 which indicated that a few of the biggest Permian oil producing counties were close to peaking or past peak. Also comments by posters on this site have similar beliefs from hands on experience.

This section will focus on the four largest oil producing counties in the Permian, Lea, Eddy, Midland and Martin. It will track the oil and natural gas production and the associated Gas Oil Ratio (GOR) on a monthly basis. The data is taken from the state’s government agencies for Texas and New Mexico. Typically the data for the latest two or three months is not complete and is revised upward as companies submit their updated information. Note the natural gas production shown in the charts that is used to calculate the GOR is the gas coming from both the gas and oil wells.

Of particular interest will be the charts which plot oil production vs GOR for a county to see if a particular characteristic develops that indicates the field is close to entering or in the bubble point phase. While the GOR metric is best suited for characterizing individual wells, counties with closely spaced horizontal wells may display a behaviour similar to individual wells due to pressure cross talking . For further information on the bubble point and GOR, there are a few good thoughts on the intricacies of the GOR in an earlier POB comment and here. Also check this EIA topic on GOR.

New Mexico Permian

The total rig count in Lea and Eddy counties in the week ending Mar 28 was 92 and is down 8 from the July 2024 count of 100.

Lea and Eddy county rigs have both stabilized in the 45 to 50 range over the last few months but are hinting at a slow decline.

Lea County’s oil production appears to have entered a plateau phase in May 2024 at 1,213 kb/d. December production saw a projected high of 1,221 kb/d followed by 55 kb/d drop in January to 1,166 kb/d. Preliminary January data from New Mexico’s Oil Conservation Division (OCD) indicates Lea County’s oil production decreased by 47 kb/d to 1,130 kb/d.

Production has been essentially flat since May 2024 as the rig count fell. While January shows a large production drop, it is not clear whether this drop is geology related, related to the low frac spread count that occurred in January or cold weather.

The blue graph shows the average number of weekly rigs operating during a given month as taken from the weekly rig chart. The rig graph has been shifted forward by 8 months. So the 64 Rigs/wk operating in August 2023 have been time shifted forward to April 2024 to show the possible correlation and time delay between rig count, completion and oil production.

Comparing the flattening oil production since May with the dropping time shifted rig count, indicates/implies the newer wells drilled since June had higher IPs to offset the decline associated with the fewer wells drilled by the declining rig count. The rising rig count starting in November 2024 may be able to slow the declining/flattening production in Lea County but the writing on the wall is saying that Lea County is close to peak production.

Note that rig counts are being used to project production as opposed to completions because very few extra DUCs are being completed at this time.

After much zigging and zagging, oil production in Lea county stabilized just below 1,100 kb/d in early 2023. Once production reached a new high in January 2023, production appeared to be on a plateau while the GOR started to increase rapidly to the right and entered the bubble point phase in July 2023.

Since July 2023 the Lea County production has continued to increase as the GOR remained within a second semi-bounded region. This may indicate that the recent additional production is coming from a new bench/field since the GOR’s behaviour since August 2023 to March 2024 time frame appears once again to be in a semi bounded GOR phase accompanied with rising production.

The GOR moved out of the second semi-bounded GOR region in April and hit a new high in May. Since July the GOR has bounced around 3.4. January saw a production drop as the GOR dropped slightly to 3.42.

This zigging and zagging GOR pattern within a semi-bounded GOR while oil production increases to some stable level and then moves out to a higher GOR to the right has shown up in a number of counties. See a few additional cases below.

January’s projected oil production dropped by 36 kb/d to 842 kb/d and is the second monthly production drop since rising steadily since June 2024.

Eddy County’s oil production first peaked in February 2024. After dropping for three months, the number of rigs and associated wells increased and so did oil production. From May to November, production rose from 739 kb/d to 900 kb/d, an increase of 161 kb/d, while essentially paralleling the increasing rig count. Over that same time shifted rig period, 14 to 15 rigs were added to Eddy County as production rose. Was a new Tier 1 region/shelf discovered to attract such a large increase in the rig count?

