Production Services at $109 WTI: RPC's Margin Squeeze and Why Newpark Left the Building

RES | NYSE | NPKI | NYSE | Source data: RPC Inc. Q1 2026 earnings release (8-K filed May 7, 2026), RPC Inc. Q1 2026 10-Q (filed May 8, 2026), NPK International Q1 2026 earnings release (8-K filed April 30, 2026), Baker Hughes U.S. rig count data week ending May 8, 2026, FRED WTI daily price series

Executive Summary

WTI crossed $110 this week. Production services companies got the news and waited for price increases that did not come.

RPC Inc. (NYSE: RES) reported Q1 2026 revenues of $454.8 million, up 36.6% year-over-year, while operating income fell to $2.6 million from $12.4 million in Q1 2025. The revenue line tells a story of acquisition growth. The operating income line tells the truth about oilfield pricing power.

Then there is NPK International (NYSE: NPKI). The company formerly known as Newpark Resources sold its oilfield fluids business in September 2024 and spent Q1 2026 reporting 19.2% operating margins and raising its full-year guidance — selling industrial mats to utility companies expanding the power grid, not drilling fluids to oilfield operators. NPK's Adjusted EBITDA margin in Q1 was 29.9%. RPC's was 11.8%. Same week. Same macro environment. Different end market. The Newpark exit from oilfield services is a verdict on production services pricing, and this week's data makes it quantifiable.

The Rig Count Frame

Baker Hughes released this morning: 548 active U.S. rigs, oil rigs at 410, up 2 on the week. Oil rigs are down 57 year-over-year. The total count is off 30 from this time last year.

Per RPC's own Q1 10-Q, the average U.S. rig count during Q1 2026 was 548 — flat sequentially from Q4 2025, and 6.8% below Q1 2025. WTI averaged $70.54 per barrel during Q1 2026 — the price environment when completions crews were dispatched and service contracts were negotiated. Oil at $109 today is irrelevant to contract pricing written in January. That lag is how the cycle works, and it explains why production services companies are still fighting for share in a market set during a $70 WTI world.

RPC CEO Ben Palmer said it plainly: "Industry concerns about the duration of higher commodity prices and price volatility are currently limiting any significant reevaluation of spending plans." Operators see $109 WTI but don't believe it holds, so they are not accelerating activity or opening wallets on service pricing.

RPC's Pintail Problem: Revenue Up, Margins Compressed

The Pintail acquisition added Cudd Energy Services pressure pumping and nitrogen operations and Thru Tubing Solutions downhole tools. The result: a revenue base that looks dramatically better year-over-year, but whose organic pricing dynamics tell a different story.

Q1 2026 vs. Q1 2025 segment performance:

Technical Services revenues: $434.3M vs. $311.8M (+39.3%) | Operating income: $16.0M vs. $14.0M

Support Services revenues: $20.5M vs. $21.0M (-2.7%) | Operating income: $0.4M vs. $2.7M (-85%)

Total revenues: $454.8M vs. $332.9M | Total operating income: $2.6M vs. $12.4M

Source: RPC Inc. Q1 2026 earnings release, May 7, 2026

Technical Services revenues grew $122.5 million year-over-year; operating income grew $2 million. The Pintail acquisition drove most of the top-line growth, but also added $7.3 million per quarter in non-cash acquisition-related employment costs. Corporate expenses rose $2.5 million year-over-year as the organization scaled. Adjusted EBITDA margin was 11.8%, down 110 basis points sequentially from Q4 2025.

RPC cited "unfavorable pressure pumping job mix" as a margin driver. That is oilfield-speak for less simulfrac work, which generates better revenue per crew than conventional single-well completions. At 548 average rigs with flat sequential activity, the high-intensity simulfrac utilization that supported frac company margins in 2024 is harder to access. Crews are working. The $20-per-foot premium for complex completions is not on the table in the same way.

