Overnight co-leader Jay Sigel had a 69 to match O'Neill and Davis at 8-under-par 136 on the Egypt Valley course. Morris Hatalsky (66) was a stroke back. Bob Gilder (68), Wayne Levi (68), Jim Thorpe (69) and Tom Wargo (69) are all two off the pace.
O'Neill, 51, has finished over par in 11 of 12 events he's played this season. The Jamestown, N.Y., resident earned exempt status on the Senior PGA Tour this season by finishing third in the qualifying tournament.
Sigel, who shared the first-round lead with David Eger, had four birdies and one bogey on a day that saw play suspended for three minutes because of a late-morning shower.
Eger shot even-par 72, and is three back at minus 5.
Davis, seeking his first top-10 finish of the season, had seven birdies and two bogeys.
Two-time defending champion Larry Nelson is seven shots back at 143. He shot a 74 on Saturday.
Full-field scores from the Farmers Charity Classic