The Permian basin remained one of the most active areas in the United States for exploration and development of oil and gas reserves. The total number of wells drilled in 1974 was the highest in the past 10 years. This activity represents a 13.3% increase over 1973 with a corresponding 10.3% increase in total footage. The most significant percentage increase in drilling was in exploratory wells (21%) reflecting the industry-wide effort to find new hydrocarbon reserves.

Main active exploratory areas were the Delaware basin, Eastern shelf, and Northwest shelf. Drilling for deep Devonian, Silurian-Fusselman, and Ellenburger gas plays dominated West Texas, and the Morrow sandstones were of primary interest in eastern New Mexico. Active areas of development drilling were in the Delaware basin, Midland basin, and in eastern New Mexico where there was a 50% increase over 1973.

Geophysical activity also experienced a great surge in 1974, a 39% increase in the number of crew-weeks reported. This was the highest since 1966.

Leasing continued at a rigorous pace with several large blocks being assembled in peripheral areas. Intense competition has brought change in the lease bonus, rentals, royalty, and term.