Sidebar: The Simulfrac Margin Math

Simulfrac operations — fracking two or more wells simultaneously — require more equipment per job but generate substantially better revenue per crew day. When operators slow completions pacing or move to smaller pads, service companies lose access to those high-utilization jobs. With the U.S. rig count flat and operators cautious on incremental activity, the simulfrac intensity that drove OFS margin expansion in late 2024 is constrained. RPC's Technical Services reported operating income of $16M on $434M revenue (3.7% margin). In Q1 2025, on $312M revenue, it generated $14M (4.5% margin). More work, lower margins per dollar — the definition of commodity services in a pricing squeeze.

NPK International: The Exit That Explains Everything

In September 2024, Newpark Resources completed the sale of substantially all of its Fluids Systems segment. The company renamed itself NPK International and repositioned around industrial matting for utility and infrastructure customers. Q1 2026 results: revenue $75.1 million (+16% YoY), operating income $14.4 million (19.2% margin), Adjusted EBITDA $22.5 million (29.9% margin). Full-year guidance raised to $310-325 million revenue and $92-102 million Adjusted EBITDA.

The demand driver is the power grid build-out. CEO Matthew Lanigan cited "sustained strength in rental fleet utilization, improved pricing, and strong quoting activity" from utility customers building transmission infrastructure. NPK is now expanding manufacturing capacity 50% — a $40-45 million investment expected online by mid-2027 — to meet demand from the same AI data center and electrification wave driving natural gas demand upstream.

The former Newpark management made a clear capital allocation call: a drilling fluids business requiring chemical inventory management and brutal commodity pricing pressure from operators versus an industrial matting business with differentiated capabilities in large-scale transmission projects. Q1 2026 puts numbers on that decision. The oilfield services version of Newpark would be reporting 11-12% EBITDA margins today if the trend held. The utility infrastructure version reports 30%.

CIR Analysis: NPK International's transformation is the logical conclusion of a decade of production services margin erosion. When the best capital allocation move a completion fluids company can make is to exit completion fluids, that is the market telling you something. The company is not coming back. RPC is now effectively the primary remaining pure-play production services independent at meaningful scale — and its Q1 earnings show exactly what that means.

The Production Services Landscape After the Exits

ChampionX was absorbed into SLB's Production Systems segment when the acquisition closed late 2024. Newpark's oilfield entity is gone. That leaves RPC as the largest remaining independent voice on pure-play production services and completions. The Friday service beat that used to span four companies now has one primary subject that reports as a standalone entity.

The broader week reinforced the demand picture. Devon-Coterra closed Thursday — creating the largest single buyer of completion and production services in the Delaware Basin. Permian Resources hit investment grade. Larger, merged operators with consolidated procurement operations negotiate harder on service contracts and have more leverage to hold pricing flat or push it lower. The Devon-Coterra wireline and completion consolidation piece CIR published Thursday showed this dynamic in real time.

What To Watch

• RPC Q2 bidding activity — management flagged "increased bidding activity" and operators electing to maintain programs rather than cut. Whether that converts to actual contract repricing in Q2 is the signal to watch
• SLB Production Systems margins — ChampionX's production chemistry and artificial lift results now live inside SLB. The combined segment's margin trajectory through Q2 is the broadest read on production services pricing available
• Weekly BH rig count — at 548, the count is stable but below year-ago. A sustained move above 580 would signal operator activity acceleration and create real upside for service pricing; a move below 530 closes the repricing window for 2026
• NPK International capacity execution — the $40-45M manufacturing expansion is a bet on sustained utility demand. Delivery by mid-2027 at target cost would validate the thesis; delays or cost overruns would pressure the raised guidance

Crude Intelligence Report is an independent upstream oil and gas intelligence publication. The content in this article is for informational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy or sell any security. Always conduct your own due diligence before making investment decisions. CIR and its contributors may hold positions in companies mentioned; any such positions will be disclosed when known. © 2026 Crude Intelligence Report. All rights reserved.

This article contains forward-looking statements and analytical opinions. Actual results may differ materially.