Why do Permian oil wells produce so much natural gas?

Because most Permian gas is associated gas: it comes out of oil wells along with the crude. Each barrel now brings more gas than it used to. From 2021 to 2025 Permian oil output rose 39% while gas output rose 60%, to 27.6 Bcf/d, as the gas-to-oil ratio climbed 16% to nearly 4,200 cubic feet per barrel (EIA).

Permian drilling follows the crude oil price, not the gas priceDaily, $/bbl. Data through 2026-11-09. Source: OilPriceAPI.

curl -H "Authorization: Token YOUR_KEY" \
  "https://api.oilpriceapi.com/v1/prices/past_year?by_code=WTI_USD&interval=daily"

Get an API key to pull this series

What is associated gas?

EIA defines associated-dissolved gas as natural gas that occurs in crude oil reservoirs, either as free gas (associated) or dissolved in the oil. Wells drilled for oil bring it to the surface whether or not anyone wants the gas. In 2024, gas from wells EIA classes as oil wells was 12.5 Bcf/d, 47% of Permian output, under a strict definition of an oil well (6,000 cubic feet of gas or less per barrel). On a looser count, EIA describes most Permian gas as associated.

Why does each barrel bring more gas?

Reservoir pressure. As oil and gas are produced, pressure in the reservoir declines, and gas is easier to produce at lower pressure, so the gas-to-oil ratio rises (EIA).

Permian	2021	2025	Change
Crude oil production	4.7 million b/d	6.6 million b/d	+39%
Marketed natural gas production	17.2 Bcf/d	27.6 Bcf/d	+60%
Gas-to-oil ratio	3,628 cf/b	~4,200 cf/b	+16%

Source: EIA, June 2026. Had the ratio stayed at its 2021 level, the Permian would have produced 23.8 Bcf/d in 2025: the rising ratio alone added 3.8 Bcf/d. EIA expects the ratio to keep rising as the region matures.

Why producers keep drilling when gas is cheap

The economics are set by oil. Permian producers plan around the crude price (EIA), and the Dallas Fed Energy Survey put 2025 breakevens at $61/b in the Midland Basin and $62/b in the Delaware Basin. Gas is a by-product. Reuters reported in June 2026 that Permian firms "have been willing to take some losses on gas because they can make up for those with profits from selling oil."

Where the gas goes

Into pipelines, priced at the Waha hub. When production outruns pipeline capacity, Waha falls below Henry Hub and sometimes below zero.
Into a flare, within limits. Texas Statewide Rule 32 allows release for up to ten producing days after completion, requires flaring rather than venting beyond 24 hours. Beyond that, the Railroad Commission can grant exceptions for casinghead gas when no pipeline is available, 45 days at a time and up to 180 days. New Mexico's 2021 rules require operators to capture 98% of gas by 31 December 2026. Texas operators vented or flared 0.5% of gross withdrawals in 2023, down from 2.6% in 2018 (EIA).
Or it stays in the ground, if a producer stops producing oil to avoid producing gas, an outcome EIA flagged as possible as early as 2018.

That is the link to Waha pricing: covered in why Waha gas prices go negative.

Using the data

WTI_USD for the crude price that drives Permian drilling, NATURAL_GAS_WAHA for the price the associated gas receives, and the Permian rig count for activity.