There’s been a lot of talk about Gas-Oil Ratio (GOR) in the Permian. But GOR in the Permian has been VERY stable compared to the other unconventional plays, rising only 29% there vs. 164% in the Williston or 74% in the DJ. What’s going on, and what does this mean for supply outlook?
Wind back the clock 10 years, and you’ll find the Permian producing just over 3 MCF/bbl, compared to just under 4 mcf/bbl today. Unconventional oil wells naturally produce comparatively more gas to oil as they get older, so we should expect the aggregate GOR of a basin to rise with time as its wells become, on average, older.
The question for rising GORs, then, is what explains the steeper rise in the other basins? Peeling it back, we see three very different causes.
The Williston has had the most dramatic rise of all the major plays, so we’ll start there. Across the Bakken-Three Forks play, newer wells produce more gas than older wells. With thinner reservoirs and higher permeability, the Bakken is at higher risk of pressure depletion effects causing a higher fraction of gas production (perhaps due to dropping below the bubble point locally on fracture surfaces?). Oil gravity and bubble point pressure both influence the amount of dissolved gas in the oil and the formation volume factor, which in turn affect GOR trends. As pressure drops below the bubble point pressure, gas dissolution and the release of solution gas can result in the formation of a gas phase and the release of free gas present in the reservoir. Let’s call this phenomenon the “secular rise”.
In the DJ, GOR has risen 74% in 10 years, but the GOR pattern has a very distinct “double peak” with big ramps during activity lulls in 2015-16 and 2020-2021. DJ wells, compared to the other plays have by far the biggest per-well GOR increase over time. Despite starting off around 2 MCF/bbl, DJ wells ramp up to an average of 10 MCF/bbl by year 3. Without new wells coming online, the older wells dominate the GOR. The production rate and oil produced are measured in field units, and the volume of gas and volume of oil are used to calculate GOR values for these wells. Let’s call this the “average well age effect”.
In the Eagle Ford, GOR has risen “only” 50% over 10 years, but much of that increase has been since 2020. Here, the driving factor has been “changing development focus areas”, with operators drilling more in the gassier parts of the play like Webb County. It’s a logical response to higher gas prices in one of the few plays to offer the full spectrum of fluid windows. The presence of liquids, including heavy oil, heavy oils, and shale oil, also affects the classification of wells based on gas to oil ratio.
Looking forward in the Permian, what can we expect? With no regional evidence of a significant “secular rise” or “average wells age effect”, we’re left to speculate about the potential impact of “changing development focus areas.” The Permian DOES have gassier areas: the western Delaware and southeastern Midland, for instance, could see increased activity in response to high gas prices (and improved offtake). Operators have also been exploring deeper zones like the Barnett (which does continue into the Permian!), which could be another huge lever to gas supply.
In summary, absent a shift in operator focus areas, I do not expect the Permian to suddenly get much gassier; instead it should follow a slow, steady rise as its wells get older. But there is latent potential for a big increase in gas production, though that would be driven by external factors (price, offtake) rather than intrinsic reservoir properties of the Wolfcamp/Spraberry/Bone Spring plays. The process of drilling and the analysis of drilling mud can help estimate the hydrocarbons present, including oils and lighter hydrocarbons. Higher pressure in deeper zones can lead to more gas dissolved in the oil, and the flow of reservoir fluid and the measurement of oil volume and gas volume are critical for understanding production trends. A decrease in GOR may occur in areas with low gor, while high gor values indicate reservoirs with significant gas phase and more gas released per one barrel of oil produced.
Introduction to Gas Oil Ratio
The Gas Oil Ratio (GOR) is a fundamental concept in the oil and gas industry, describing the relationship between the volume of natural gas produced and the volume of crude oil extracted from a reservoir. Expressed in standard cubic feet of gas per barrel of oil (scf/bbl), the gas oil ratio provides valuable insight into the characteristics of a reservoir and the behavior of hydrocarbons during production. GOR is influenced by a range of factors, including reservoir pressure, temperature, and the fluid properties of the oil and gas present. Understanding the gas oil ratio is essential for optimizing oil production, managing gas produced alongside oil, and making strategic decisions about field development. In practice, GOR helps operators assess how much gas is released as oil is brought to the surface, anticipate changes in production rates, and evaluate the economic potential of oil wells. By monitoring GOR, companies in the oil and gas industry can better predict reservoir performance and adapt their operations to maximize both oil and gas recovery.
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Key Takeaways
- Permian basin GOR rose 29% over 10 years, compared with 164% in the Williston and 74% in the DJ.
- Permian aggregate GOR increased from just over 3 MCF/bbl about 10 years ago to just under 4 MCF/bbl today.
- Williston Bakken-Three Forks newer wells produce more gas than older wells, consistent with pressure depletion dropping below bubble point and releasing solution gas.
- DJ basin GOR shows a “double peak” pattern, with large ramps during activity lulls in 2015–16 and 2020–2021.
- DJ wells rise from roughly 2 MCF/bbl initially to about 10 MCF/bbl by year 3, increasing basin GOR when new-well additions slow.
- Eagle Ford GOR rose 50% over 10 years, with much of the increase occurring since 2020 as drilling shifted toward gassier areas like Webb County.
- Permian gas-growth upside is tied to changing development focus areas, including western Delaware and southeastern Midland, rather than a basinwide “secular rise.”
- Deeper Permian targets such as the Barnett were cited as a potential lever for higher gas supply due to higher-pressure zones.
