$OVV

Canadian Oilfield Activity Strengthens As WCSB Rig Count Climbs, RBC Says

Canadian oilfield activity strengthened alongside firm oil prices and cash-flow expectations, with the Western Canadian Sedimentary Basin rig count rising to 221, RBC Capital Markets said in a Tuesday note.Ensign Energy led Canadian oilfield services stocks over the week with a 3.2% gain, followed by CES Energy Solutions at 1.7% and Pason Systems at 1.4%, RBC said.Precision Drilling (PDS) fell 0.3%, Trican Well Service declined 0.9%, and Calfrac Well Services dropped 3.8%, marking the weakest performers among Canadian oilfield services stocks.The Canadian oilfield services coverage group gained 41.5% year to date, while the Standard & Poor's/Toronto Stock Exchange Capped Energy Index advanced 53.8% over the same period, RBC said.The Western Canadian Sedimentary Basin added six rigs over the week, putting activity 30 rigs above 2025 levels and 25 above the five-year average.Private operators increased their rig count by three, while large exploration and production companies producing more than 75,000 barrels of oil equivalent per day added four rigs.Montney operators reduced activity by one rig to 36, led by ARC Resources with six rigs, Ovintiv (OVV) with five and Whitecap Resources with four rigs, RBC said.Montney drillers saw Precision Drilling lead with 17 rigs, or 47% of the total, followed by Ensign Energy with nine rigs, or 25%, and Savanna Energy with four, or 11%.Duvernay operators increased activity by one rig to 15, with Paramount Resources and Whitecap Resources each running three rigs and Artis Exploration operating one.Duvernay drillers included Ensign Energy with four rigs, or 27% of the total, while Akita Drilling and Precision Drilling each operated three rigs, representing 20% apiece.Oil Sands operators cut activity by three rigs to 10, with Canadian Natural Resources (CNQ) running three rigs and Cenovus Energy (CVE) and CNOOC operating two each.Oil Sands drillers saw Precision Drilling operate nine rigs, or 90% of the total, while Ensign Energy accounted for the remaining one rig, or 10%.Heavy Oil operators added five rigs to reach 59, with Canadian Natural Resources running nine, Cenovus Energy eight and Spur Petroleum seven rigs.Heavy Oil drillers included Precision Drilling with 26 rigs, or 44% of the total, followed by Ensign Energy with nine, or 15%, and Savanna Energy with seven, or 12%.RBC's Canadian exploration and production analysts forecast $6.7 billion and $7.4 billion in pre-dividend free cash flow for 2026 and 2027, respectively, at futures-strip pricing.Operators should reinvest 65% of cash flow in 2026 and 63% in 2027, compared with a five-year trailing average of 63%, according to RBC.Price: $87.33, Change: $-2.14, Percent Change: -2.39%

Stifel Nicolaus Initiates Coverage on Ovintiv With Buy Rating, $92 Price Target

Ovintiv Inc (OVV) has an average rating of buy and mean price target of $72.81, according to analysts polled by FactSet.

Ovintiv Details $460 Million of Year-to-Date Acquisitions

Ovintiv (OVV) has entered into more than 60 transactions so far in 2026, leading to the addition of around 41,000 net acres of land across its Montney and Permian assets for roughly $460 million, the company said Wednesday.The transactions will add 240 net 10,000-foot equivalent well locations to the company's drilling inventory.Ovintiv is buying the assets at a valuation of about $11,000 per net acre, and between $1.3 million and $1.7 million per well location, it said.The company expects the remaining deals to close before the end of 2026.

