According to Permian Basin Oil & Gas Magazine, Permian Resources is forecasting oil production of up to 192,000 barrels per day in 2026, backed by a $1.75 billion to $1.95 billion capital program that will drill approximately 250 gross wells across the basin.
The Midland-based operator produced 401,500 barrels of oil equivalent per day in the fourth quarter of 2025, with oil production hitting 188,633 barrels per day. For 2026, the company is targeting total production of 400,000 to 430,000 barrels of oil equivalent daily while maintaining cost discipline at around $700 per foot, down 14% from 2024 levels.
Background
Permian Resources has positioned itself as the second-largest Permian Basin pure-play exploration and production company, controlling approximately 480,000 net acres across west Texas and southeastern New Mexico. The company’s 2026 drilling program will focus 65% of activity in New Mexico, 30% in Texas, and 5% in the Midland Basin.
During 2025, the company completed roughly $1.1 billion in acquisitions, adding 30,000 net acres and 19,000 net royalty acres through 700 separate transactions. Co-CEO James Walter emphasized the company’s financial strength, noting they have capacity to spend up to $3 billion on additional deals through 2027 without significantly increasing debt.
Analysis
Permian Resources’ aggressive 2026 program reflects broader industry confidence in sustained oil demand and price stability. The company’s ability to reduce drilling costs by 14% while maintaining production growth demonstrates operational efficiency that many operators are now demanding from their service providers.
The geographic distribution of drilling activity is particularly telling. The heavy weighting toward New Mexico (65% of activity) aligns with the Delaware Basin’s continued emergence as the most economic drilling area in the Permian. This shift has implications for service companies, as New Mexico operations often require different regulatory compliance, workforce logistics, and equipment positioning compared to traditional Texas-focused programs.
The company’s $1.1 billion acquisition spree in 2025, completed through 700 separate transactions, highlights the ongoing consolidation trend in the Permian. This consolidation typically leads to more streamlined operations and longer-term service contracts as larger operators standardize their vendor networks and operational procedures.
Most significantly for service providers, Permian Resources’ financial capacity to spend an additional $3 billion on acquisitions through 2027 suggests this drilling tempo is sustainable. The company’s “all-of-the-above” capital allocation strategy indicates they’re not just focused on organic drilling but also on bolt-on acquisitions that could accelerate activity levels.
What It Means for Subcontractors
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Sustained drilling demand: A 250-well program represents consistent work for drilling contractors, completion crews, and trucking companies throughout 2026, with potential for extension if acquisition activity continues
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New Mexico focus creates opportunities: Companies with New Mexico operating permits and regulatory expertise will be positioned for 65% of Permian Resources’ activity, while Texas-focused contractors may need to expand their geographic footprint
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Cost discipline remains critical: The 14% cost reduction year-over-year signals that operators continue pressuring service rates, requiring contractors to maintain operational efficiency and competitive pricing
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Standardization advantages: As consolidation continues, contractors who can meet the operational standards and safety requirements of large independents like Permian Resources will likely secure longer-term contract opportunities
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Infrastructure and logistics demand: The company’s multi-billion dollar acquisition capacity suggests continued need for pipeline construction, facility installation, and specialized transportation services to support expanded operations
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Workforce planning opportunity: The predictable 250-well program allows contractors to plan staffing and equipment deployment more effectively than the boom-bust cycles of smaller operators
