In fact, a survey Global Hunter Securities conducted after first-quarter earnings shows that about 50 percent of the 70 companies the firm follows are potentially set to increase their budgets. That was done at a time when oil was between $55 and $60 a barrel.
"We don't expect major cuts here in most programs going forward. Actually we can expect in second-quarter earnings maybe even hear some guys increasing the budgets," said Kelly.
Read MoreOil rout especially bad for drillers
On Tuesday, U.S. crude closed down 20 cents, at $52.33 a barrel, after falling almost $2 at the session low. Brent crude, on the other hand, rose 43 cents to $57 a barrel.
U.S. crude has lost almost 10 percent since Thursday's close for the sharpest two-day fall since 2011. It is teetering toward a bear market technically, having lost almost 20 percent from a high above $62 just a month ago.
When it comes to investing, Kelly pointed out that not all oil plays are created equal.
"You are going to see the guys with really high-quality acreage positions, those that are in the core of the Eagle Ford, or the Permian or even the core of the Bakken be able to really press on here."
One name he likes is Gulfport Energy, which is down about 13 percent in the past month.
He called its downturn a "pretty big opportunity," noting it is "one of the best drill stories out there."
Read MoreRefiners due for a pullback: Trader
The name is commonly mistaken for a play on oil but it is really a gas-weighted name in the best gas basin in the country, he said.
He also likes Parsley, which he said has the best rock in the best oil basin on the Permian.