In November the projected oil production increased by 18 kb/d to a new high of 900 kb/d. This smaller increase relative to previous months also appears to reflect the production impact associated with the slowing increase in the rig count.

The blue graph shows the average number of weekly rigs operating during a given month as taken from the above weekly drilling chart. The rig graph has been shifted forward by 8 months to roughly coincide with the increase in the production graph starting in November 2023.

Clearly the production rise up to November 2024 is closely associated with the rise in the rig count and associated well completions delayed by roughly 8 months. The smaller November increase is the second clue that the production rise associated with increasing rigs is about to end. The flattening rig count starting in December 2024 implies that production in Eddy county may be heading into a short term plateau phase around 850 kb/d before starting to decrease.

The Eddy county GOR pattern is similar to Lea county except that Eddy broke out from the semi bounded range earlier and for a longer time and then added a second semi bounded GOR phase. For January New Mexico’s Oil Conservation Division (OCD) reported oil production decreased by 42 kb/d to 839 kb/d and stayed within the second semi-bounded region.

Note the big increase in the GOR from November to January. Interesting to see what February brings. 

Texas Permian

The Midland county rig count has been rising since July and is up 10 to 28 at the end of March. The opposite is true for Martin county. On March 28, 26 rigs were operational, down 19 from 45 in July 2023.

Since the end of October drilling in the Midland and Martin counties has been very steady between 26 and 28 rigs, respectively, except for January 31 when Martin dropped to 25.

Oil Production in Texas Counties

January’s projected production dropped 22 kb/d to 662 kb/d. December production of 684 kb/d may be slightly optimistic. Preliminary Texas January RRC production dropped 56 kb/d to 569 kb/d.

The orange and green graphs show the oil production for Midland County as reported by the Texas RRC for December and January. The red graph uses the December and January data to project production as it would look after being updated over many months.

Even though the rig count is dropping, I think the increase in the projected production after May is real based on the increasing preliminary production shown from June to October in the latest January RRC data. Flat October to December production is signalling an imminent production peak/plateau.

The blue graph shows the average number of weekly rigs operating during a given month as taken from the weekly drilling chart. The rig graph has been shifted forward by seven months. So the average 34.5 Rigs/wk operating in July 2023 have been moved forward to February 2024 to show the possible correlation and time delay between rig count, completions and oil production. If the seven month shift in the rig count is approximately correct in that oil production can be tied to the rig count, oil production in Midland county should increase starting in April for a month or two before resuming its decline. 

For January the GOR ratio increased to 4.30, a new high, while reported preliminary oil production dropped.

With Midland county into the bubble point phase, oil production and the GOR have stayed within a narrow range outside of the initial Semi-Bounded GOR region since March. January GOR broke to a new high and preliminary production came in at a new low since the July 2023 production high.

The oil production and GOR shown in this chart are based on the RRC’s January production report. Note that while the last few months are subject to revisions, the July 2023 to May 2024 production data has been steady for a number of months.

Martin county’s projected January oil production decreased by 10 kb/d to 752 kb/d. 

The orange and green graphs show the production for Martin County as reported by the Texas RRC for December and January. The blue chart shifts the rig count ahead by 6 months.

The red graph is a projection for oil production as it would look after being updated over many months. This projection is based on a methodology that uses preliminary December and January production data. The green graph shows oil production reported by the Texas RRC for January and it is slightly lower than December’s. Note how production has been in plateau phase from August to December before dropping in January.

Martin County’s projection is slightly optimistic due to production revisions back to November 2023 and is over projected somewhere between 25 kb/d and 50 kb/d.

My best guess for Martin County production is that it is on a plateau closer to 720 kb/d and on the verge of starting to decline. A note of caution here because the January drop could be related to a combination of the low January frac spread count and colder weather.

Martin county’s oil production after November 2022 increased and at the same time drifted to slightly higher GORs within the semi bounded range. However the June 2024 GOR saw its first move out of the semi bounded region. The preliminary Texas RRC’s January production for Martin county shows a decrease in both the GOR and oil production.

Martin county has the lowest semi-bounded GOR boundary of the four counties at a GOR of close to 2.60 but for January dropped slightly from 2.93 in December to 2.86. Nevertheless, it is clearly out of the semi-bounded region. Martin County has now entered the bubble point phase that should result in a dropping oil production trend.