WCSB Rig Count Rises to 224, Canadian Oilfield Services Stocks Fall 4%, RBC Says

The Western Canadian Sedimentary Basin rig count rose 1 week-over-week to 224, while Canadian oilfield services stocks fell 4%, RBC Capital Markets said Tuesday.Canadian oilfield services stocks declined 4% over the week, with Precision Drilling (PDS) down 2%, Trican Well Service down 2.3% and Calfrac Well Services down 2.7%.The weakest performers were Ensign Energy Services, down 5%, Pason Systems, down 5.2%, and Enerflex (EFXT), down 9.5%. RBC's Canadian oilfield services coverage group gained 31.3% year-to-date versus 51.4% for the S&P/TSX Capped Energy Index.RBC said the WCSB count stood at 39 rigs above 2025 levels and 31 rigs above its five-year average, with the Q3 average at 223, compared with RBC's estimate of 201.Private-company rig counts increased by 2 week-over-week, while large exploration and production operators producing more than 75,000 barrels of oil equivalent per day added 1 rig.Montney activity held at 41 rigs, with ARC Resources operating 7 rigs, Ovintiv (OVV) 6 rigs and Tourmaline Oil 5 rigs.Montney drillers included Precision Drilling (PDS) with 22 rigs, or 54% of the total, Ensign Energy with 9 rigs, or 22%, and Savanna Energy with 3 rigs, or 7%.Duvernay activity increased 2 rigs over the week to 14, with Whitecap Resources operating 3 rigs, Paramount Resources 2 rigs and Artis Exploration 1 rig, according to RBC.Drilling activity in Duvernay included 4 rigs from Ensign Energy and 4 rigs from Precision Drilling, each representing 29% of the total, while Akita Drilling operated 2 rigs, or 14%.Southeast Saskatchewan gained 1 rig over the week to 18, with Tundra Oil & Gas operating 4 rigs, Saturn Oil & Gas 3 rigs and Whitecap Resources 3 rigs.Drilling contractors in Southeast Saskatchewan included Stampede Drilling with 8 rigs, representing 44% of the total, followed by Ensign Energy with 5 rigs, or 28%, and Betts Drilling with 2 rigs, or 11%.Heavy Oil activity fell 2 rigs over the week to 57, with Canadian Natural Resources (CNQ) operating 11 rigs, Spur Petroleum 7 rigs and Tamarack Valley Energy 5 rigs.Precision Drilling led Heavy Oil drilling with 23 rigs, or 40% of the total, followed by Ensign Energy Services with 8 rigs and Savanna Energy Services with 7 rigs.RBC's Canadian E&P analysts forecast that companies under coverage will generate $6.5 billion in pre-dividend free cash flow in 2026 and $7.1 billion in 2027, based on the futures strip.Operators are expected to reinvest 66% of cash flow in 2026 and 64% in 2027, compared with a five-year trailing average reinvestment rate of 63%.

Higher Oil Prices Lift US E&Ps, Fuel M&A Discussions, RBC Says

US oil producers are using higher crude prices to strengthen shareholder returns and debt plans as merger interest grows, RBC Capital Markets said in a Friday note.Oil prices reached a three-week high of $87 per barrel after President Donald Trump announced a "crushing economic operation" against Iran, RBC said.Despite higher prices, public US producers have shown little interest in sharply increasing output because structural demand growth remains limited.Instead, stronger oil prices have prompted producers to focus on debt repayment and shareholder returns, while some companies are also considering opportunistic hedging strategies.Trump also signaled potential support for reviving the Keystone XL pipeline, which could transport 830,000 barrels per day of heavy crude from Canada and the Bakken to Nebraska pipeline facilities before reaching Gulf Coast refineries.RBC said uncertainty remains over how Keystone XL would compete with rising Venezuelan crude volumes at US refineries as US producers prepare to sign supply contracts with Venezuela's state-owned oil company.Over the week, oil-weighted exploration and production companies gained 10%, while gas-weighted exploration and production companies rose 2%; large-cap and small- to mid-cap producers each advanced 7%, RBC saidThe SPDR S&P Oil & Gas Exploration & Production ETF rose 5%, while WTI gained 6% and Henry Hub natural gas increased 1% over the week, according to RBC.Merger discussions remained a key investor theme, with Exxon Mobil (XOM), Chevron (CVX), APA (APA), ConocoPhillips (COP), Diamondback Energy (FANG), Devon Energy (DVN) and EOG Resources (EOG) cited as potential buyers or targets.Antero Resources (AR), EQT (EQT), Ovintiv (OVV), Matador Resources (MTDR), Permian Resources (PR) and Infinity Natural Resources (INR) were also among the names investors identified in merger discussions, RBC said.Generalist investor interest in energy increased as WTI approached $90/bbl, while investors also raised questions about budgets and rising oilfield-services costs at higher crude prices, RBC said.Near-term catalysts include Devon Energy's plans to sell assets, Expand Energy's (EXE) new chief executive, and Tamboran Resources' (TBN) first gas sales.Price: $166.00, Change: $-0.15, Percent Change: -0.09%

