As a result, Q1 was a weak quarter across the oilfield services space, and the drillers have traded poorly as earnings have come out over the past week, including the two pure-play drilling ideas I’ve shared here on Bison Insights.

But February 2026 looks like it may have marked the bottom of the cycle. E&P earnings calls are reporting planned drilling activity increases for the first time in years, and oilfield services company guidance is echoing that.

The timing of this shift is consistent with prior cycles, where increasing drilling activity typically lags the increase in oil prices, with activity not peaking until a full 50 weeks after an increase in prices:

This historical lag and recent company commentary suggests that we’re entering the early innings of what I think will be a multi-year bull market in oilfield services. This has positive implications for the two pure-play drillers I’ve shared so far on Bison Insights. Both have outperformed the broader energy complex since publication, but I think they still have much more upside ahead:

I don’t think the opportunity is limited to these two names. I’m also working on another OFS investment idea that has badly lagged the group - despite a very compelling setup here. I’m excited to share this full thesis soon.

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance may not be indicative.

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As a reminder, I own shares of companies discussed and may buy or sell them at any time. This is not an offer, solicitation or recommendation.

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Because oil prices have been extremely volatile lately and short-term price moves are inherently difficult to predict, I like this company in particular because I think it offers an attractive return in a lower oil price environment and a potentially huge return in a higher price environment. Essentially, heads I win, and tails I win less.

The thesis is simple: the company is improving, with another recent quarter of outperformance, but the market still isn’t giving it credit. The company is paying down debt, buying back stock, and generating high cash flow, yet it still trades at a large discount to peers on both cash flow and reserve value:

This undervaluation has persisted even after the company recently posted another very strong quarter, leading one leading investment bank analyst to comment:

“Overall, this is a solid quarter for them… We believe that posting better-than-expected quarters will start to earn more confidence in the story from the market and be a key factor in driving down the valuation discount relative to mid-sized peers.”

I agree. As this company continues to improve, the market should gradually narrow the valuation discount and may eventually assign the stock a premium multiple. If its stock were to merely rise to the market values it peers, the upside is compelling:

The company’s oil-heavy production gives it strong upside if oil prices stay high. Even now, it’s already generating more cash, paying down debt faster, and buying back shares.

The setup is simple, powerful, and already happening month by month:

And because the stock is already valued very cheaply, it has protection if oil prices fall.

This is one of my largest holdings. Even after the recent pullback in oil stocks, other Bison Insights ideas have continued to outperform the broader energy market:

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Here’s a link to Saturn’s Q1 results press release.

As a reminder, I own shares of Saturn Oil (SOIL.TO) and this is not an o…

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While some oil barrels have been re-routed, approximately 12 million barrels per day of oil production remains effectively shut in. In a commodity market that clears at the margin, where even a 1 million barrel per day deficit or surplus can materially influence prices, a 12 million barrel per day disruption is unprecedented:

When the disruption began, the market had buffers from readily available inventories, including in-transit and on-water oil barrels that were a stopgap for the disrupted supply.

But as those buffers have been worked through and with trade routes have adjusted, we’re now starting to see large draws from commercial inventories and SPRs. Last week, the U.S. drew 24.1 million barrels of oil and petroleum liquids from storage (including the SPR), the third largest weekly draw since the EIA began tracking the data in 1990:

These visible, onshore U.S. inventories are especially relevant for North American producers because WTI oil is priced in the U.S, with the market physically clearing here. As those inventories tighten, the physical market clearing dynamic may be the catalyst for much higher prices.

As discussed in “Oil Prices Are Crashing - Time to Count Barrels and Track Flows to See What’s Next,” the relationship between oil prices and inventories is not linear. As inventories get tighter, each additional barrel drawn from storage historically has had a larger impact on price:

Using this historical inventory-price correlation as a guide, oil prices may quickly be heading toward all-time highs:

Even if the Strait reopened today, U.S. and global inventories would continue declining for an extended period. Trapped and rerouted ships would need time to complete their voyages and return to the Middle East, delaying the export capacity needed for shut-in production to come back online, which itself would then take time. As a result, even an immediate reopening would leave the market dealing with cumulative inventory losses for at least several months:

Considering that oil prices may be going much higher, it is timely to revisit the oil-exposed ideas I’ve shared here on Bison Insights. These stocks have performed well since publication - and they potentially have much more upside ahead:

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance may not be indicative.

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Why does the author think a higher oil price no longer means more rigs?

First, he cites low drilled but uncompleted well inventory, or DUCs, across major U.S. basins:

I think this actually cuts against his point. If operators are running low on already-drilled wells, they’ll need to drill more new wells to keep production flat or grow it.

