SLB’s latest earnings update delivered a clear message on the state of U.S. drilling:
rig counts are declining — and that trend is expected to continue.
The company noted that U.S. land drilling activity remains under pressure as operators maintain capital discipline, limit spending growth, and prioritize shareholder returns over production expansion. While offshore activity in the Gulf of Mexico is improving, onshore shale drilling is no longer positioned as a growth engine for the industry.
But rather than viewing falling rig counts as a negative, SLB sees the current environment as a powerful opportunity — one that is reshaping how value is created across upstream oil and gas.
U.S. Rig Count Is Down — But Drilling Has Become More Expensive
The decline in rig count does not mean drilling has become easier.
In fact, the opposite is true.
Today’s wells are longer, more complex, and far more capital intensive than those drilled even five years ago. Multi-bench development, extended laterals, tighter frac spacing, and higher-pressure formations mean that each well represents a significant financial commitment.
With fewer rigs running, operators now face:
- Higher fixed costs per well
- Greater sensitivity to nonproductive time
- Less tolerance for drilling errors
- Strong pressure to stay within AFE targets
In this environment, performance matters more than activity.
From Rig Growth to Performance Optimization
For decades, oilfield service revenue rose and fell with rig count. More rigs meant more tools, more crews, and more revenue.
That model is rapidly changing.
As drilling activity slows, operators are shifting their focus from “how many wells can we drill” to “how efficiently can we drill every well.”
This has created a powerful tailwind for digital drilling optimization, which monetizes:
- Reduced nonproductive time
- Improved rate of penetration
- Better well placement
- Fewer drilling failures
- Faster learning between wells
Instead of being paid for activity, digital solutions are paid for outcomes.
That distinction is critical.
Why Digital Grows When Rig Counts Fall
Lower rig counts actually increase the value of digital systems.
When activity is high, inefficiencies can be masked by volume. When activity slows, inefficiencies become visible — and expensive.
Digital drilling optimization allows operators to:
- Detect problems before failure occurs
- Standardize best practices across rigs
- Apply learnings instantly from one well to the next
- Centralize decision-making through remote operations centers
Avoiding even one major drilling incident can justify the cost of digital systems across an entire drilling program.
As a result, digital adoption tends to accelerate during periods of flat or declining rig activity.
The Industry-Wide Shift Toward AI
This opportunity is not unique to SLB.
Across the upstream sector, operators are now fully committed to artificial intelligence for the same underlying reason: capital efficiency.
AI enables operators to:
- Drill fewer wells more productively
- Reduce headcount exposure through automation
- Improve consistency across multi-pad developments
- Capture and reuse institutional knowledge
- Maximize returns without increasing capital spending
AI transforms drilling from a manual, experience-driven process into a repeatable manufacturing workflow.
That transformation aligns directly with how today’s public E&P companies are measured — on free cash flow, returns, and consistency.
Digital Drilling Is Becoming Infrastructure, Not Optional Technology
Digital optimization is no longer viewed as experimental or discretionary.
It is becoming embedded into:
- Well planning
- Geosteering
- Real-time drilling operations
- Post-well performance analysis
- Field-wide development optimization
As rigs decline, the importance of these systems increases.
Each well must deliver more value, with fewer surprises and tighter execution.
A Structural Shift, Not a Cycle
The industry is not waiting for rig counts to rebound.
Instead, it is adapting to a reality where:
- Rig counts remain structurally lower
- Wells remain structurally more complex
- Capital discipline remains permanent
- Performance outweighs activity
In that environment, digital drilling optimization and AI are not growth add-ons — they are foundational tools.
The Bottom Line
SLB’s view on U.S. rig count is straightforward: land drilling is down and unlikely to return to prior-cycle highs.
But the company’s optimism stems from a deeper industry shift.
As drilling activity becomes more selective and capital intensive, value is no longer created by running more rigs — it is created by drilling better wells.
Digital drilling optimization and AI allow operators to do exactly that.
Fewer rigs.
Higher expectations.
Greater reliance on technology.
That combination is redefining where growth comes from in the modern oilfield.
