3 Oil & Gas Drilling Stocks With Strong Upside Potential

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markets open in 1h 58m S&P Futures 7,870.25 +14.50 +0.18% Dow Futures 52,127.00 +192.00 +0.37% Nasdaq Futures 30,754.25 -37.25 -0.12% Russell 2000 Futures 2,807.50 +7.40 +0.26% 10-Yr Bond 5.22 -0.02 -0.44% VIX 15.30 +0.03 +0.20% Gold 4,164.20 -13.10 -0.31% Bitcoin USD 83,353.00 +102.93 +0.12% Crude Oil Nov 26 95.65 +1.51 +1.60% US Private Equity 10,967.34 -1.52 -0.01% ADVERTISEMENT 3 Oil & Gas Drilling Stocks With Strong Upside Potential Nilanjan Choudhury May 27, 2026 7 min read CL=F NG=F PTEN HP NBR The Zacks Oil and Gas - Drilling industry appears to be entering a more constructive phase.

While producers are still cautious with capital spending, the broader demand picture is improving.

Tight oil supply, geopolitical uncertainty and rising energy-security needs could support future drilling plans.

Natural gas adds another layer of opportunity, as LNG exports, new power demand and AI-related electricity use point to steady long-term growth.

The industry is also benefiting from a shift toward better equipment.

Longer laterals, deeper wells and complex drilling programs require advanced rigs, automation and digital tools.

That gives well-equipped contractors a stronger pricing opportunity when customer activity picks up.

The group's solid Zacks Industry Rank and sharp outperformance over the past year add to the positive case.

The recovery may be gradual, but the outlook is clearly brighter.

In this improving setup, Patterson-UTI Energy PTEN, Helmerich & Payne HP and Nabors Industries NBR stand out as attractive drilling names to watch.

The Zacks Oil and Gas - Drilling industry consists of companies that provide rigs (or specialized vehicles) on a contractual basis to explore and develop oil and gas.

These operators offer drilling rigs (both land-based/onshore and offshore), equipment, services and workforce to exploration and production companies worldwide.

Drilling for hydrocarbons is costly and technically difficult, and its future primarily depends on contracting activity and the total number of available rigs at a given time rather than the price of oil or gas.

Within the industry, it's interesting to note that the volatility associated with offshore drilling companies is much higher than that of their onshore counterparts, and their share prices are more correlated to the price of oil.

Overall, oil and gas drilling stocks are among the most volatile in the entire equity market.

Oil Supply Tightness Can Lift Drilling Demand: Oil and gas drilling activity could improve if global supply stays tight.

Recent Middle East disruptions have made energy security a bigger concern and could keep oil markets supported.

When producers worry about future supply, they often need more wells to maintain or grow output.

shale may benefit because it can respond faster than many global projects.

That said, activity may not jump overnight.

Customers usually wait for clearer price signals before changing budgets, but the setup is becoming more supportive for drilling demand.

Natural Gas Has a Stronger Long-Term Growth Story: Natural gas is becoming a key demand driver for drillers.

LNG exports, new export facilities and rising electricity needs from data centers and AI are all adding to the long-term call on gas.

Investors should know that gas wells still need rigs, crews and related drilling services.

International gas development, especially in regions like the Middle East and Latin America, also supports activity.