This chart shows the total oil production from the four largest Permian counties. Assuming that current January Permian production is close to 6,400 kb/d, these four counties account for close to 54% of the total. The projection is slightly optimistic because both Martin and Midland county’s production was slightly optimistic. A more realistic projection would be closer to a plateau, possibly showing up next month.

The December and January initial production data is shown in the orange and green graphs respectively. The red graph uses the December and January data to project an estimate for the final January production. The January drop is related to the drop in all four counties. 

The projection indicates that January production from these four counties decreased by 129 kb/d to 3,423 kb/d. The combined preliminary January production data is lower than December’s by 189 kb/d to 3,136 kb/d and implies the January decrease is real. Again, the January drop could be related to the January low frac spread count and cold weather.

These charts and those below lend credence to what is being reported in this Article. “U.S. oil producers are grappling with geological limits to production growth as the country’s top oilfield ages and produces more water and gas and less oil – and may be nearing peak output.”

“Relentless drilling to reach record production has exhausted the core of the Permian’s two largest sub-basins: nearly two-thirds of the Midland formation’s core has been drilled, and slightly more than half in the Delaware formation, according to data from analytics software company Novi Labs.

“We’ve never been in a position before where we were on the back-half of the inventory story of the Permian basin,” Novi Labs head of research Brandon Myers said.

That has rung alarm bells across the industry, as drilling in the fringes of the basin, on lower-quality prospects, means less oil output and more water and gas. At conferences and on earnings calls, analysts and executives are discussing the issue with a growing sense of urgency.”

Findings

– The January production data was in good general and most of the projections are reasonable with only a few being slightly optimistic. Of all of the production charts above and below, only one is showing a production increase for January. In general all of the four county production charts are in a plateau phase. Taking into consideration that the price of WTI is stuck close to $70/b, the rig count is holding steady around 445 and the continuing lower frac spread count and the plateauing of the four biggest counties, taken all together all point to peak production in the onshore lower 48 within the next six months.

– Lea county may have entered a plateau phase in May 2024. While oil production is not following the rig count graph directly, the dropping rig count is resulting in Lea production currently being on a plateau. The January production drop could be a combination of low completions associated with the low January frac spread count and cold weather.

– Eddy County’s oil production initially peaked in February 2024. It started a new increasing phase in June as it followed the uptrend in the rig count and exceeded its previous February peak. Production peaked in November 2024 and is now in decline and possibly heading into a lower production plateau phase.

– Midland county peaked in July 2023 and has roughly followed the declining rig count graph up to May 2024. It appears to have started a new increasing phase in June 2024 and entered a plateau phase in October.

– Martin County may have peaked in August 2024 and may have entered a plateau phase. The January production revisions have created an over optimistic production profile. Regardless Martin county has been on a plateau closer to 720 kb/d for the last six months.

– All four of the largest Permian oil producing counties are now in their plateau phase with all four hinting that the decline phase is close at hand. Need a few more months of data to clarify the future growth/decline trend of these four counties.

Texas District 8

The large number of small revisions to the previous months in the January report has made the production increase in District 8 slightly optimistic. This optimistic increase hopefully will be corrected in the next report. Regardless a portion of the increase is real and the January drop is real. Note how the preliminary January 2025 production is lower than December’s.

Texas District 8 contains 20 counties. Of the 20, five are reviewed in this post, Midland, Martin, Loving, Reeves and Howard. From January 2024 to December 2024, production in District 8 increased by 431 kb/d. Of the 431 kb/d increase, those five counties accounted for 280 kb/d or 65%.

While the revisions in the production chart affect the projection, it does not affect the GOR.

Plotting an oil production vs GOR graph for a district may be a bit of a stretch. Regardless here it is and it seems to indicate many District 8 counties may well be into the bubble point phase. The GOR continues to increase and reached another new high of 4.49. This is another indicator that implies District 8 has passed peak production.

Oil Production and GOR Charts for a number of Larger Texas Oil Producing Counties

Below are the next five top oil producing counties in Texas.

