Valor | Energy Connection – Dec. 29, 2025

December 29, 2025 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

• U.S. drillers add oil, gas rigs for first time in three weeks, Baker Hughes says
• Summary: U.S. energy firms added rigs for the first time in three weeks, raising the total by three to 545 as oil rigs climbed to 409 and gas held at 127. Despite the weekly gain, the count remains down 7.5% or 44 rigs year-over-year, following significant declines in 2023 and 2024. The EIA projects 2025 crude output will rise to 13.6 million bpd and gas output to 107.7 bcfd, spurred by a predicted 63% increase in spot gas prices.
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1. Nat-gas prices rally on colder U.S. forecasts for early-January
2. Summary: January Nymex natural gas futures rallied 2.92% to close up +0.124 as forecasts shifted colder for early January across the North and West. Although production remains robust at 113.2 bcf/day, up 7.9% year-over-year, market consensus expects a significant inventory draw of 169 bcf in the upcoming rescheduled EIA report. Meanwhile, European storage sits at just 68% capacity compared to the 78% average, offering support despite U.S. inventories tracking 0.9% above the five-year seasonal norm.
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1. Oil stuck in tug of war
2. Summary: Oil prices are stuck in a tug of war, with geopolitics supporting short-term volatility while oversupply and weakening demand cap upside, according to Naeem Aslam of Zaye Capital Markets. BofA Global Research forecasts a global surplus of two million barrels per day in 2026, predicting Brent will average around $60 per barrel next year. However, Enverus Intelligence Research projects Brent averaging $55 in 2026 but turns bullish post-2026, expecting supply shortages due to underinvestment.
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• Oil falls 2% on looming supply glut, hopes of Ukraine peace deal
• Summary: Oil prices fell more than 2% Friday, with Brent settling at $60.64 and WTI at $56.74, pressured by expectations of a global supply surplus. Prices are on track for their largest annual decline since 2020, down roughly 20%, as the IEA forecasts supply will exceed demand by 3.84 million barrels per day next year. Markets continue to monitor geopolitical developments, while recent U.S. actions involving Venezuelan oil are expected to have limited impact on overall supply.
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• Harbour to acquire LLOG for $3.2B
• Summary: Harbour Energy agreed to acquire LLOG Exploration for $3.2 billion, comprising $2.7 billion in cash and $500 million in shares, to enter the deepwater U.S. Gulf of Mexico. The deal adds 34,000 barrels of oil equivalent per day to Harbour’s output and grants LLOG an 11% stake, funded partly by a $1 billion bridge facility and term loan. Expected to close late next quarter, the move diversifies Harbour’s portfolio beyond the UK North Sea amid declining domestic fields and high taxes.
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1. Permian Basin operators brace for tough 2026, eye 2027 rebound
2. Summary: With oil prices sinking below $60 per barrel, Permian Basin operators are bracing for a tough 2026 with production expected to remain flat at around 6 million barrels per day. Analysts predict a price rebound in 2027 due to current underinvestment, driving a pivot toward natural gas to meet demand from LNG exports and AI data centers. To support this, midstream companies are expanding pipelines to the Gulf Coast and West while operators explore deeper benches like the Barnett.
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1. Permian Basin shale gas and tight oil and shale gas from U.S. tight oil plays
2. Summary: Convolution analysis indicates average Permian tight oil well profiles have declined since 2022 due to pressure depletion, despite increasing lateral lengths. A low-price scenario assuming 108,000 completed wells yields a tight oil Ultimate Recovery of 47 Gb, while current estimates across price cases range from 42 Gb to 62 Gb. With 52,000 economic locations remaining, rising Gas-Oil Ratios are used to project shale gas volumes, though medium-price models may prove optimistic.
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