A drilling rig that has spent a year in a yard does not go back to work for free. Crews have to be rehired and retrained, equipment recertified, and the rig moved and rigged up — and for the first months the contract pays a rate negotiated before any of that was known. Precision Drilling, Canada's largest land contract driller with 227 rigs across Canada, the US and the Middle East, put a number on it last month: seven US reactivations, each carrying $1,500 to $2,000 a day of extra cost. Its US daily operating margin fell to $6,210 from $9,290 three months earlier. Guidance for the current quarter is $7,000 to $8,000, and management is only targeting something approaching $10,000 by year-end.

That is the tension across this group. Contract drillers are paid a day rate per rig per working day against a largely fixed daily cost, so activity and price both showed up in the June quarter — and profit mostly did not.

Activity up, profit down

Helmerich & Payne, which drills for oil and gas producers with its FlexRig fleet and has been the industry's premium-rate operator, averaged 142 rigs in North America in its fiscal third quarter and exited at 147. It achieved roughly $18,700 of direct margin per rig-day, more than $1,000 better than the prior quarter, even while reactivating ten rigs. Yet revenue of $1.035bn was down 0.6% from a year earlier and gross margin fell to 12.0% from 15.1%. The gap is the $1.97bn KCA Deutag acquisition closed in January 2025, which took its Middle East fleet from 12 rigs to 88 and brought lower-margin international work plus the debt that funded it. The company reported a $6.1bn backlog and 95% super-spec utilization, generated $98m of free cash flow, repaid a $400m term loan early and is steering toward about 1x net debt to EBITDA.

Nabors Industries, which runs land and offshore rigs and sells drilling software and rig equipment, is the clearest case of motion without money. Its Lower 48 daily revenue rose $902 to $33,600, but daily margin rose $107, to $13,800. Revenue of $816.9m fell 1.9% year on year and the company lost $29.1m. It raised full-year EBITDA guidance to $920-930m — against capex of $710-730m and adjusted free cash flow of just $20-30m. Nabors also disclosed that Saudi Arabia has 196 land rigs running, 28 short of the early-2024 peak; the international recovery is partial.

Precision set a company record of 61 active Canadian rigs and grew its customer count from 25 to 30, but Canadian daily margins slipped to C$13,300 and net income swung to a $1.2m loss from $16.3m. It also said two or three Northeast US gas customers paused programmes — awkward for the story that data-center power demand is pulling gas rigs back to work. And it carries a Canada Revenue Agency reassessment with maximum exposure of C$155m, about 14% of its market value, with roughly C$40m possibly payable within a year.

The exception

Patterson-UTI Energy, the largest combined US onshore drilling and pressure-pumping company and owner of the Ulterra drill-bit business, is the one that converted. Gross margin reached 22.9% against 2.3% a year earlier on flat revenue of $1.228bn. It averaged 92 rigs and guided to about 100, with drilling gross profit stepping from roughly $114m to about $145m, and says high-quality rigs outside the Permian are essentially sold out. Completions pricing is still down about 30% over three years, which management expects to claw back. BofA raised its rating to buy with a $16 target after a decline this year; the stock trades at $11.37.

One session did the work

All four gained over the past month, averaging about 16%. Strip each name's two best sessions and that average falls to roughly 1%, with Patterson-UTI and Precision turning negative. The same date — 10 August — sits in all four lists, the day crude ran toward $82.40 a barrel on the Strait of Hormuz blockade and an International Energy Agency warning of the widest supply deficit in five years. The other spike was Helmerich & Payne's 6 August earnings. Over three months the group is down about 2%, and only Helmerich & Payne has made a new high.

The drilling data does not corroborate a demand surge either: the Baker Hughes US count was 588 rigs, up one on the week, with gas rigs at 126, below February's 134.

What the prices assume

Helmerich & Payne is the most demanding: 7.65x trailing EV/EBITDA, 1.72x book, and consensus of $1.48 for fiscal 2027 puts it at 29.8x. Its forward price-to-gross-profit of 10.63x sits above the trailing 10.54x — analysts expect gross profit to shrink. Patterson-UTI is 6.39x EV/EBITDA and 1.39x book, but 2027 consensus of $0.25 implies 44.9x. Nabors screens cheapest at 2.30x EV/EBITDA, a function of $1.39bn of equity beneath a large debt load, with only two analysts covering 2027. Precision is the only one below book, at 0.95x, on 12.3x forward earnings and a 7.9% trailing free-cash-flow yield.

The setup

Where it stands — Every driller added rigs and raised day rates last quarter; only Patterson-UTI expanded margin, and one oil session made the month. Would confirm — Precision's US daily margin printing at or above the $7,000-8,000 guided range next quarter. Would invalidate — Baker Hughes gas rigs falling back below 120 while day-rate guidance is trimmed. Watch next — Helmerich & Payne's fiscal fourth-quarter results, due November, against 145-151 North America rigs. Valuation — Helmerich & Payne 7.65x trailing EV/EBITDA and 29.8x fiscal 2027 earnings; Precision 0.95x book, 12.3x forward.