Ovintiv Insider Sold Shares Worth $490,920, According to a Recent SEC Filing

Rachel Maureen Moore, Executive Vice President, Corporate Services, on August 12, 2026, sold 7,753 shares in Ovintiv (OVV) for $490,920. Following the Form 4 filing with the SEC, Moore has control over a total of 72,530 common shares of the company, with 72,530 shares held directly.SEC Filing:https://www.sec.gov/Archives/edgar/data/1792580/000119312526352577/xslF345X05/ownership.xml

Canadian Oilfield Services Stocks Slip as Rig Activity Eases, RBC says

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%

Canadian Oilfield Services Stocks Slip as WCSB Drilling Activity Climbs, RBC Says

Canadian oilfield services stocks fell 5% over the past week even as drilling activity in the Western Canadian Sedimentary Basin climbed further above historical levels, RBC Capital Markets analysts said in a note on Tuesday.The WCSB rig count rose by six week over week to 227, up 40 rigs from a year earlier and 35 above the five-year average. The Q3 average of 220 rigs is well ahead of RBC's forecast of 201.Private operators accounted for most of the increase, adding five rigs during the week, while large exploration and production companies producing over 75,000 barrels of oil equivalent per day added two.Montney activity increased by four rigs to 39, led by ARC Resources (ARC) and Ovintiv (OVV) with six rigs each, followed by Tourmaline Oil with five. Precision Drilling (PDS) remained the largest contractor in the play with 21 rigs, or 54% of the total.Heavy oil drilling also rose by four rigs to 68, led by Canadian Natural Resources (CNQ) with 13 rigs and Cenovus Energy (CVE) with 10. Duvernay activity edged up one rig to 18, while oil sands drilling slipped by two rigs to six.Despite stronger drilling activity, Canadian oilfield services stocks under RBC coverage declined 5% during the week.CES Energy Solutions posted the smallest loss, down 1.2%, followed by Calfrac Well Services, down 2.7%, and Pulse Seismic, down 3.7%.Trican Well Service, Precision Drilling (PDS) and Enerflex (EFXT) were the weakest performers, falling 6.5%, 7.4% and 9.8%, respectively.RBC's Canadian oilfield services coverage group has gained 28.7% year to date, compared with a 41.3% gain for the S&P/TSX Capped Energy Index.The bank forecast Canadian exploration and production companies under its coverage will generate pre-dividend free cash flow of $7.2 billion Canadian dollars ($5.12 billion) in 2026 and $7.8 billion in 2027, while reinvesting 64% and 62% of cash flow, respectively.

