As both sub-basins in the Permian begin their slow decent in crude and condensate production (C+C) the shift in focus turns to associated gas from tight oil wells and high initial GOR areas for "gas well" gas. The Permian needs to deliver approximately 13 more BCFGPD by 2032 to meet rising electricity needs associated with artificial intelligence data centers and to supply gas to $72 B of proposed LNG facilities along the Texas and Louisiana Gulf Coasts.

We've shown you clearly the past 14 months that well productivity (defined by estimated ultimate recoveries, or EURs) is declining now in both sub-basins, the Midland and the Delaware. Wells are not as good as they use to be, even drilling longer laterals. Again, good is not defined by upfront cash flow but by ultimate recovery. This is true for oil and associated gas.

Novi Labs in Austin suggests this declining well productivity is related to over-drilling sweet spots on too close a spacing between wells, corresponding parent/child interference... that Novi calls reservoir "degradation" and that I call pressure depletion, short for depletion.

In this thread we will explore whether the Permian can deliver the gas molecules for AI and LNG, and still keep America supplied with affordable natural gas to stay warm in the winter and maintain our energy advantage with the rest of the world with regard to manufacturing goods and services.

Don't forget a couple of important facts before we start, please:

• Both sub-basins in the Permian are already stuffed with 59,000 HZ wells (Dec. 2025), active and inactive, some of which are spaced as closed together as 500 feet. 91% of all C+C and natural gas production in the Permian comes for core areas in just 8-9 partial counties. See below.

  
  

  

• Tight oil wells that make associated gas and high initial GOR tight oil wells that make "gas well" gas, also make produced water. In the Delaware Basin, lots of water. Oceans of it. Everything that happens going forward in the Permian will be negatively affected by where this produced can be re-injected and how much that will add to costs. Produced water is the biggest single factor affecting the future of the Permian.

• Natural gas prices are very weather related and very cyclic; some Permian gas gets sold on a Houston Ship Channel posting (-50 cents) to Henry Hub, a lot of it is sold (?) thru the WaHa Hub near Coyanosa that has been below zero most of 2025 (negative). Over-leveraged oversupply of gas from the U.S. is weakening the worldwide LNG market. Economics plays a primary role in associated gas production, same as oil production. The Permian shale sector is still deeply in debt.

  

• Finally, rising GOR, or the term, "gassier" does not necessarily translate to higher EURs. In boundary-defined solution gas driven shale, over-drilling and pressure depletion negatively affect associated gas too. We'll show you.