January oil production for Reeves county indicates that production has continued to drop since November and may have peaked in October. The GOR chart indicates that Reeves County entered the bubble point phase in December and production is starting to fall.

Loving county production has peaked and is supported by the steadily increasing GOR.

Upton county production has followed the rig count graph since January 2024 and may have peaked in September. January saw a large drop in the preliminary production and the GOR may be on the verge of clearly moving out to the semi-bounded GOR region. Revisions to production from earlier months are making the forecast slightly optimistic.

The rig graph in the oil production chart has been shifted forward by six months.

Howard county peaked in July 2023 at 420 kb/d. Note the rapid movement of the GOR to higher ratios once it broke out of the Semi-Bounded GOR range. While the GOR has risen to new highs, production has kept on falling. However the production rise shown after July in the projection graph may be overdone.

Reagan county has oil wells with a very high a GOR. The production chart indicate that oil production has been falling since September along with an increasing GOR, an indication that Reagan county could be gassing out.

Starting in March 2024, output increased by 72 kb/d to a peak of 226 kb/d in September 2024. At the same time the GOR fell to a new low of 5.98. These new wells must have had a very low GOR to drop the average GOR from 7.48 to 5.98. After the September production peak, the GOR began to rapidly increase to the current level as production fell.

Drilling Productivity Report

The Drilling Productivity Report (DPR) uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil wells to provide estimated changes in oil production for the principal tight oil regions. The new DPR report in the STEO provides production up to February 2025. The report also projects output to December 2026. The DUC charts and Drilled Wells charts are also updated to February 2025.

The oil production for the 5 DPR regions tracked by the EIA’s STEO is shown above up to February 2025. Also the March 2025 STEO projects production out to December 2026, red markers.  Note DPR production includes both LTO oil and oil from conventional wells. DPR oil production for the Anadarko and Niobrara regions is no longer available.

The February oil output in the five DPR regions increased by 99 kb/d to 9,029 kb/d. Production is expected to rise by 54 kb/d in March to 9,083 kb/d. Note the sharp production rise of 320 kb/d from April 2025 to June 2025. After that, production growth slows. Considering the flat rig count and low completion rate, it is not clear why production should rise over this period.

The EIA’s March STEO/DPR report shows Permian output in February decreased by 57 kb/d to 6,508 kb/d. From March 2025 to December 2026 output is expected to rise by 278 kb/d to 6,851 kb/d. Also note how production rises by 269 kb/d from April to June 2025 and then the production growth rate slows.

Production from new wells and legacy decline, right scale, have been added to this chart to show the difference between new production and legacy decline. Notice the steady decline in new well production over the past eight months.

Output in the Eagle Ford basin had been increasing since January 2024 and appears to have peaked in August 2024 and then dropped every month until January 2025. February production increased by 35 kb/d to 1,092 kb/d. March 2025 production is forecast to increase by 2 kb/d to 1,094 kb/d.

Production over the next two years is expected to peak in September 2026 at 1,193 kb/d. Output in December 2026 expected to be 1,181 kb/d.

The DPR/STEO reported that Bakken output in February rose by 8 kb/d to 1,228 kb/d. The STEO/DPR projection, red markers, shows output to be essentially in decline after July 2025, dropping to 1,169 kb/d in December 2026.

This chart plots the combined production from the three main LTO regions. For February output rose by 100 kb/d to 8,828 kb/d. Production for December 2026 is forecast to be 9,201 kb/d.

DUCs and Drilled Wells

The number of DUCs available for completion in the Permian and the three major DPR regions has fallen every month since July 2020 to December 2024. February DUCs rose by 14 to 1,550. In the Permian, the DUC count increased by 18 to 937.

In the three primary regions, 623 wells were completed and 637 were drilled, increasing the DUC count by 14 as reported above.

In the Permian, the monthly completion and drilling rates have been both stabilizing in the 440 to 460 range over the last 6 months.

In February 2024, 443 wells were completed while 461 new wells were drilled. This is the sixth month in a row in which the number of wells drilled exceeded the number of completed wells.