EIA: Texas and New Mexico Led All States in Oil Production in 2022

With one of the world's most productive oil basins straddling their common border, Texas and New Mexico led all U.S. states both in overall crude oil production and in production growth in 2022 compared to the previous year. The U.S. Energy Information Administration (EIA) released its annual crude oil production report this week, revealing those figures.

New Mexico has been leading the growth curve for a while. The report states, "In 2022, for the third consecutive year, crude oil production grew more in New Mexico than in any other U.S. state. New Mexico production grew by 0.3 million [barrels per day] b/d to 1.6 million b/d, a record for the state."

In fact, New Mexico is the only state whose production has grown every year since 2017--going from an average of 472,000 b/d that year, to 1.573 million b/d in 2022. The 2020 pandemic slowed production that year in every other state except West Virginia--but that state lost oil production in 2021, breaking its string of increases.

In 2022, Texas oil production expanded to 5.046 million b/d on average, up from 4.766 million b/d in 2021. The state hit the 5 million mark early in 2022 and has been setting all time daily production records often since December of 2021.

Both states benefit from their share of the prolific Permian Basin, an area whose total production exceeds that of any individual state. A previous EIA release noted that, "In June 2022, the Permian Basin accounted for about 43% of U.S. crude oil production and 17% of U.S. natural gas production (measured as gross withdrawals)."

Permian oil production surpassed 5 million b/d in March of 2022 and, although it has since varied, it has not dropped below 5 million since then. Pioneer Natural Resources (NYSE:PXD) (Irving, Texas) is the number one producer in the region, with ExxonMobil (NYSE:XOM) (Irving, Texas) and Occidental Petroleum (NYSE:OXY) (Houston, Texas) also among the top five. In addition to leading the nation in oil production, the EIA says the Permian is third in gas production.

The agency credits an increase in drilling rig counts for the production boosts. Quoting rig count information from Baker Hughes (NASDAQ:BKR) (Houston, Texas), the EIA said, "Based on this data, the number of land rigs increased by 8 in New Mexico, by 100 in Texas, and by 85 in all other states combined in 2022. In 2023, through the first week of May, the number of land rigs decreased in Texas by 8 and increased in New Mexico by 5."

On the flip side, production decreased in California for the eighth consecutive year and in Alaska for the fifth. North Dakota's numbers declined for the third year in a row.

Other significant oil states also seeing production increases include Colorado, Wyoming, Oklahoma and Louisiana.

Overall U.S. production grew by 5.6%, or 0.6 million b/d, in 2022 compared with 2021, averaging 11.9 million b/d. In 2017, U.S. daily production averaged 9.4 million b/d. It surpassed the 10 million mark the following year and peaking at 12.3 million b/d in 2019.

For at least the near future, the EIA expects growth to continue. Said the EIA, "We forecast U.S. crude oil production will continue to increase in 2023 and 2024. In our May Short-Term Energy Outlook, we forecast total U.S. crude oil production will climb to 12.5 million b/d in 2023 and to 12.7 million b/d in 2024."

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