North American land drilling activity strengthened through the second quarter of 2026, with major drilling contractors reporting higher U.S. rig demand, increasing reactivations and tighter availability of high-spec equipment. Patterson-UTI Energy, Helmerich & Payne (H&P), Precision Drilling and Ensign Energy Services all pointed to improving market conditions extending into 2027, particularly in oil-directed basins. Private exploration and production (E&P) companies initially led the increase, while several contractors are now seeing greater interest from public operators.
Patterson-UTI averaged 92 U.S. rigs during Q2 and expects approximately 100 rigs in Q3, with activity exiting the quarter above that level. The company reported new drilling contract pricing approximately 10%–15% above first-quarter levels and said high-quality rigs outside the Permian are effectively sold out. In the Permian Basin, demand is increasing as operators prioritize rigs capable of drilling deeper targets and longer laterals using higher hook loads, additional pipe-racking capacity and advanced automation.
Other contractors are seeing similar trends. H&P raised its full-year North America Solutions rig-count outlook to 138–144 rigs and described the Lower 48 market as tightening after a period of weaker activity. Precision Drilling increased its U.S. active fleet from 32 rigs in April to 42 at the end of June and expects its Q3 average to reach the low 40s, its highest level since 2023. Precision also reported several Permian startups and said customers have already discussed adding second rigs following initial deployments.
Ensign expects additional growth as well, with 41 U.S. rigs under contract and a forecast of roughly one incremental rig per month through year-end. The company identified the Permian as its most active U.S. market and expects another four to five rigs to begin working there before year-end. Its planned Citadel Drilling acquisition will add six active 2,000-horsepower Permian rigs and increase Ensign’s estimated Permian market presence to approximately 11%.
Company Speaker Topic Quote Patterson-UTI Energy Management U.S. drilling outlook “The current strip supports a higher pace of U.S. shale drilling and completion activity than we are seeing today.” Patterson-UTI Energy Management Private E&P activity “Private E&Ps have responded more quickly to higher oil prices and are now driving a meaningful increase in drilling activity.” Patterson-UTI Energy Management Permian demand “In the Permian, demand is increasing and customers are reluctant to lose active proven rigs and crews.” Patterson-UTI Energy William Hendricks, President & CEO Private vs. public operators “It’s certainly the private E&Ps that are moving quicker than the publics.” Patterson-UTI Energy William Hendricks, President & CEO Contract duration “Every rig that’s getting reactivated is going to a program somewhere.” Patterson-UTI Energy William Hendricks, President & CEO Public E&P outlook “We’re also in discussions today with public E&Ps. They’re making plans for later this year, or early next year.” Patterson-UTI Energy William Hendricks, President & CEO Permian + gas growth “While we’re very focused on potential growth in the Permian and other oil markets, we will see some increase in drilling activity in the gas markets.” Helmerich & Payne Management Lower 48 tightening “We have quickly moved from fears of oversupply in a soft OFS market to one that is tightening quickly, particularly in the Lower 48.” Helmerich & Payne Management North America outlook “The near-term outlook for North America is improving, and we now anticipate a higher full year rig count than we previously guided.” Helmerich & Payne Management Lower 48 acceleration “We also believe the Lower 48 is set to accelerate and as a result, expect North America Solutions to exceed our original full year guidance.” Helmerich & Payne Raymond Adams, CEO Drilling efficiency “The journey of drilling efficiencies has been just an incredible one here in the U.S. Lower 48.” Helmerich & Payne Raymond Adams, CEO Permian technology “That robotic offering for us working for our customer in the Permian is delivering some fantastic wells.” Helmerich & Payne Michael Lennox, EVP Permian robotic rig “We have 1 rig that’s operating out in the Permian Basin, and it’s doing fantastic.” Helmerich & Payne Michael Lennox, EVP Permian market position “We have more rigs operating in the Permian Basin than anyone else has in the Lower 48.” Precision Drilling Management Permian customer demand “This past quarter, we had several start-ups in the Permian and multiple customers who, after working with Precision for a short period, began discussing with our team the addition of a second rig.” Precision Drilling Management U.S. operator economics “Supportive oil pricing is presenting an opportunity for our customers to either add a rig or high-grade their existing service provider.” Precision Drilling Carey Ford, President & CEO Public vs. private E&Ps “I think the first half of the year it was mostly private. Now it’s more public.” Precision Drilling Carey Ford, President & CEO U.S. rig growth “We should hit a rig count of high 40s before the end of the year.” Ensign Energy Services Robert Geddes, President & COO U.S. drilling “Today, we have 41 rigs under contract in the U.S. and see that growing a rig a month until the end of the year.” Ensign Energy Services Robert Geddes, President & COO U.S. bid activity “We are seeing a more active bid book over the last few months… and we are seeing more private equity and new names in the game.” Ensign Energy Services Robert Geddes, President & COO Permian drilling “The Permian continues to be our most active and prolific area with continued strong demand for our high-spec ADR rigs.” Ensign Energy Services Robert Geddes, President & COO Permian market share “It increases our presence in the Permian… So it brings our Permian presence up to 11%.” Ensign Energy Services Robert Geddes, President & COO Public operator demand “The public has shown at least some small demand increase.” Ensign Energy Services Robert Geddes, President & COO Rig demand “The demand is increasing for sure. The supply is also tightening up.” Ensign Energy Services Management Day rates “With tightening supply of high-spec rigs, we see rates moving roughly 5% to 10% in contract rollovers.”
Industry Impact
The Q2 contractor commentary suggests the North American drilling market is moving from stabilization toward measured growth. For oilfield suppliers and service companies, the most significant opportunity may be around high-spec rigs, rig upgrades, automation, longer-lateral drilling and associated completion activity as operators increase programs through late 2026 and into 2027.
Two-Sentence Summary
Major North American drilling contractors are reporting stronger U.S. rig demand, higher reactivation activity and tightening supplies of high-spec equipment. The Permian Basin remains a key growth market, with additional rigs, upgrades and longer-term drilling programs expected through late 2026 and into 2027.
Author: phinds