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With earnings season just getting under way for both the onshore and offshore drillers, it's already abundantly clear which group of contractors is in the catbird seat today. That would be the folks drilling on dry land.

In case you missed Halliburton's (NYSE:HAL) earnings report, the company reported that its North American revenue hit an all-time high on the back of demand for services related to unconventional resource plays. This should be no surprise for anyone following the soaring Eagle Ford or the big ol' Bakken, where Occidental Petroleum (NYSE:OXY) and other heavyweights have piled in following smaller operators like Kodiak Oil & Gas (NYSE:KOG).

Helmerich & Payne (NYSE:HP) is reaping the rewards of this onshore oil boom -- big time.

H&P's U.S. land segment operating income leaped by 73% year on year and 33% sequentially. Rig utilization ran at 84%, which isn't as high as we saw back in 2008, but it's enough to make shareholders very happy. The shares are now trading at their highest level since August 2008.

The dynamics are pretty straightforward. E&Ps like SandRidge Energy (NYSE:SD) are unlocking new plays in established oil patch regions like the Permian Basin and the Mid-Continent. Whereas past wells were drilled vertically, the operators are now turning the drill bit sideways and drilling horizontally for several thousand feet. This requires a rig with serious muscle, and H&P arguably has the industry's best offering in its FlexRig series.

H&P or Canada's Precision Drilling (NYSE:PDS) might strike you as a great "picks and shovels" play -- a way to ride the rising tide of oil without taking on as much commodity risk as you would by investing directly in an E&P. Unfortunately, that's not the case.

The contract driller stocks are just as levered to the commodities cycle, if not more so, given the industry's typically rapid response to rising and falling prices. It just doesn't get much more cyclical than this sub-sector. The volatility is exhilarating on the way up and excruciating on the way down. The tricky thing is that these stocks usually look cheap at cyclical peaks, because their trailing earnings are so high. It's also our tendency as humans to project the recent past into the future, so it's hard to see the good times coming to an end.

Everything is going right for H&P in the present environment, and that may continue for several more quarters ... or even a few years. If so, there could be substantial upside for shareholders from here, but it doesn't strike me as a particularly opportune time to be establishing or adding to a position in the company's shares.

Disclosure: Author has no positions in companies mentioned

Source: Helmerich & Payne Shows Why It's Good to Be a Land Driller