NAM Land Fundamentals Improving into 2025. Offshore and International Growth Moderates.

According to the latest Kimberlite 2024 drilling study, North America is witnessing a significant transformation in drilling activity, driven by operator consolidation coupled with continued drilling and completion efficiency allowing operators to effectively "accomplish more with less". Offshore and International continue to drive growth into 2025, but the pace of growth exhibits slowing or moderation from recent double-digit levels.

North American Trends: While NAM land operators are on pace to drill approximately 9% fewer wells in 2024 versus 2023, lateral lengths are increasing by nearly 5% lessening the impact on footage drilled and completed. Looking ahead to 2025, NAM land operators are projecting to drill 1-2% fewer wells in 2025 versus 2024 but if lateral lengths continue to increase, overall footage drilled and completed may remain on par Y/Y or slightly higher allowing operators to leverage completion & technology efficiencies to maintain production levels or perhaps drive modest increases.

International Outlook: On the international front, the drilling sector is poised for continued expansion. International operators report plans to increase drilling by 7% in 2025 versus 2024. Offshore activity is forecasted to lead growth rates at 9% year over year in 2025, although it's likely to hit a plateau within the next 24 months. This plateau is due to the unavailability of additional rigs and day rates that do not currently justify new capital expenditures on rig construction.