Helmerich & Payne told investors on 6 August that it had more rigs turning in the United States than at any point this year, and would add more this quarter. Four days later Barclays lifted its price target on the stock to $50. In between, Brent crude pushed above $88 a barrel as talks to end the Middle East conflict and reopen the Strait of Hormuz stayed deadlocked and the International Energy Agency (IEA) warned of the widest global supply deficit in five years.

The three land contract drillers on this desk's natural-gas list went up together on that news. Natural gas did not. Henry Hub, the US benchmark, sits at $2.715 per million British thermal units (MMBtu), down 7.1% over 30 days, and the Energy Information Administration (EIA) cut its third-quarter forecast by 50 cents to $2.87, citing softer liquefied-natural-gas feedgas demand. Schlumberger, Halliburton and Baker Hughes rose over the same seven sessions. This was an oil bid arriving in gas-levered names.

Activity up, earnings down

What the drillers themselves reported is the more interesting split. Helmerich & Payne, which rents automated FlexRig land rigs to producers in the Permian, Appalachia and Haynesville and also drills in Argentina, Bahrain and Saudi Arabia, averaged 142 US rigs last quarter and exited at 147, guiding to 145–151. Direct margin reached $18,669 per rig-day, more than $1,000 better sequentially even while reactivating ten rigs, on a $6.1bn backlog and 95% super-spec utilization. Yet revenue for the June quarter was $1.03bn, down 0.6% from a year earlier, and gross margin fell to 12.03% from 15.10%.

Nabors Industries, the Bermuda-domiciled driller that also sells directional-steering software and rig equipment and runs 55 rigs in Saudi Arabia through its SANAD joint venture, was the only one of the three to raise guidance, to $920–930m of 2026 EBITDA. Its Lower 48 daily revenue rose $902 to $33,555, with leading-edge pricing headed for the mid-$30,000s and 45% of that fleet on contracts of six months or longer. Revenue still fell 1.9% to $816.9m and the company posted a $29.1m net loss.

Precision Drilling, Canada's largest land contractor, set an all-time company record of 61 active Canadian rigs and grew its customer count from 25 to 30 this year. Its US daily margin collapsed to US$6,210 from US$9,290 in a single quarter after seven rig reactivations that carry $1,500–$2,000 a day of cost each. Adjusted EBITDA fell 10% to C$97m and the shares fell on the miss. Management guides US margins to US$7,000–8,000 this quarter and near US$10,000 by the fourth.

Reactivation cost, in short, is eating the day-rate gain. And the gas customers are not obviously coming: Precision flagged two or three Appalachian gas customers pausing programmes, Expand Energy has trimmed its operated rigs from 13 to 12 and guides to 11–12 by year-end, and the US rig count's rise to 593, a March-2025 high, was led by 455 oil rigs. Gas-directed rigs number 128.

What the price already assumes

The three names land in three different places. Helmerich & Payne has gained 141% over twelve months on consensus FY2026 EBITDA of $858m against $807m the prior year — 6% growth. Its trailing enterprise value to EBITDA is 7.65x, and its price against trailing gross profit has gone from 3.07x at this desk's May review to 10.54x, because the denominator shrank. At $44.20 the shares sit above the $40.50 average analyst target.

Nabors looks cheapest at 2.30x EV/EBITDA, but that is a leverage artefact: free-cash-flow guidance is $20–30m against $710–730m of capital spending, a 2.85% cash yield, and the stock trades at 2.47x book.

Precision is the one nobody bid. It is down about 11% over three months, roughly 9% below its May high, trading at 0.947x book — below tangible equity — on a 7.87% trailing free-cash-flow yield and 12.3x forward earnings. It reports in Canadian dollars against a US-dollar quote, so treat cross-currency ratios as directional. Against that: a Canada Revenue Agency reassessment with maximum exposure of C$155m plus interest, roughly C$40m of it potentially payable within a year.

The setup

Where it stands — A seven-session, oil-led repricing concentrated in Helmerich & Payne, on a gas price that fell and gas customers that are cutting rigs. Would confirm — Precision's US daily margin printing US$7,000–8,000 this quarter and near US$10,000 next, as guided. Would invalidate — Gas-directed rigs slipping back below 120 while Lower 48 leading-edge day rates stall under $33,000. Watch next — Baker Hughes publishes the gas rig count every Friday; Precision and Nabors report third-quarter results in late October. Valuation — HP at 7.65x trailing EV/EBITDA and 10.54x gross profit versus 3.07x in May; PDS at 0.947x book, 12.3x forward earnings.