Energy Stocks Poised for Gains as Oil, Gas Outlook Improves, UBS Says

UBS maintained its bullish outlook for oil and natural gas, saying it expects 2027 prices to top what the current futures price would suggest even as volatility prompted it to stress-test energy stocks under multiple price scenarios, the bank said in a note on Tuesday.The analysis looked at oil prices ranging from $55-$65 per barrel for Brent crude and corresponding WTI prices of about $51-$61/bbl, along with natural gas prices between $2.75 and $4.25 per million British thermal units.UBS assumed companies would keep spending and production levels unchanged across all scenarios.UBS said current share prices for US oil and gas producers imply investors are expecting WTI crude prices in the low $60s/bbl and natural gas prices of about $3.50/MMBtu in 2027.In a scenario where Brent crude averages $75/bbl and natural gas averages $3.75/MMBtu, UBS believes the sector appears undervalued. Based on historical valuation levels, the bank estimates energy stocks could have over 20% upside.The bank also said energy company valuations are highly sensitive to changes in commodity prices. A $10/bbl move in oil prices and a $0.50 change in natural gas prices would have a significant impact on companies' cash flow and valuations.UBS added that if oil prices fall below $60/bbl and natural gas prices below $3/MMBtu many producers would likely reduce drilling activity and production.Despite higher oil prices since the recent conflict began, energy stocks have lagged the broader market. The S&P 500 Energy Index has gained 8% but has underperformed the broader S&P 500 by about 3 percentage points.Front-month WTI crude prices have risen 22%, while contracts for 2027 delivery are up 15%. Longer-dated natural gas prices, however, have fallen 10%.Among the companies UBS follows, SM Energy (SM) and Chord Energy (CHRD) have posted the strongest gains since the conflict began, while Liberty Energy (LBRT), Comstock Resources (CRK) and Gulfport Energy (GPOR) have been the weakest performers.Smaller and mid-sized oil producers have generally outperformed their larger peers, UBS said.UBS maintained its preferred exploration and production stocks as Ovintiv (OVV), Devon Energy (DVN) and Antero Resources (AR), while naming National Energy Services Reunited (NESR) as its top pick among oilfield services companies.Price: $29.40, Change: $-0.90, Percent Change: -2.97%

UBS Adjusts Price Target on Ovintiv to $74 From $71, Maintains Buy Rating

Ovintiv Inc (OVV) has an average rating of buy and mean price target of $72.81, according to analysts polled by FactSet.Price: $60.04, Change: $-0.04, Percent Change: -0.07%

Global Oil Prices Retreat as US-Iran Ceasefire Eases Supply Fears, TPH Says

Global oil prices pulled back from a spike late last week, as easing geopolitical tensions following a pause in direct US-Iran strikes outweighed fresh friction in the Bab el-Mandeb Strait and ongoing disruptions to key Middle Eastern trade routes, according to TPH Energy Research in a Monday note.Matt Portillo, analyst at TPH Energy, said Brent crude futures hovered at about $88.20 per barrel, retreating from a peak of $96.80/bbl hit on Friday.The pullback follows optimism surrounding potential peace talks and indications that further immediate escalation has been averted.However, energy markets remain on edge. TPH analysts said that while US and Iranian officials have paused hostilities, Saudi-Houthi tensions escalated last week.The Houthis implemented a naval blockade in the Bab el-Mandeb Strait, targeted two Saudi oil tankers, and launched strikes at Saudi oil infrastructure, which were successfully defended, following a retaliatory strike by Riyadh.Flows through key regional arteries remain complicated. Transits through the Strait of Hormuz are significantly depressed, and about 4 to 4.5 million barrels per day of Yanbu oil exports must be rerouted.TPH said two Chinese tankers laden with Saudi crude recently managed to transit the Strait, market participants are grappling with logistical bottlenecks, as fully laden Very Large Crude Carriers are unable to pass through the Suez Canal, forcing alternative routes that more than double transit times.Portillo said as the corporate earnings season kicks into gear, energy executives and investors are parsing industry results for deeper insights into the macroeconomic landscape across upstream and oilfield services sectors.On the oilfield services front, recent commentary from Halliburton (HAL) and Liberty Energy (LBRT) indicates that analyst expectations for pressure pumping price gains were overly optimistic, pointing instead to more modest growth.Meanwhile, upbeat commentary on deepwater markets from Halliburton and SLB (SLB) continues to reinforce a broader industry preference for international exposure over North American onshore Lower 48 plays.On the upstream gas front, early results from EQT (EQT), Range Resources (RRC), and Ovintiv (OVV) highlighted a growing focus on longer-term supply and demand dynamics through the coming decade.Though near-term market fundamentals face lingering headwinds looking toward 2027, long-only investor interest has begun to pick up.TPH analysts highlighted that both EQT and RRC have maintained a prudent stance on supply growth as new demand sources develop. A primary catalyst for outperformance last week was EQT's announcement of a 10-year supply agreement to power generation facilities, linked to PJM power market pricing rather than local in-basin benchmarks.Price: $32.58, Change: $-0.78, Percent Change: -2.35%

