Executive Summary:
Infrastructure: Drilling in the Permian is steadily migrating to the Delaware sub-basin, boosting the outlook for gas production.
Rigs: The US rig count remained flat for the week of Feb. 14, bringing the total rig count to 513.
Flows: US natural gas volumes in pipeline samples held flat W-o-W, averaging 82.3 Bcf/d for the week ending Feb. 22.
Storage: Traders and analysts expect the EIA to report a 47 Bcf storage withdrawal for the week ending Feb. 20.
Infrastructure:
The hunt for new crude oil resources in the Permian is leading more operators to decamp to the Delaware sub-basin, a shift that will lead to increased gas production from West Texas and southeastern New Mexico.
Historically, the Delaware has been less explored than the Midland Basin. Several factors account for this preference by E&Ps. For one, much of the Delaware in New Mexico spans federal lands, creating more permitting hurdles compared to industry-friendly regulations in West Texas. Benches in the Delaware tend to have higher gas content than the Midland, a drawback when producers are targeting liquids. Moreover, much of the gas in the Delaware is off-spec with high sulfur and carbon dioxide content, requiring additional treating to make suitable for use in pipelines.
Despite these factors, operators are steadily investing more in the Delaware relative to the Midland. Rig counts in the Delaware accounted for nearly 58% of total Permian Basin activity in 2025, up from a 51% share of rigs in 2021 (see figure). Ten years ago, the Delaware represented only 45% of Permian rigs, according to data in East Daley Analytics’ Energy Data Studio.
The growing prominence of the Delaware reflects the realities of a maturing industry: The basin’s more extensive underdeveloped acreage means there is more runway for growth compared to the Midland. As a result, producers are willing to tolerate more gas and NGLs, and higher gas treating expenses, to maintain robust oil production.
The migration to the Delaware is rippling through the industry in numerous ways, from planned infrastructure investments to the focus of mergers and acquisitions. In the 2026 Dirty Little Secrets, East Daley reviewed how the transition to the Delaware is changing the outlook for US energy and the industry
The most important consequence is the divergence in the production outlook between crude oil and natural gas and NGLs. Gas-to-oil ratios (GOR) are rising in the Permian Basin for several reasons, and the migration to the Delaware is a primary contributor. Since Delaware wells produce more gas than those in the Midland (see figure), methane is becoming a larger share of overall Permian output as more wells are drilled there. While East Daley forecasts relatively flat Permian crude oil production through 2030, we expect robust growth ahead in gas and NGLs.
Delaware growth in turn is driving infrastructure investments. Most notable is the boom underway in new gas pipelines. Several greenfield projects are planned to increase gas takeaway, including WhiteWater’s Blackcomb Pipeline (+2.5 Bcf/d) and Eiger Express (+3.7 Bcf/d), and Energy Transfer’s (ET) Hugh Brinson Pipeline (+1.5 Bcf/d) and Desert Southwest (+2.3 Bcf/d). We anticipate over 10 Bcf/d of new Permian gas egress by 2030, strengthening Waha prices as takeaway constraints ease.
See the 2026 Dirty Little Secrets for more information on the Permian outlook.
Rigs:
The US rig count remained flat for the week of Feb. 14, bringing the total rig count to 513. The Permian (-3) and Bakken (-1) lost rigs while the ArkLaTex (+2), Anadarko (+1) and DJ (+1) gained rigs W-o-W.
At the company level, EPD (+2), OKE (+2), M6 Midstream (+2), ET (+1) and KMI (+1) gained rigs W-o-W.
See East Daley Analytics’ weekly Rig Activity Tracker for more information on rigs by basin and company.
Flows:
Note: East Daley has vetted our US pipeline samples and upgraded the data tagging, resulting in a more robust capture of production trends from the daily samples.
US natural gas volumes in pipeline samples held flat W-o-W, averaging 82.3 Bcf/d for the week ending Feb. 22.
Flows in gas basins rose 0.6% to 51.5 Bcf/d. The Marcellus+Utica sample increased 1.8% to 39.2 Bcf/d, while the Haynesville sample declined 4.0% W-o-W to 11.2 Bcf/d.
Samples in liquids basins declined 1.0% W-o-W to 22.8 Bcf/d. The Permian sample declined 2.0%, while the Eagle Ford sample increased 0.8%.
Storage:
Traders and analysts expect the Energy Information Administration (EIA) to report a 47 Bcf storage withdrawal for the week ending Feb. 20. A 47 Bcf draw would nearly eliminate the deficit to the 5-year average, shrinking from -123 Bcf to just –2 Bcf. The deficit to last year would flip to a surplus of 146 Bcf.
This Thursday’s storage report will be extremely bearish, reflecting a broad-based warming trend following the frigid weather from Winter Storm Fern earlier this month. This has been reflected in the prompt-month futures price, which has fallen precipitously over the past month – from $4.37/MMBtu on Feb. 1 to $2.92 as the March contract nears expiration (-33%). The contract on Monday (Feb. 23) saw its lowest close since Oct. 16. Cash prices are also noticeable weaker; the Henry Hub spot price started the month at $4.40 and is now trading around $3.15.
Convergence was to the downside this month as cash (and fundamentals) drove the prompt downwards. However, the next two storage reports for the week ending Feb. 27 and March 6 should be more bullish vs the five-year average and could add as much as 60 Bcf to the deficit. In the Macro Supply & Demand Report , East Daley maintains forecast of 1,756 Bcf at the end of March, about 40 Bcf lower than last year and 55 Bcf lower than the five-year average.
See East Daley’s latest Macro Supply & Demand Report for more on the winter market outlook.
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