Key Takeaways
Second quarter 2026 earnings commentary showed a broader industry response to improved market conditions, with activity increasing across parts of E&P and OFS while capital discipline and returns remained central to spending decisions.
International unconventional development gained momentum as operators and service companies increasingly deployed North American shale technologies, equipment, and operating practices in markets such as the UAE, Argentina, Algeria, Kuwait, and Saudi Arabia.
Deliverability is becoming a more important strategic differentiator as natural gas and power demand grows, increasing the value of transportation capacity, grid access, and the ability to connect supply reliably with LNG, power generation, and other large-load customers.
In our ongoing review of quarterly earnings calls across the Exploration and Production (“E&P”) and Oilfield Services (“OFS”) sectors, second quarter 2026 commentary reflected an industry moving further from positioning toward execution. The supply disruptions and stronger commodity backdrop that changed the tone of first quarter calls continued to influence capital allocation, but the second quarter provided more tangible evidence of how companies are responding.
Across the calls, several themes stood out. U.S. activity continued to improve, although producers remained focused on capital efficiency rather than unconstrained growth. International unconventional development gained momentum as operators and service companies increasingly applied North American shale technologies abroad. Finally, growing natural gas and power demand increased the importance of physical market access. Together, the commentary suggests that the industry response that began in the first quarter is broadening, but remains governed by returns, existing capacity, and the ability to efficiently connect supply with end-market demand.
Selective Growth Broadens, Discipline Remains Intact
Management teams continued to frame growth through the lens of returns and capital efficiency rather than production for its own sake. The shift that began in the first quarter appears to be carrying through into operating plans, while companies continue to evaluate incremental spending through the lens of returns and capital efficiency.
Diamondback remained one of the clearest examples of this shift:
“I do think that helps us get some confidence that there’s a bid for — a longer-term bid for oil to refill those inventories and meet global demand. So in general, I think that does skew us towards the decision to grow production versus hold production flat.”
—Matthew Kaes Van’t Hof, CEO, Diamondback Energy
On the services side, Halliburton described a North American market where activity and pricing are beginning to improve:
“The market is in a recovery, and I am encouraged by the shift in trajectory. Activity is up, pricing is improving and our playbook works.”
—Jeffrey Shannon Slocum, EVP & COO, Halliburton
Select Water Solutions also pointed toward further activity as recently added drilling capacity eventually moves into completions:
“There's going to be a ramp in the amount of frac fleets running… how they complete those wells are going to be higher intensity. It's going to be a really good opportunity for pretty well all points of Select.”
—John Schmitz, President, CEO & Chairman, Select Water Solutions
EOG was a notable exception to the broader activity response. Management maintained its 2026 plan and reiterated, rather than expanded, the low-single-digit oil growth outlook previously discussed in its longer-term scenario:
“If this continues to be the case, I would expect our plan for next year to really be reflective of our 3-year scenario, which basically reflects a low single-digit oil growth… I would say that we continue to preserve a lot of optionality.”
—Ezra Yacob, CEO & Chairman, EOG Resources
Management teams entered the second quarter with greater willingness to respond to improved market conditions, and that response became more visible across both E&P and OFS commentary. The pace was uneven, however, with some operators increasing activity while others, including EOG, maintained existing plans and preserved flexibility around future growth.
International Unconventionals Gain Traction
Second quarter commentary pointed to increasing momentum in international unconventional development as operators and service companies applied technologies and operating practices developed in North America to resource opportunities abroad. While international growth has been a recurring theme in prior quarters, the discussion this quarter became more specific around unconventional development itself, with several companies highlighting active projects, equipment deployment, and early operating results.
EOG provided one of the clearest operator-side examples through its exploration program in the UAE:
“Early well results are exceeding our expectations during the natural flow period. There is still meaningful work ahead in the UAE … but we are extremely encouraged by what we are seeing in the early days of this important project, confirming that EOG's competitive advantage is not confined to a specific geographical location.”
