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Canadian Rig Activity Eases While Sector Outlook Remains Firm, RBC Says

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Canadian drilling activity softened as the Western Canadian Sedimentary Basin rig count fell to 204, while sector fundamentals remained resilient, RBC Capital Markets said in a Tuesday note.

The firm said its Canadian oilfield services coverage group remains up 31% year to date, outperforming the S&P/TSX Capped Energy Index, which has advanced 26.3% over the same period.

CES Energy Solutions led the group with a 4.8% gain, while Pason Systems slipped 0.8% and Enerflex declined 3%, making them the top three performers, RBC said.

Precision Drilling was the weakest performer, falling 8.2%. Ensign Energy Services dropped 4.6% and Trican Well Service lost 4.1%, rounding out the bottom three performers, the note said.

RBC said the Q2 average rig count reached 165, exceeding its estimate of 143. Private operators added one rig over the week, while large exploration and production companies reduced activity by one rig.

The Montney rig count increased by three week over week to 39. Ovintiv (OVV) led operators with six rigs, followed by Tourmaline with five, while Precision Drilling remained the top contractor with 23 rigs, ahead of Ensign with seven and Savanna with five, RBC said.

The Duvernay rig count declined by one week over week to 14. Whitecap Resources led operators with three rigs, followed by Canadian Natural Resources with two, while Ensign Energy Services remained the top driller with six rigs, ahead of Precision Drilling and Savanna, each with two.

The Viking rig count fell by three week over week to two. Teine Energy operated both active rigs, while Ensign Energy Services and Savanna each drilled one rig, according to the note.

The Oil Sands rig count declined by four week over week to 10. Cenovus Energy (CVE) led operators with four rigs, while CNOOC and Canadian Natural Resources each ran two. Precision Drilling remained the leading contractor with eight rigs.

RBC said Canadian exploration and production companies are on track to generate $6.9 billion in pre-dividend free cash flow in 2026 and $6.4 billion in 2027 using futures strip pricing.

RBC expects producers to reinvest 64% of cash flow in 2026 and 67% in 2027, compared with the five-year trailing average of 64%.

Price: $23.81, Change: $-0.71, Percent Change: -2.88%

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