The North American drilling market may be turning a corner.
During its Fiscal Q2 2026 earnings call, Helmerich & Payne (H&P) told investors it believes the second quarter represented the low point for both drilling activity and margins. Management cited improving commodity prices, increasing customer demand, and stronger technology adoption as reasons for raising its outlook for the remainder of the year.
The drilling activity from H&P’s own fleet supports that optimism.
H&P: “Last Quarter Will Represent a Trough”
CEO Trey Adams said the company believes drilling conditions have begun to improve.
“Due to significant shifts in the commodity market over the last two months, we are confident that last quarter will represent a trough for both our rig count and direct margins.”
As a result, H&P increased its outlook for the second half of fiscal 2026 and announced additional deployments of its FlexRobotics automated drilling system driven by customer demand.
Management also emphasized that activity is strengthening in the Lower 48 and that private operators have begun adding rigs, giving the company confidence to increase its North American guidance.
Where H&P Is Drilling
The company’s drilling footprint remains heavily concentrated in the major unconventional basins across the United States.
Wells Drilled by Basin (2026)
| Basin / Play | Wells |
|---|---|
| Permian Basin – Delaware | 749 |
| Permian Basin – Midland | 467 |
| Eagle Ford | 247 |
| Williston Basin – Bakken | 71 |
| Haynesville Shale | 70 |
| Appalachian Basin – Marcellus | 53 |
| Appalachian Basin – Utica | 43 |
| DJ Basin – Niobrara | 37 |
| Anadarko Basin – STACK | 36 |
| Piceance Basin | 28 |
| Other Basins | 74 |
| Total Wells | 1,875 |
Nearly 65% of all wells drilled by H&P this year have been in the Permian Basin, demonstrating that operators continue to allocate capital to the lowest-cost and highest-return oil basin in North America.
Activity Is Concentrated in West Texas and New Mexico
The county-level data highlights where operator demand remains strongest.
Top Counties by Wells Drilled
| County | Wells |
|---|---|
| Eddy, NM | 248 |
| Lea, NM | 216 |
| Loving, TX | 153 |
| Upton, TX | 111 |
| Martin, TX | 110 |
| Midland, TX | 107 |
| Reeves, TX | 106 |
| DeWitt, TX | 63 |
| Glasscock, TX | 50 |
| Andrews, TX | 46 |
The dominance of Eddy and Lea Counties reflects continued development in the Delaware Basin, while Loving, Martin, Midland, Reeves and Upton counties remain among the most active areas in the Midland and Delaware sub-basins.
The Largest Customers
H&P’s customer mix also illustrates where drilling investment is occurring.
Top Operators by Wells Drilled
| Operator | Wells |
|---|---|
| Exxon (XTO) | 364 |
| Devon Energy | 166 |
| EOG Resources | 165 |
| OXY USA | 150 |
| Permian Resources | 142 |
These companies represent many of the industry’s most active unconventional operators, particularly within the Permian Basin.
Geographic Distribution
Wells by Province / State
| Province / State | Wells |
|---|---|
| Texas | 1,052 |
| New Mexico | 470 |
| North Dakota | 71 |
| Colorado | 69 |
| Oklahoma | 49 |
| West Virginia | 44 |
| Ohio | 43 |
| Louisiana | 43 |
| Utah | 17 |
| Pennsylvania | 9 |
| Gulf of Mexico | 7 |
| Wyoming | 1 |
Texas and New Mexico together account for more than 80% of H&P’s drilling activity this year, underscoring the company’s exposure to the strongest oil-producing regions in North America.
Why H&P Is Optimistic
Management highlighted several reasons they believe the market is improving:
- North American rig activity has likely reached its low point.
- Private operators are beginning to add drilling programs.
- Customer demand for automation continues to increase.
- FlexRobotics deployments are expanding beyond initial pilots.
- Tightening availability of high-specification rigs should support stronger margins.
Rather than expecting a short-lived rebound, H&P suggested the company may be entering the early stages of a multi-year oilfield services upcycle, driven by improving fundamentals in the Lower 48 and continued demand for drilling efficiency.
Bottom Line
H&P’s earnings call painted a more constructive picture for North American drilling than investors have heard in recent quarters. While geopolitical uncertainty remains a headwind internationally, management believes the North American market has begun to recover.
The company’s own drilling data supports that view. With 1,875 wells drilled, nearly two-thirds concentrated in the Permian Basin, and activity led by major operators such as Exxon, Devon, EOG, Oxy and Permian Resources, H&P remains well positioned to benefit from a recovery in U.S. land drilling. Combined with growing adoption of automation technologies like FlexRobotics, the company appears confident that the second half of 2026 will be stronger than the first.
Author: phinds