Canadian oilfield services stocks fell 3% over the past week as drilling activity softened in key regions, RBC Capital Markets analysts said.
In a Tuesday note, RBC said its Canadian oilfield services coverage group has gained 26.3% so far this year, trailing the 46.8% increase in the S&P/TSX Capped Energy Index.
Among the week's strongest performers were Enerflex (EFXT), which rose 2.3%, Essential Energy Services, which declined 0.3%, and Calfrac Well Services, which fell 0.5%. The weakest performers included Precision Drilling (PDS), down 3.3%, Pioneer Well Services, down 4.1%, and Trican Well Services, which dropped 7.4%.
RBC reported that the Western Canada Sedimentary Basin rig count decreased by two rigs week-over-week to 225. Despite the decline, activity remains 38 rigs above year-ago levels and 35 rigs above the five-year average. Third-quarter average activity is currently running at 221 rigs, above RBC's forecast of 201 rigs.
Private companies increased drilling by one rig during the week, while large exploration and production companies producing more than 75,000 barrels of oil equivalent per day reduced activity by one rig.
Activity in the Montney formation was unchanged at 39 rigs. ARC Resources and Ovintiv (OVV) each operated six rigs, while Tourmaline Oil had five. Precision Drilling remained the leading contractor in the play with 22 rigs, accounting for 56% of total activity.
The Duvernay formation saw activity fall by two rigs to 16. Whitecap Resources led operators with three rigs, while Ensign Energy Services was the busiest contractor with five rigs.
In southeast Saskatchewan, drilling activity increased by one rig to 23. Tundra Oil & Gas led operators with five rigs, followed by Saturn Oil & Gas with four. Stampede Drilling was the largest contractor, with nine rigs representing 39% of regional activity.
Heavy oil drilling experienced the largest decline, falling five rigs to 63. Canadian Natural Resources (CNQ) was the top operator with 11 rigs, while Precision Drilling accounted for 24 rigs, or 38% of heavy oil activity.
Looking ahead, RBC's Canadian exploration and production analysts estimate companies under coverage will generate $7.1 billion in pre-dividend free cash flow in 2026 and $7.8 billion in 2027, based on current futures pricing. Producers are expected to reinvest about 64% of cash flow in 2026 and 62% in 2027, broadly matching the five-year average reinvestment rate.
Price: $22.29, Change: $+0.04, Percent Change: +0.18%