Thursday, September 17th, 2026 and is filed under New Mexico Oil and Gas Investing, Oil and Gas Current Events, Permian Basin Oil News, Texas Oil and Gas Investing
Advances in drilling technology have transformed the Permian Basin from a mature oil-producing region into the most prolific oil field in the United States. Horizontal drilling, hydraulic fracturing, longer laterals, multi-well drilling pads, geosteering, and increasingly sophisticated data analysis have allowed operators to reach oil and natural gas resources that previous generations could not economically produce. The result has been a remarkable resurgence in one of America’s oldest oil-producing regions.
The Permian Basin stretches across West Texas and southeastern New Mexico and contains multiple oil- and natural gas-bearing formations stacked at different depths.
Oil production in the region dates back more than a century. For much of that Permian Basin oil history, operators relied primarily on vertical drilling. A conventional vertical well travels downward until it intersects a productive formation.
This approach successfully produced enormous quantities of oil, but it also had limitations. A vertical well may pass through only a relatively small section of an oil-bearing formation. That became particularly important as operators began targeting tight, low-permeability formations where oil does not flow through the rock as readily as it does in conventional reservoirs.
Operators needed a better way to access those resources.
The combination of horizontal drilling and hydraulic fracturing provided the breakthrough.
One of the most important advances in modern drilling technology was the ability to reliably steer a well underground.
Instead of drilling straight through a productive formation, operators can drill vertically to the desired depth and then gradually turn the wellbore until it travels horizontally through the targeted rock.
That allows a well to remain in contact with an oil-bearing formation for thousands of feet rather than simply passing through it vertically. The larger contact area can significantly increase the amount of oil and natural gas accessible from a single well.
Horizontal drilling had existed for decades, but its combination with other technological advances dramatically changed development in the Permian.
In 2004, vertical wells accounted for approximately 96% of crude oil production from Permian tight formations tracked by the U.S. Energy Information Administration (EIA). By 2018, vertical wells represented only about 7% of production from those formations.
That transition illustrates how dramatically drilling practices changed in a relatively short period.
Horizontal drilling solves only part of the challenge. The hydrocarbons still need a way to move from low-permeability rock into the well.
That’s where hydraulic fracturing became critical.
During hydraulic fracturing, fluid is pumped into the formation at high pressure to create small fractures in the surrounding rock. Proppant, typically sand, helps hold those fractures open so oil and natural gas can flow toward the wellbore.
When hydraulic fracturing is performed at multiple stages along a horizontal well, operators can access hydrocarbons across a much larger section of the reservoir.
The Permian’s Midland Basin provides a good example. The Spraberry and Wolfcamp formations had been developed using vertical wells for decades. Advances in horizontal drilling and hydraulic fracturing eventually made tighter intervals within these formations important targets for modern development.
The oil wasn’t suddenly appearing beneath West Texas.
Drilling technology had changed the industry’s ability to economically reach and produce it.
Once operators became proficient at horizontal drilling, the next challenge became extending the distance a well could travel within the productive formation.
The horizontal portion of a well is known as its lateral. Longer laterals expose the wellbore to more reservoir rock and can allow operators to access more hydrocarbons from a single well.
In 2010, the average horizontal length of a Permian well was less than 4,000 feet. By the first nine months of 2022, that average had increased to more than 10,000 feet.
And the technology has continued advancing.
According to EIA data released in August 2026, the average lateral length of a new Permian horizontal well reached 10,867 feet in 2025, an increase of approximately 77% from 2015.
That means the horizontal portion of an average new well now extends more than two miles underground.
One of the more recent developments in Permian drilling technology is the increasing use of super-lateral wells.
EIA classifies these as horizontal wells with laterals exceeding 15,000 feet.
Before 2020, such wells were virtually nonexistent in the Permian. By 2025, super-laterals represented approximately 15% of new horizontal well completions in the region. Meanwhile, short-reach wells with laterals of less than 5,000 feet fell from 43% of completions in 2015 to just 4% in 2025.
A 15,000-foot lateral extends nearly three miles underground.
Longer laterals can allow operators to contact substantially more reservoir rock without proportionately increasing the number of wells and associated surface infrastructure.
Modern Permian drilling has changed above ground as well.
Historically, developing multiple wells often required moving a drilling rig between separate locations. Modern multi-well pad drilling allows operators to drill several horizontal wells from one surface location.
Each well can travel underground in a different direction or target a different portion of the reservoir.
The scale of these operations has grown considerably. During the first half of 2021, approximately 25% of drilling pads in the Permian’s Midland and Delaware basins contained nine or more wells.
Multi-well pads allow drilling rigs, roads, pipelines, equipment, and other infrastructure to be used more efficiently while providing access to substantial underground acreage.
Drilling horizontally for two or three miles wouldn’t provide much benefit if operators couldn’t keep the well within the targeted formation.
Modern geosteering technology helps make that possible.
Downhole tools provide information about the well and surrounding geology while drilling is underway. Engineers and geologists can use that data to monitor the wellbore and adjust its direction as the drill bit moves through the formation.
This is especially important in the Permian because the basin contains numerous stacked formations that vary in depth, thickness, and reservoir characteristics.
The objective is no longer simply to drill a hole to a predetermined depth. Modern drilling technology allows operators to more precisely position a well within the portion of the formation they believe offers the greatest production potential.
Some of today’s most important drilling advancements don’t involve larger rigs or more powerful machinery. They involve information.