Ovintiv Positioned for Valuation Upside as Portfolio Strength, Returns Improve, RBC Says

Ovintiv (OVV) is positioned for potential valuation expansion as its streamlined portfolio, strong execution, resource depth and improving shareholder returns create a favorable setup, RBC Capital said in a Friday note.The analysts said Ovintiv's Q2 performance supported its outlook, citing production of 614,600 barrels of oil equivlent per day, Permian outperformance, net debt below $3 billion and a 5,000-barrel-per-day increase in its Permian oil and condensate production run rate to about 125,000 barrels per day.Ovintiv plans to return more than 60% of free cash flow to shareholders through dividends and share buybacks in 2026, with continued strong free cash flow generation expected from its asset base and operational execution, according to the note.RBC said the company trades at a discount to peers despite its balance sheet, inventory depth and shareholder returns, with potential S&P/TSX Composite Index inclusion offering additional demand support.RBC maintained its outperform rating on the stock and raised its price target to $85 from $70.Ovintiv shares were down over 2% in Monday trading.Price: $61.43, Change: $-1.70, Percent Change: -2.69%

RBC Raises Price Target on Ovintiv to $85 From $70, Keeps Outperform Rating

Ovintiv (OVV) has an average rating of buy and mean price target of $72.12, according to analysts polled by FactSet.

Ovintiv Price Target Raised to $85 at RBC

RBC Capital Markets raised its price target on Ovintiv (OVV.TO, OVV) to $85 from $70.Analyst Greg Pardy maintained an Outperform rating on the dual-listed natural gas company following its Q2 results."In our eyes, Ovintiv's streamlined portfolio, resource depth and enhanced shareholder returns point toward relative multiple expansion and continued share price appreciation," Pardy said in a note to clients."Ongoing solid performance, like what we saw in the second-quarter, along with potential S&P/TSX index inclusion, could accelerate this dynamic," the analyst said.

Ovintiv Q2 Production Edges Lower, Lifts Full-Year Output Outlook

Ovintiv (OVV) reported Q2 earnings Thursday, showing total production of 614,600 barrels of oil equivalent per day, compared with 615,300 boe/d a year earlier.Oil production dropped to 123,000 b/d for the quarter ended June 30, down from 142,000 b/d a year earlier, the company said.Natural gas production rose to 1,959 million cubic feet per day for the quarter ended June 30, up from 1,851 MMcf/d in the year-ago period.Oil and plant condensate production edged down to 205,800 b/d, compared with 211,200 b/d.Plant condensate output increased to 82,800 b/d, up from 69,200 b/d for the same quarter last year, while other natural gas liquids production declined to 82,400 b/d, down from 95,500 b/d a year earlier.Total liquids production fell to 288,200 b/d from 306,700 b/d in the year-ago quarter, according to the company.Ovintiv raised its full-year 2026 production outlook to 630,000 boe/d to 645,000 boe/d while keeping planned capital investment unchanged at $2.25 billion to $2.35 billion.The full year guidance includes 210,000 b/d to 212,000 b/d of oil and condensate, 83,000 b/d to 85,000 b/d of natural gas liquids and 2.025 Bcf/d to 2.075 Bcf/d of natural gas.In the Permian, Ovintiv produced 231,000 boe/d in Q2, with liquids accounting for 78% of volumes, and turned 38 net wells in line. The company plans to bring 125 to 135 net wells online.Montney production averaged 374,000 boe/d in the second quarter, with liquids making up 27% of output, while the company turned 40 net wells in line. Ovintiv plans to bring 130 to 140 net wells online this year.

