Valor | Energy Connection – July 28, 2025

July 28, 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.

• Interior proposes easing oil and gas commingling rules
• Summary: The Interior Department has proposed rule updates allowing oil and gas operators to commingle production from multiple leases, even those with different ownership and royalty rates. Enabled by modern metering technology ensuring accurate royalty allocation, the change could generate up to $1.8 billion in annual industry savings for reinvestment in new production. The rule is intended to improve operational efficiency, reduce surface disturbance, and support increased domestic energy production.
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1. EIA revises oil price forecast but still expects prices to decrease
2. Summary: In its July Short-Term Energy Outlook, the EIA revised its 2025 Brent crude oil price forecast up by $3 to an average of $69 per barrel, citing geopolitical risk from the Israel-Iran conflict. However, the agency still expects prices to decrease to about $58 per barrel in 2026 as global supply growth outpaces demand. Consequently, EIA projects U.S. crude production will dip from a high of 13.5 million bpd in Q2 2025 to 13.3 million bpd by Q4 2026, averaging 13.4 million bpd for both years.
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1. US rig count falls for 12th time in 13 weeks, says Baker Hughes
2. Summary: For the 12th time in 13 weeks, the U.S. oil and gas rig count fell, dropping two to 542 as of July 25, down 8% year-over-year and marking a fifth consecutive monthly decline. This drop was driven by oil rigs, which fell by seven to a low of 415, while gas rigs rose by five to 122; the Permian Basin rig count also fell by three to a new low of 260. Despite this drilling slowdown, the EIA projects crude output will still rise to 13.4 million bpd in 2025, and a 68% gas price hike will boost gas output to 105.9 bcfd.
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• First-half 2025 natural gas price volatility down in U.S.
• Summary: U.S. natural gas price volatility declined in the first half of 2025, with quarterly volatility falling from a high of 81% in Q4 2024 to 69% by mid-2025, according to the EIA. This stability reflects a major inventory swing, as storage went from 4% below the 5-year average in Q1 to 6% above average by the end of Q2 (a 173 bcf surplus) due to robust injections. The recovery was driven by a seven-consecutive-week stretch of storage injections over 100 bcf, the longest such period since 2014, easing supply concerns.
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• New Mexico lawmakers approve oil royalty rate hike for prime land
• Summary: By a 37-31 vote, the New Mexico Legislature passed a bill to increase the top royalty rate for new oil and gas development on prime state trust lands from 20% to 25%. The proposal, now awaiting the governor’s signature, aims to maximize returns from the Permian Basin and match the 25% royalty rate already charged in neighboring Texas. Royalty payments from the nation’s No. 2 oil-producing state go into a trust that distributes about $1.2 billion annually to the state’s public schools, universities, and hospitals.
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1. S&P Global: Permian methane intensity drops by half in two years
2. Summary: The methane emissions intensity of oil and gas production in the Permian Basin declined by more than 50% from 2022 to 2024, according to a new S&P Global Commodity Insights analysis. In 2024 alone, methane intensity fell 29% to 0.44% per barrel of oil equivalent as absolute annual emissions dropped 21.3 billion cubic feet (bcf), a 22% decline from the year prior. The analysis, based on 500+ aerial surveys covering 90% of basin production, attributes this reduction to better equipment and using AI for advanced leak detection.
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1. Oil prices settle at 3-week low on US and China economic worries
2. Summary: On July 25, oil prices hit a three-week low as Brent crude settled down 1.1% at $68.44 and WTI crude fell 1.3% to $65.16, marking weekly losses of about 1% and 3% respectively. The decline was driven by concerns over weak U.S. economic data and China’s 0.3% dip in fiscal revenue, coupled with signs of growing supply from OPEC+ and potentially Venezuela. The U.S. is preparing to allow firms like Chevron to operate in Venezuela, a move that could boost the nation’s oil exports by more than 200,000 barrels per day.
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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.