Next, he cites three “breaks” that he argues make this cycle different:

1. E&P ownership has changed, and shareholders want returns instead of growth.

2. Core shale inventory quality is degrading.

3. Oilfield service equipment has been retired.

This all supports more drilling ahead, not less.

First, at $90 oil, well returns are very strong for many operators. Shareholders want returns, and one of the best ways to generate those returns is to drill high-return wells at attractive oil prices. The futures strip is lower than spot, but even at $75+ oil, IRRs are still very compelling across much of the industry.

Second, core inventory degradation means more wells are needed to keep production flat or grow, not fewer. Shale wells decline quickly, so as new wells become less productive, the industry has to drill more wells just to maintain production, let alone increase it.

Third, retired oilfield service equipment does not change the fact that E&P companies still need to produce oil. Producers hire OFS companies to drill and complete wells, and if there is not enough capacity to meet demand, then new equipment gets built. That’s why replacement cost is such an important valuation anchor for drilling companies, and why I’ve emphasized it in prior articles. The two Bison Insights drillers I’ve written about still trade far below replacement value estimates:

So if higher oil prices will lead to more drilling, why haven’t rig counts moved higher yet?

Because there’s usually a lag. Producers first need to approve budget increases and sign contracts, then OFS companies need to assemble crews and move rigs before activity shows up in the rig count. Historically, rig additions build over time after a move higher in WTI, often not peaking until around 40 weeks later. Today, we’re only roughly 8 weeks removed from the Strait of Hormuz crisis and the move higher in oil prices:

Recent on-the-ground data points support the view that activity is starting to rebound. In a recent Bison Insights interview, the CEO of a drilling company said inbound calls have increased and that he expects utilization to move meaningfully higher by June. A senior contact at an oil and gas private equity firm also recently told me the steel casing market is tightening. Since casing is required to drill new wells, tighter casing supply is an early sign that operators are preparing to drill more.

So yes, the old shale playbook has changed somewhat. U.S. shale is more disciplined and may not respond as quickly as it once did. But slower does not mean no response. And because rigs have been scrapped, the market is tighter, so even a modest increase in activity can move the needle much more for OFS valuations.

That’s why I continue to think the two pure-play drillers I’ve written about on Bison Insights are very compelling here, as are other ancillary beneficiaries. If we’re in the early stages of a multi-year drilling upcycle, I don’t think current valuations come close to reflecting that setup.

Below, I quickly revisit both names, discuss a third potential beneficiary, and share why I still think the market is underestimating their upside.

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance is not indicative of future results.

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I recently …

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ARC is primarily a natural gas producer, with natural gas representing approximately 60% of its 2025 production, with liquids representing the remainder. Based on 2026 estimated volumes and cash flow, Shell’s transaction value implies roughly C$53,000 per flowing boe/d and a 6.0x 2026e EV/DACF cash flow multiple. ARC also had a 1P PV-10 value of approximately C$14.5 billion, implying Shell is paying 1.5x ARC’s proved reserve value:

These transaction metrics indicate promising read-throughs for nearby Canadian E&Ps that could also become acquisition targets, including two upstream Canadian producers I’ve written about here on Bison Insights. Applying the transaction metrics to these two companies implies substantial upside from current prices.

Below, I walk through my view of the ARC deal in more detail, along with what it could imply for the valuation of these two Bison Insights ideas, both of which are compelling acquisition targets in my view.

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence.

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Here is the link to the full article about that company:

Disclaimer: I and funds I …

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This may only be the beginning of the U.S. export boom, as reports indicate that an unusually large number of oil tankers are now heading to the U.S. to load crude amid the largest oil market supply disruption in history:

The immediate result of these exports is large U.S. crude and product inventory declines, which have begun showing up in the data. Last week, total U.S. inventories fell by 13.1 million barrels, the first large U.S. draw since the Strait of Hormuz disruption - potentially an early sign that onshore OECD inventories are beginning to tighten. These draws matter because U.S. inventory levels have historically tracked oil prices closely:

If exports continue rising, how fast could inventories fall? If oil inventories decline rapidly, what will that do to oil prices? And what could that mean for energy equities from here?

I explore these fundamental oil market questions below. And then I consider the implications for energy equities, particularly the investment ideas I’ve shared here on Bison Insights.

These ideas have done quite well despite the recent pullback, both on an absolute basis and versus the XOP oil & gas producer ETF and the broader stock market:

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance may not be indicative.

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This extreme volatility is essentially the story of the oil market over the last seven weeks: conflicting headlines from both sides of the conflict, with oil prices and related equities swinging wildly in both directions.