Ovintiv Q2 Adjusted Earnings Rise

Ovintiv Inc (OVV) reported Thursday Q2 adjusted earnings of $491 million, up from $265 million a year earlier.

Earnings Flash (OVV) Ovintiv Posts Q2 Adjusted EPS $1.74, vs. FactSet Est of $1.94

Ovintiv Well Performance Continues to Outpace 2025 Type Curve, UBS Says

Ovintiv (OVV) well performance in the Midland and Montney continues to trend above the 2025 type curve, supporting oil and condensate production at the midpoint of guidance despite headwinds from royalty volumes and plant turnarounds, UBS said in a note emailed Monday.UBS said volumes should climb back toward the higher end of guidance in H2, with potential upside if Permian volumes hold near recent levels.UBS said Ovintiv's balance sheet has improved significantly following debt reduction from Anadarko divestiture proceeds, which should allow the company to accelerate its share buyback pace and sustain elevated shareholder returns into next year.UBS maintained its buy rating and decreased the price target to $71 from $75.Price: $58.55, Change: $+0.76, Percent Change: +1.32%

Energy Stocks Remain Undervalued Despite Long-Term Oil, Gas Outlook, UBS Says

UBS maintained a positive long-term outlook for crude oil and natural gas, saying energy stocks remain undervalued despite improving commodity fundamentals, the firm said in a note on Monday.UBS continues to expect stronger 2027 crude oil and natural gas prices than implied by current forward strips of $71 per barrel for West Texas Intermediate and $3.35 per million British thermal units for Henry Hub.The firm assessed producers across scenarios ranging from $55-$65/bbl Brent, $51-$81/bbl WTI and $2.75-$4.25/MMBtu Henry Hub.Using an 8% free cash flow-to-enterprise value yield and a 5.5x enterprise value-to-EBITDA sector midpoint, UBS estimates exploration and production stocks currently reflect $60 WTI and $3.50 Henry Hub for 2027.Under a $75 Brent and $3.75 Henry Hub scenario, oil producers would generate an average 12.2% free cash flow-to-enterprise value yields and trade at 3.9x enterprise value-to-EBITDA.Gas producers, excluding Comstock Resources (CRK), would generate an average 11.5% free cash flow-to-enterprise value yield and trade at 4.6x enterprise value-to-EBITDA, UBS said.The same commodity deck would leave year-end 2027 net debt-to-EBITDA at about 0.2x to 0.3x if companies maintain current capital return programs.UBS said those valuations remain below the historical 4.5x to 6.5x range, implying more than 20% upside to the 5.5x midpoint.A $10/bbl move in crude oil and a $0.50/MMBtu change in Henry Hub prices would shift average free cash flow-to-enterprise value yields by 450 to 480 basis points.Enterprise value-to-EBITDA multiples could move 0.5x to 0.7x or more, particularly for gas producers, UBS said.UBS kept capital spending and production assumptions unchanged, although WTI prices below $60/bbl and Henry Hub prices below $3/MMBtu would likely prompt exploration and production companies to reduce both investment and output.Since the conflict began, the S&P 500 Energy Index has gained 1.3% but has trailed the broader S&P 500 by 8%. During the same period, front-month WTI has risen 16%, the 2027 WTI forward strip has gained 15%, while the 2027 Henry Hub strip has fallen 10.3%, UBS said.UBS said energy-sector valuations have weakened since the conflict began despite stronger long-term oil prices, with APA (APA) and Chord Energy (CHRD) leading gains, while Comstock Resources, Weatherford International (WFRD) and Gulfport Energy (GPOR) have posted the weakest performance.UBS continues to favor Ovintiv (OVV), Devon Energy (DVN) and Antero Resources (AR) among exploration and production companies, while National Energy Services Reunited remains its top oilfield services pick.Price: $12.87, Change: $-0.37, Percent Change: -2.79%

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

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%