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Industry Insight Report: Drilling Oil & Gas Wells Q3-2025

Drilling Oil & Gas Wells Industry Insight Report Cover

Support is building for long-overdue permitting reform in the oil and gas sector, as industry leaders rally behind the proposed SPEED Act. This quarter, we’ve seen a blend of cautious optimism and persistent challenges in the drilling market. At Lion Business Advisors, our clients are navigating shifting regulatory winds, with strong buyer interest continuing for oilfield services companies that demonstrate operational efficiency and regulatory compliance.

Key Trends Impacting the Sector

A coalition of eight major energy industry associations, representing over 80% of U.S. oil and gas production, announced their support in July for the bipartisan SPEED Act, which aims to overhaul the federal permitting process. The bill proposes reforms to the National Environmental Policy Act (NEPA), aiming to reduce redundant environmental reviews, set clear timelines, and streamline approvals for new projects. If passed, this legislation could accelerate drilling activity and reduce delays that have historically added cost and uncertainty to new developments. Sellers with well-positioned assets may benefit from heightened buyer interest in advance of this potential policy shift.

Employment and Wage Trends

According to Vertical IQ, employment in the drilling oil and gas wells sector rose 7.5% in July 2025 compared to a year earlier. Despite this uptick, the industry has contracted over the longer term, with employment down 28.5% over the past decade, far below the 13.0% increase in overall private employment. Over the past three years, drilling employment fell 6.3%, signaling volatility in the labor market. Meanwhile, average hourly wages for nonsupervisory workers in support roles rose to $35.81, up 3.6% year-over-year. Wages have grown 39.7% over the past decade, lagging slightly behind overall private sector wage growth. For buyers, these labor trends point to potential upward cost pressure, but also highlight the value of experienced teams already in place.

Industry Forecast

Vertical IQ forecasts a 5.45% compound annual growth rate (CAGR) for U.S. oil and gas well drilling companies from 2025 to 2029, outpacing the broader economy. This suggests that, despite near-term regulatory uncertainty and commodity price fluctuations, long-term fundamentals remain strong. Texas-based drilling operators are expected to play a central role in this expansion.

M&A Market Outlook

The M&A environment in oilfield services is mixed, neither a true buyer’s nor seller’s market, but active nonetheless. Strategic acquirers are targeting niche drilling and support companies with established customer contracts, compliance track records, and strong management teams. Private equity remains selective but is returning to energy services in cases where operational synergies or regional roll-ups are viable. Individual buyers with industry experience continue to pursue SBA-financed deals in the lower middle market. Companies with low customer concentration, modern equipment, and stable cash flow are commanding higher multiples in today’s market.

As regulatory reforms take shape and energy policy continues to evolve, sellers may find increased strategic interest in the months ahead. Owners considering an exit in the next 1–3 years should evaluate market timing while demand remains steady.

Thinking About Exit Timing?

With wage inflation, political uncertainty, and shifting capital cycles all in play, now is the time for owners in the oil & gas services sector to assess their strategic options. Whether you’re considering a sale or planning for a future exit, understanding your company’s market value is a critical first step.

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  • 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).