Permian Basin Drilling Trends 2026: What the Permit Data Shows

The Permian Basin remains the bellwether for US onshore drilling activity. When the Permian moves, the industry notices. And right now, the permit data is telling an interesting story.

We've analyzed drilling permit filings across the Delaware and Midland sub-basins through the first six weeks of 2026. What we're seeing isn't the boom-or-bust narrative that makes headlines—it's something more nuanced. A tale of divergence between operator classes, formation targeting shifts, and geographic concentration that has real implications for independents trying to plan their 2026 drilling program.

Let's break down what the numbers actually show.

Permit Activity Overview: The Big Picture

Through mid-February 2026, the Permian has seen approximately 1,847 drilling permits filed. That's tracking about 8% below the same period in 2025, but roughly flat compared to 2024. Context matters here—2025 was an unusually strong year driven by operators rushing to get ahead of anticipated regulatory changes that never materialized.

The Delaware continues to dominate permit activity, which shouldn't surprise anyone who's been watching the basin over the last three years. What's more interesting is the month-over-month trend: January started slow (down 12% YoY), but February has seen a significant uptick (up 6% YoY). Something changed after Q4 earnings calls.

Operator Analysis: The Tale of Two Strategies

This is where the data gets interesting. We're seeing a clear divergence between how the majors and large independents are behaving versus the smaller operators.

The Big Players: Measured Acceleration

ExxonMobil (post-Pioneer integration) and Chevron are both showing permit activity roughly 5-10% above their 2025 pace. This aligns with their public commentary about increasing capital deployment in the Permian while reducing exposure elsewhere. Oxy is holding steady, while ConocoPhillips has actually dialed back slightly—likely reflecting their continued focus on the Delaware over Midland.

The large independents tell a similar story. Diamondback, Devon, and Coterra are all tracking at or slightly above 2025 levels. These operators have the balance sheet strength to maintain activity regardless of near-term commodity volatility.

Smaller Independents: A More Cautious Stance

Here's where it gets concerning for the indie community. Operators with fewer than 50 total permits in 2025 are collectively down 18% YTD. That's a meaningful pullback.

If you're a small independent looking at this landscape, the message is nuanced. The big operators are creating activity—and therefore service demand—but they're also consolidating their grip on the best acreage. The window for indies to compete on acreage quality is narrowing.

County-Level Breakdown: Where the Action Is

The Permian is 86,000 square miles. It's not monolithic. Let's look at where permits are actually concentrating.

Delaware Basin Hot Spots

Reeves County, Texas continues to lead the basin with 247 permits YTD—about 13% of total basin activity. The northern Reeves/southern Loving County area is particularly active, with operators targeting stacked pay zones in the Wolfcamp A and B benches plus Third Bone Spring.

Lea County, New Mexico is the surprise story. Year-over-year permit activity is up 23%, driven by a handful of operators (including some privates backed by PE) who appear to be building inventory aggressively. The regulatory environment in New Mexico has stabilized after the methane rule changes in 2024, and operators are responding.

Eddy County, New Mexico is more mixed—up modestly in the northern reaches but flat to down in the southern portion where the shallower shelf play has become less economic.

Midland Basin: Concentrated Activity

Martin and Howard Counties continue to account for the lion's share of Midland Basin permits (about 60% combined). These are among the most mature areas in the entire Permian, which tells you something about where the quality rock is.

Midland and Upton Counties have seen modest declines, likely reflecting the advanced state of development in the core. There's simply less undrilled inventory.

Formation Targeting: The Wolfcamp Remains King

No surprises in formation targeting. The Wolfcamp A and B benches account for approximately 62% of all Permian permits, consistent with historical patterns. The Third Bone Spring represents another 18%, primarily in the Delaware Basin.

What is notable is a modest uptick in Spraberry permits in the Midland Basin (up about 15% YoY). This likely reflects operators testing refrac candidates and infill opportunities in zones that were historically considered secondary targets. With the core Wolfcamp largely held by production, some operators are looking at stacked pays they previously ignored.

Well Design Trends: Longer Laterals Continue

The march toward longer laterals continues, though we may be approaching practical limits in some areas. The average permitted lateral length in the Permian is now approximately 10,400 feet, up from about 9,800 feet a year ago.

Three-mile laterals (roughly 15,000+ feet) represented about 12% of permits YTD, compared to 8% in early 2025. These extended reach wells are concentrated in specific areas where lease configurations allow—primarily in the Delaware where operators like ExxonMobil have consolidated large contiguous positions.

For independents who often deal with smaller, checkerboard lease positions, the practical lateral length is shorter. This creates a structural disadvantage in capital efficiency that's worth acknowledging.

DUC Inventory: Still Working Through the Backlog

The drilled-but-uncompleted inventory in the Permian currently sits at approximately 872 wells, down from over 1,200 in mid-2024. Operators continue to work through this backlog, which partially explains why permit activity hasn't fully recovered—many operators are completing existing DUCs rather than drilling new wells.

This DUC drawdown will eventually need to reverse if operators want to maintain production growth. Watch for permit activity to accelerate in H2 2026 as the backlog normalizes.

What's Driving These Trends

Several macro factors are shaping Permian drilling decisions:

Commodity Prices: The $70 Floor

WTI has traded in a $68-78 range for most of the past six months. This is comfortable territory for the majors but creates margin pressure for smaller operators with higher cost structures. The strip curve is in slight backwardation, which discourages aggressive drilling for operators who need to hedge to satisfy lenders.

Takeaway Capacity: No Longer a Constraint

The infrastructure buildout of the last few years has paid off. Waha differentials have normalized, and there's ample pipeline capacity for both oil and gas. This removes what was historically a major constraint on Delaware Basin development.

Capital Availability: The Divergence

This is where the small operator struggle becomes clear. The majors and large independents are generating massive free cash flow and can self-fund drilling programs. Smaller operators who historically relied on reserve-based lending are finding credit markets tighter and more expensive. PE-backed operators who raised capital before 2023 are in good shape; those trying to raise now face a challenging environment.

Outlook: What Permit Data Suggests for H2 2026

Based on current permit trends and operator commentary, here's what we expect:

• Majors and large independents will maintain or modestly increase activity. The recent Q4 earnings calls were uniformly constructive on Permian investment.
• Small operator activity will remain subdued absent a meaningful improvement in oil prices or credit conditions.
• Geographic concentration will continue. The best rock is largely held, and operators will focus drilling there rather than venturing into marginal areas.
• M&A activity could accelerate. The capital constraints facing smaller operators, combined with majors' appetite for inventory, suggest more consolidation ahead.

What This Means for Independents

If you're an independent operator in the Permian, the takeaways are clear:

1. Watch your neighbors. Understanding what the operators around you are doing—and why—informs your own development timing and strategy.
2. Focus on capital efficiency. In a cost-constrained environment, drilling the highest-return wells first is more important than ever.
3. Consider your exit options. If you're holding quality inventory but lack the capital to develop it, now may be a good time to explore strategic alternatives while majors are actively looking.
4. Stay informed on formation trends. As operators test secondary targets, there may be opportunities to learn from their results and optimize your own development plan.

The Permian in 2026 isn't a story of boom or bust. It's a story of consolidation, efficiency, and strategic patience. The operators who thrive will be those who read the data clearly and position themselves accordingly.

We'll continue tracking permit activity and publishing updates. The data will tell us where this basin is headed—if we pay attention.