—Ezra Yacob, CEO & Chairman, EOG Resources
Halliburton similarly highlighted the growing reach of unconventional development outside North America:
“Unconventionals have been proven to be a successful way to deliver oil and gas. And now the rest of the world is doing more of it, and we plan to lead there.”
—Jeffrey Allen Miller, Chairman, President & CEO, Halliburton
The company’s activity now spans several international unconventional markets:
“Argentina, Algeria, Kuwait, Saudi, UAE, we have frac spreads in all of those locations today doing unconventional work.”
—Jeffrey Shannon Slocum, EVP & COO, Halliburton
NOV described a similar dynamic from the equipment side:
“We've always asserted that economically developing unconventional resources outside North America would require a lot of the same high-spec equipment and technologies that NOV developed during the U.S. shale revolution. This is exactly what we're now beginning to see.”
—Jose Bayardo, President, CEO & Chairman, NOV
Taken together, the calls suggest that international unconventionals are becoming a more tangible component of the growth outlook for internationally exposed operators and service providers. The opportunity remains early-stage in many regions, but the quarter provided stronger evidence that the technologies, service intensity, and operating models developed in U.S. shale are beginning to find broader applications overseas.
Deliverability as a Strategic Differentiator
First quarter calls emphasized infrastructure and integrated capabilities as sources of competitive advantage. By the second quarter, commentary emphasis had shifted towards the ability to connect supply with end markets as a source of competitive advantage. Across natural gas and power markets, resource availability was often less of a constraint than transportation, interconnection, and access to reliable demand. That dynamic is beginning to influence development plans, commercial agreements, and infrastructure investment.
Antero highlighted that change in Appalachia, where management described a growing number of direct inquiries from end users seeking supply at specific locations and on specific timelines:
“We’re quite enthused by what we’re seeing on the demand pull... it’s now become, hey, can you deliver us 300 million a day in this area? Can you deliver us 200 million a day in this area that we need by this period of time.”
—Brendan E. Krueger, CFO, Antero Resources
Diamondback discussed a similar dynamic in the Permian, where rising associated gas production is increasing the importance of access to multiple downstream markets:
“Our gas production continues to outperform expectations... and therefore, we need to have more contracted space to more markets to be in the conversation when the LNG offtakers need supply.”
—Matthew Kaes Van’t Hof, CEO, Diamondback Energy
Solaris illustrated the same constraint from the power side, where extended grid interconnection timelines are directly influencing customer contracting behavior:
“In July, we expanded and extended our contract with one of our large energy customers who has been informed that the grid interconnect time is now 7 to 8 years away. They increased power capacity... and extended the term of the contract.”
—Amanda M. Brock, Co-CEO, Solaris Energy Infrastructure
Across these calls, the common thread was the growing value of physical access. As demand becomes more concentrated around LNG, power generation, and large-load customers, the ability to connect supply with those markets is influencing contract structures, infrastructure investment, and development decisions. Deliverability is becoming a more important part of the commercial equation alongside resource quality itself.
Conclusion
Second quarter commentary suggested that the industry’s response to a more constructive market backdrop is becoming more tangible. Activity is broadening, but operators continue to preserve flexibility and evaluate incremental spending through the same return-focused framework that has shaped recent capital allocation. At the same time, the North American unconventional model is increasingly being applied in international markets, while infrastructure constraints are placing greater emphasis on the ability to physically connect supply with end users.
Mercer Capital has its finger on the pulse of the upstream market. As the oil and gas industry evolves through pivotal times, we take a holistic perspective to bring you thoughtful analysis and commentary regarding the full hydrocarbon stream. This includes E&P operators, mineral aggregators, and ancillary service companies crucial to starting and maintaining the stream’s flow. For more targeted energy sector analysis to meet your valuation needs, please contact a professional on the Mercer Capital Oil & Gas Team for further assistance.