Major Oil Industry Inflection: The Bottom of The Rig Cycle

Drilling activity bottomed in February and is inflecting higher

In the first two months of 2026, oil prices continued their multi-year slide, with drilling and well servicing activity hitting multi-year lows:

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.