Permian Gas Glut Contrasts with Bakken Stability Ahead of Q3 Earnings

A preview of shale stocks to watch before third-quarter earnings highlights the stark difference between pipeline-constrained regions like the Permian and operations in North Dakota's Bakken. According to an OilPrice.com report published Tuesday, Permian producers spent much of 2026 paying buyers to take their associated natural gas, with Waha Hub spot prices averaging negative $2.19 per million British thermal units for part of the year.

The report notes that one of the two drilling companies highlighted works mostly in North Dakota, far from the Waha pricing point. This geographic distinction insulated it from the severe gas price discounts that plagued the Permian Basin, where executives cited gas takeaway capacity as a top constraint.

The U.S. Energy Information Administration's October outlook, cited in the report, projects domestic crude output to rise from 13.9 million barrels per day this year to 14.3 million in 2027. The forecast assumes Middle East oil flows stay constrained through the fourth quarter.

While not a Bakken operator, Permian Resources' detailed second-quarter results illustrate the extreme market dynamics some face. The company reported it curtailed gas from wells with a high gas-to-oil ratio, cutting gas output by about 20% sequentially. It netted 38 cents per thousand cubic feet for its gas, including hedges, during a quarter when Waha prices averaged negative $3.14.

"Management said on the earnings call that it curtailed gas from wells with a high gas-to-oil ratio," the source reported. The company turned every curtailed well back on in late June once prices recovered.

Despite the gas challenges, Permian Resources posted record adjusted free cash flow of $751 million, up from $312 million a year earlier, on oil production of 198,071 barrels per day. Co-CEO James Walter said it will produce nearly 10 percent more oil than last year on less capital than it spent in 2025.

The company's experience with derivatives also offers a cautionary note for producers. Its realized oil price was reduced by $12.44 a barrel due to hedging costs, taking it from $97.81 to $85.37. About 70,000 barrels per day, roughly a third of its production, are swapped at between $67 and $69 through December, causing it to miss part of the recent price rally.

For Bakken operators, the report underscores the advantage of the region's established midstream infrastructure, which avoids the severe gas price discounts seen elsewhere. The focus for North Dakota producers remains on oil price realizations and capital discipline as the industry heads into third-quarter earnings season.