Wooden Mackenzie (WoodMac) recognized a number of “key themes shaping the U.S. Decrease 48 panorama” subsequent yr in a press release despatched to Rigzone not too long ago.
Amongst these was a projection that the horizontal rig rely will fall under 500.
“Oil targeted exercise ranges will decline as operators face macro headwinds, significantly in H1 2026,” WoodMac mentioned within the assertion.
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“This sits under the $60 per barrel threshold that sparks questions round funding technique,” it added.
WoodMac mentioned within the assertion, nonetheless, that declining rig rely is not the needle mover it as soon as was.
“Main strides in operational effectivity have decreased the variety of energetic rigs required to take care of base enterprise,” the corporate said.
“Operators are drilling sooner, and cycle instances are enhancing,” it added.
WoodMac went on to notice within the assertion that “the exercise taper will create deflationary pressures on prices”.
“Wooden Mackenzie expects to see a modest discount in drilling and completion prices throughout the Decrease 48 in 2026, together with tariffs,” it mentioned.
“Decrease prices assist shield a lot of the new drill provide curve. Even at $60 per barrel Brent, greater than 90 % of U.S. Decrease 48 property can cowl their capex necessities, with all property overlaying working prices,” it continued.
One other theme was a projection that core Permian performs produce greater than 50 % of U.S. onshore liquids subsequent yr.
“Decrease 48 oil manufacturing will stall in 2026 for the primary time because the pandemic,” WoodMac warned.
“Rigs falling all through 2025 and fewer exercise within the yr create this fruits. The Permian stays resilient and the powerhouse of U.S. oil provide,” it added.
“Mixed 2026 manufacturing from the Delaware Wolfcamp, Bone Spring, Midland Wolfcamp, and Midland Spraberry will account for greater than 50 % of onshore U.S. oil output for the primary time ever,” it continued.
“Delaware Wolfcamp oil will plateau for the primary time post-pandemic, however related fuel manufacturing from the play will prime 10 billion cubic ft per day in 2026. Rising gas-oil-ratios and improvement shifting to gassier areas of the basin drive fuel quantity development,” WoodMac went on to state.
One other theme was that the mergers and acquisitions market will “reorient… itself with gas-weighted offers”.
WoodMac famous within the assertion that U.S. Decrease 48 deal move was lackluster within the first half of this yr however accelerated within the fourth quarter.
“Momentum will proceed, particularly with gas-focused offers,” WoodMac mentioned.
“Worldwide gamers are U.S. fuel property for 3 core causes: a price thesis on rising home demand, bodily hedges towards LNG export volumes, and instruments to assist progress U.S. commerce negotiations,” it added.
The assertion went on to venture that “step-outs evolve into extra essential provide areas”.
“2026 will likely be an essential yr in appraisal supply as operators goal rising appraisal areas to construct stock for long-term commitments to energy or LNG finish markets,” WoodMac famous within the assertion.
“Areas ripe for elevated exercise embrace Western Haynesville, southwest Eagle Ford, deep Pennsylvania Utica and numerous Rockies fuel performs,” it added.
WoodMac summarized in its assertion that its newest outlook “signifies the U.S. Decrease 48 will expertise a story of two commodities subsequent yr”.
“Oil targeted areas will face worth headwinds and see much less exercise. Liquids manufacturing will fall versus 2025. However fuel targeted areas are positioned for development, pushed by surging demand from the subsequent wave of LNG tasks and energy buildout,” it added.
Rigzone has contacted business physique the American Petroleum Institute (API) and the U.S. Division of Power (DOE) for touch upon WoodMac’s assertion. On the time of writing, neither have responded to Rigzone.
In its newest quick time period vitality outlook (STEO), which was launched on November 12, the U.S. Power Data Administration (EIA) projected that Decrease 48 states, excluding the Gulf of America, will produce 11.26 million barrels of crude oil per day, together with lease condensate, in 2025. The EIA forecasts in its report that this determine will drop to 11.13 million barrels per day in 2026. In its report, the EIA highlighted that this determine stood at 11.03 million barrels per day in 2024.
To contact the writer, e-mail andreas.exarheas@rigzone.com
