“As U.S. oil prices dropped below $60 a barrel in recent months, the industry shed rigs by the dozens and laid off crews that frack wells. Yet, the country’s wells last year gushed a record 13.6 million barrels of crude on average each day—100,000 barrels more than the Energy Information Administration, the federal forecaster, had anticipated before President Trump’s inauguration. The disconnect between slackening activity and the increasing yield has mystified even oil chieftains…

Executives credit the outperformance in part to companies’ engineering prowess and the changing makeup of the industry. Oil giants now have a bigger share of crude production in their hands and are largely impervious to price swings, ensuring a steady output. Among other field enhancements, these companies now routinely drill wells that extend over 4 miles and allow them to collect more crude at a lower cost…

One explanation for the basin’s resilience is that the unruly, debt-fueled frackers that would retreat when prices fell have died off. They have given way to giants armed with sturdy balance sheets that can better weather price shocks. The Permian has seen a consolidation frenzy valued at more than $125 billion since 2020. As a result, drillers such as Exxon Mobil, Chevron, ConocoPhillips, Diamondback and Occidental Petroleum now largely dictate the pace of production there.

In an effort to trim costs, these companies have been deploying drilling and pumping innovations across their respective empires. For instance, Chevron in 2019 ran 21 rigs and five frack crews in the Permian. This year it anticipates it will need only six rigs and two frack crews to produce about 67% more oil-and-gas in the region than seven years ago.

Each rig on average drills 1,500 feet a day, which is more than twice as much as in 2019.

Chevron and others are also trying their hand at drilling horizontal wells that extend out 2 miles, make a 180-degree turn and extend for another 2 miles in a U shape. This allows them to extract more crude from smaller pieces of land where they can’t drill one long lateral section.”

From the Wall Street Journal.