Modern drilling operations generate enormous amounts of data about the well, equipment, and surrounding geology. Operators can analyze drilling speed, pressure, vibration, formation characteristics, well placement, and equipment performance.
Combined with seismic analysis, geological modeling, and historical production data, this information can help operators make better decisions before and during drilling.
Artificial intelligence and advanced data analytics are adding another layer to this process. These technologies can help identify patterns across large datasets, improve subsurface interpretations, optimize drilling parameters, and support decisions about where and how wells should be developed.
Technology is therefore improving not only how operators drill, but also how they decide where to drill.
Perhaps the clearest evidence of the Permian’s technological transformation is its production growth.
Across the onshore Lower 48 states, tight oil production increased from approximately 800,000 barrels per day in 2010 to 8.9 million barrels per day in 2024. The Permian accounted for approximately 65% of that tight-oil production growth.
By 2025, Permian crude oil production reached approximately 6.6 million barrels per day. That figure represents the entire Permian region across West Texas and southeastern New Mexico, not Texas production alone.
Even more telling is what has happened to overall well productivity.
EIA reports that total Permian hydrocarbon production increased from approximately 2.9 million barrels of oil equivalent per day in 2015 to 11.2 million BOE/d in 2025, a 284% increase. Yet annual horizontal well completions have remained around 6,000 since 2022.
This demonstrates an important point about modern oil production:
More production doesn’t necessarily require proportionately more wells.
Longer laterals, better well placement, improved completion designs, and increasingly sophisticated drilling technology can allow each well to access substantially more reservoir rock.
The Permian Basin may be the most prominent example of how drilling technology has transformed U.S. oil production, but the same basic combination of horizontal drilling, hydraulic fracturing, longer laterals, and improved well-completion techniques is being used in other major producing regions.
North Dakota provides one of the clearest examples. The Bakken formation in the Williston Basin had been known to contain significant oil resources for decades, but production remained relatively modest until operators combined horizontal drilling with hydraulic fracturing. The results helped transform North Dakota into one of the country’s leading oil-producing states. EIA reports that horizontal wells accounted for nearly 90% of Bakken production as early as 2010, illustrating how quickly the technology changed development of the formation.
Oklahoma has experienced a similar technological shift. The Anadarko Basin has a long history of oil and natural gas production, but horizontal drilling helped open new development opportunities in areas such as the SCOOP (South Central Oklahoma Oil Province) and STACK (Sooner Trend Anadarko Canadian and Kingfisher) plays. EIA has also documented significant growth in Oklahoma shale production resulting from the combination of advanced horizontal drilling and hydraulic fracturing.
The trend extends well beyond these states. By 2021, 81% of new U.S. oil and natural gas well completions were horizontal or directional, compared with only 19% drilled vertically. More recently, horizontal wells accounted for approximately 94% of Lower 48 crude oil production in December 2024.
What operators have learned in the Permian, Bakken, Anadarko, and other producing regions continues to influence drilling across the country. Longer laterals, more precise well placement, improved hydraulic fracturing designs, and increasingly sophisticated data analysis allow producers to reach more reservoir rock and improve the productivity of individual wells.
The geology changes from one basin to another, but the underlying principle remains the same: advances in drilling technology can change which resources can be economically developed.
Technology alone doesn’t explain the Permian’s success.
The region benefits from an oil and gas ecosystem developed over generations. Operators have access to experienced workers, drilling contractors, service companies, pipelines, processing facilities, and other infrastructure needed to support large-scale development.
The Permian’s proximity to Gulf Coast refineries and export facilities provides another advantage. EIA has cited lower operating costs, access to oilfield services, and proximity to refining and export infrastructure among the factors contributing to the basin’s competitiveness.
It’s a powerful combination:
exceptional geology + advanced drilling technology + extensive energy infrastructure + generations of operating experience.
Together, those factors have helped make the Permian America’s dominant oil-producing region.
The evolution of the Permian Basin demonstrates how drilling technology can transform an established oil-producing region.
The Permian didn’t become important because oil was suddenly discovered there during the shale revolution. Producers had been drilling the region for generations.
What changed was their ability to access the resource.
Horizontal drilling allowed wells to remain within productive formations for thousands of feet. Hydraulic fracturing created pathways through low-permeability rock. Longer laterals increased reservoir contact. Multi-well pads allowed more resources to be reached from fewer surface locations. Geosteering and subsurface analysis improved well placement, while data analytics helped operators refine the entire process.
The rise of 15,000-foot-plus super-laterals demonstrates that this evolution is still underway.
For oil and gas investors, the history of the Permian offers an important lesson. Evaluating an oil and gas opportunity involves more than knowing hydrocarbons exist underground. The drilling technology, geological understanding, engineering expertise, and operational strategy used to develop those resources can be just as important.
The Permian Basin provides compelling evidence of what can happen when technology changes not what is underground, but what can economically be brought to the surface.
This is not an offer to sell nor solicitation of an offer to buy any security. Such offer may only be made by a written prospectus in a jurisdiction wherein the offering is duly registered or exempt therefrom. This content is provided for informational purposes only. Nothing herein shall be construed as tax, legal, or accounting advice. Investing in oil and gas is highly speculative and could result in substantial losses. There are no guarantees that any returns will be achieved. Potential investors should consult their attorney, accountant, and financial advisors before investing in oil and gas.
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