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Canadian Oilfield Services Stocks Slip as Drilling Activity Remains Strong, RBC Says

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Canadian oilfield services stocks declined 1% over the past week, but the sector continues to outperform the broader energy market this year, RBC Capital Markets' analysts said in a Wednesday note.

RBC said its group of Canadian oilfield services companies has gained 27.9% year-to-date, compared with a 26.1% increase for the S&P/TSX Capped Energy Index. The top three-performing sectors were Precision Drilling, up 2.2%, Pason Systems, which gained 1.5%, and Ensign Energy Services, which declined 2.4%. The biggest declines came from Enerflex Ltd, down 5.9%, Trican Well Service, down 4.0%, and Calfrac Well Services, down 2.8%.

RBC said drilling activity across Western Canada remained strong, with the number of active rigs increasing by eight over the week to 212. RBC said that level is 42 rigs higher than the same period in 2025 and 26 rigs above the five-year average, indicating activity remains above typical seasonal levels.

The Montney region, one of Western Canada's most active oil and natural gas areas, saw its rig count fall slightly to 38. Ovintiv and Tourmaline were among the busiest operators, while Precision accounted for the majority of drilling activity in the region.

Other areas saw stronger growth. Drilling activity in the Duvernay region increased by two rigs to 16, while Southeast Saskatchewan added five rigs to reach 20. Heavy Oil activity posted the largest gain, rising by six rigs to 56, led by companies including Canadian Natural Resources Ltd. and Cenovus Energy.

RBC also said Canadian oil and gas producers are expected to maintain disciplined spending levels. Analysts estimate companies under coverage will generate about 6.9 billion Canadian dollars ($4.87 billion) in free cash flow before dividends in 2026 and 6.5 billion Canadian dollars in 2027 based on current commodity price expectations.

The forecast suggests producers will continue reinvesting roughly two-thirds of their cash flow into operations, while maintaining capital discipline in line with historical trends.

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