Why NESR’s Drilling Contracts Are More Valuable Than Oil: The 95% Rally No One Saw Coming

In a market obsessed with barrels and price charts, National Energy Services Reunited (NESR) has quietly staged a 95.5% surge in just three months. What’s fueling this rally? The answer is as much about geopolitics and contract ingenuity as it is about oil itself.

Desert Contracts—The Hidden Reservoir

When NESR announced a major integrated frac contract in Saudi Arabia’s Jafurah field, most investors shrugged. But those who looked closer saw the blueprint for NESR’s recent run. The company’s $200 million drilling services contract in Jordan—secured with Kuwait Drilling Company—was not just another win. It opened the gates to the MENA region’s most prolific and politically insulated gas projects, letting NESR tap into a secular trend: service intensity per well is rising, and so is the need for local expertise.

Across the region, NESR also landed slickline contracts worth another $200 million in Kuwait and Oman. These victories coincided with a 63.5% jump in the share price over the past 90 days and a remarkable 62.3% gain over the past year—figures that would make even the most exuberant shale CEO envious.

Margins in the Sand: Resilience Amid Volatility

While global oilfield giants have wrestled with margin erosion, NESR’s Q3 2025 results tell a story of disciplined capital and operational focus. Adjusted EBITDA for the quarter hit $64.0 million, with a margin of 21.7%. Net income climbed 16.7% sequentially to $17.7 million, even as revenue dipped year-over-year to $295.3 million. Gross profit margins, at 14.8% (TTM Q2 2025), have held up in a market that punished excess leverage and overextension.

Debt discipline is visible: total debt fell from $323.1 million at the end of 2024 to $272.9 million in September 2025, pushing net debt/EBITDA down to 0.93. Free cash flow for the first nine months was $25.0 million—a sharp drop from the prior year, but management signaled a Q4 rebound as contract transitions and receivables normalize. In a sector where many names still drown in red ink, NESR’s balance sheet is beginning to look like a desert oasis.

Geopolitics: Navigating the Energy Chessboard

In the Middle East, risk is always part of the game. Yet NESR’s revenue mix—where 80% is insulated from oil price swings—offers rare resilience. As Iran, Israel, and regional actors recalibrate the geopolitical landscape, NESR’s exposure to gas development in Saudi Arabia and its expansion into North Africa and the Gulf mitigate headline volatility.

With LNG’s global ascent and the maturing of the US shale boom, the world’s appetite for stable, scalable gas supply is driving new demand for NESR’s services. The company’s technology portfolio, including the ROIA Directional Drilling Platform and NEDA decarbonization suite, positions it at the intersection of traditional hydrocarbons and the energy transition narrative.

When the Megatrends Align

Forget the daily price of Brent or WTI for a moment. NESR’s story is about something bigger: emerging markets where energy demand is still on an upward curve, project intensity is climbing, and Western competitors are often persona non grata. The company’s forecast—$1.5 billion in revenue and $168.6 million in earnings by 2028—requires only 4% annual top-line growth, a pace that seems more than plausible given recent contract wins and its entrenched regional presence.

Peering Over the Horizon

Analysts are catching up, with a consensus “Moderate Buy” and a target price of $16.86—implying another 20% upside. But the real story is not just what NESR earns, but how it earns it: by threading the needle between regional complexity, operational discipline, and megatrend tailwinds.

In a sector where volatility is the rule, NESR’s ability to transform complex, long-cycle contracts into tangible shareholder returns has set it apart. The market’s verdict is clear: sometimes, the deepest value lies not in the oil, but in the service contracts that make extraction possible. NESR’s last three months are proof that, in today’s energy chess match, drilling expertise and regional savvy can be worth more than the commodity itself.