Oil market gallows humor, Strait of Hormuz edition, from X:

I’m not a military expert, I’m not a political guru, and I can’t accurately predict short-term oil prices. But I am an expert in evaluating and investing in oil & gas stocks. In the middle of this volatility, there is one oil producer that is particularly compelling. It could be a grand slam in the current price environment, while having valuation upside even at $70 oil.

My thesis is straightforward: despite steady progress in an operational and financial turnaround, the market still does not fully appreciate these improvements. The company trades at a steep discount to peers on both cash flow and reserve value:

This undervaluation has persisted even after the company recently posted another very strong quarter, leading one leading investment bank analyst to comment:

“Overall, this is a solid quarter for them… We believe that posting better-than-expected quarters will start to earn more confidence in the story from the market and be a key factor in driving down the valuation discount relative to mid-sized peers.”

I agree. As this company continues to prove out its turnaround, reduce debt, and repurchase shares, the market should gradually narrow the valuation discount and may eventually assign the stock a premium multiple. If its stock were to merely rerate to the peer average cash flow or reserve multiple, the upside would be compelling:

The company’s oil weighted production provides it with strong upside to higher oil prices. But it is already generating substantially higher cash flow, which is accelerating debt reduction and share repurchases. This process should help drive a faster re-rating toward peer average valuations, which is why I think it offers some of the highest upside in the oil sector today.

This dynamic is simple, yet powerful. And it is happening monthly:

Meanwhile, the existing discount to peers and reserve value presents a wide margin of safety if oil prices move lower, creating a “heads I win big, tails I still win” type of setup. It may trade down in the short term if oil falls, but that could offer even more accretion to the active share repurchase program, which could lead to a higher fair value over time.

This stock is one of my largest investment holdings and is a new idea here on Bison Insights. Even after the recent pullback in oil equities, other Bison Insights ideas have continued to largely outperform the broader energy market, as they were before the war too:

Disclaimer: This material is for informational and educational purposes only and should not be considered an investment offer, solicitation, or recommendation. Please consult a financial advisor and conduct your own due diligence. Past performance is not indicative of future results.

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The backdrop is what happened this week in public markets. On Wednesday, All Birds ($BIRD), a shoe company, announced that it’s pivoting to AI compute infrastructure, and the stock has soared by over 300%!

Then Thursday, Myseum ($MYSE), a small software communications company, announced its own pivot and rebrand as Myseum.AI, and its stock soared, rising by over 100%:

Naturally, there were memes mocking how ridiculous this trend looks on its face:

But the stock reactions point to something: the market is screaming for more AI.

There’s one company I’ve written about that fits this theme far more naturally. It is already building infrastructure that could be used to power AI data centers, in an area where there are more applications for new data centers than available power - by a lot.

This company’s oil and gas assets may also be worth well above the current stock price. This offers the company the opportunity to reward shareholders with a large distribution via asset monetization or spin-out, along with the capital base to jump start the pivot to AI.

This is far more credible than a shoe company claiming they’re now “doing AI infrastructure” and rocketing their stock price higher. But still a thought experiment.

Where could that go? How high could the stock soar? 2x? 10x? I don’t know.

But if companies like $BIRD and $MYSE can skyrocket on an AI pivot in narrative alone, it’s at least worth exploring what could happen if a company with tangible, directly related assets chose to embrace it.

Disclaimer: This material is for informational and educational purposes only and should not be considered an investment offer, solicitation, or recommendation. Please consult a financial advisor and conduct your own due diligence. This is a speculative thought experiment and nothing more. Do not rely on this.

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1. How many barrels of oil are in storage?

2. How quickly are those barrels being depleted?

3. What does this mean for oil prices and related equities?

There is a lot of noise in the market. Some estimates are being published that treat SPR releases and other inventory draws as if they’re new supply, when those are actually still barrels coming out of storage. Other estimates are too high, confusing “disrupted” barrels that are still reaching end markets with “missing” barrels that are not.

The “missing” number is a truer estimate of how quickly oil is being pulled from storage, because it’s an estimate of barrels not reaching end markets that otherwise would have.

I calculated how quickly inventories are drawing down, which allows for a real-data framework for thinking about future oil prices. Historically, inventories and oil prices have moved inversely: when inventories are low, prices tend to be higher, and when inventories are high, prices tend to be lower.

Analyzing the pace of the current drawdown and the historical relationship between inventories and prices offers me a credible, directional framework for thinking about how oil prices may respond if the Strait reopens tomorrow, one week from now, one month from now, or, in a worst-case scenario, several months from now or longer.

Below, I do a deep dive analysis into these fundamentals. I then explore the implications for energy equities, particularly the investment ideas I’ve shared here on Bison Insights.

These ideas have done quite well despite the recent pullback, both on an absolute basis and versus the XOP oil & gas producer ETF and the broader stock market:

Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance is not indicative of future results.

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