Industry Insight Report: Drilling Oil and Gas Wells Q1-2026

The first quarter of 2026 brought cautious improvement to the drilling oil and gas wells industry. Activity levels strengthened from late 2025, but operators continued to balance new project opportunities against commodity price uncertainty, regulatory questions, and labor pressure.

For business owners, the market remains active but selective. Buyers are still interested in drilling and oilfield services companies with dependable crews, strong safety records, maintained equipment, and customer relationships tied to active basins.

Activity Improves, but Operators Stay Disciplined

Industry sentiment improved during Q1 as drilling activity showed signs of stabilization. Public data showed U.S. rotary rigs operating in the mid-500s during the quarter, reflecting a market that is not overheated but remains productive. Operators appear focused on disciplined capital deployment rather than broad expansion.

This matters for owners considering an exit. A more measured drilling environment can favor companies with consistent cash flow, diversified customer bases, and the ability to stay profitable through changing rig cycles. In Drilling Oil & Gas Wells M&A, buyers are looking closely at whether revenue is tied to repeat work or short-term project demand.

Employment Growth Returns

Vertical IQ reported that employment in drilling oil and gas wells increased 7.5% in March compared to a year ago. That rebound signals improving demand for labor and field capacity, even though the longer-term trend remains uneven.

Employment in the sector was still down 2.2% over the past ten years, compared with 11.3% growth in overall private employment. Over the past three years, industry employment declined 12.3%, while private employment grew 2.2%.

For sellers, this makes workforce stability a meaningful value driver. A trained team that can operate safely and consistently is difficult to replace, especially in a market where experienced labor remains limited.

Wage Pressure Continues

Vertical IQ also reported that average wages for nonsupervisory employees in support activities for oil and gas operations reached $37.95 per hour in March, up 2.8% from a year earlier. Over the past three years, wages grew 19.8%, outpacing overall private wage growth of 11.7%.

Rising labor costs can pressure margins, but they can also reinforce the value of efficient operations. Buyers will likely reward businesses that can manage payroll costs, retain skilled workers, and pass through cost increases when appropriate.

Texas Market Perspective

Texas remains central to the national drilling outlook, particularly across the Permian Basin and Gulf Coast energy corridor. For owners searching for a Drilling Oil & Gas Wells business broker Houston or evaluating a Drilling Oil & Gas Wells business valuation Texas, preparation is becoming more important as buyers scrutinize earnings quality, customer concentration, and equipment condition.

Outlook

Heading into Q2, the market appears balanced. Growth opportunities remain, but buyers are disciplined and sellers need to show operational resilience. Owners who want to Sell drilling oil & gas wells business Texas should use this period to review financials, document customer history, and understand how their company would be viewed in today’s acquisition market.

👉 Take the Sellability Assessment to see how prepared your business is for a future transition.

• Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).