Wells are drilled directionally and horizontally pretty much everywhere now.  Twenty years ago this was not the case – offshore was directional and land was vertical.  Today, maximum reservoir exposure wins:  How much reservoir rock can you touch with this one wellbore?

Consider the following chart, which breaks out how much money is spent on directional drilling services on land and offshore for each of the major regions of the planet (by percent):

Our colleague, David Hutchison, stays up at night worrying about the directional drilling market (and the drill bit market, and the rig equipment market, and sand, and well servicing, and frac trucks…), and it is from his directional drilling report that I’ve borrowed this chart.

Land is a big deal for directional drilling in three macro regions:  US, Canada and China.  China doesn’t spend much money on directional work, so North America is the one big land market for directional drilling.  

But US land drilling is flat to down for a while, same with Canada, so the land directional market doesn’t have much wind in its sails and very little growth except for places like China, Saudi Arabia and the rest of the Middle East.

The result of all of this is that offshore is where we should focus during 2020 and beyond.  All those offshore macro regions are enjoying growth in new well drilling, which means growth in directional drilling.  The high end of the global directional drilling market will do well in 2020 and beyond.