Procurement Market Intelligence Report
Underbalanced Drilling Services
Sourcing Guide & Market Intelligence
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Underbalanced Drilling Services Global Overview
Definition
Summary
Underbalanced drilling is a method of drilling wells for oil and natural gas extraction in which the pressure of the wellbore is kept lower than the pressure of the formation fluids. This method helps reduce the formation damage common during conventional drilling and increases the penetration rate. When performed correctly, underbalanced drilling can increase the rate of penetration, leading to higher efficiency. Key buyers include oil and natural gas extractors, refiners, and oilfield support service providers.
This Report Includes:
- Underbalanced Oil Well Drilling
- Underbalanced Gas Well Drilling
- Managed Pressure Drilling
Not in this Report:
- Conventional Drilling Services
- Coiled Tubing Services
- Slickline Services
- Coring Services
Classification:
- Underbalanced Drilling Services
- Oil & Gas Casing & Tubing
- Oil & Gas Engineering Services
- OCTG Supply Chain Services
- Oil & Gas Facility Construction & Maintenance
- Oil & Gas Field Consulting Services
- Oil & Gas Land Services
- Oil & Gas Pipeline Construction
- Oil & Gas Pipe Coating Services
- Oil & Gas Well Maintenance
Global Underbalanced Drilling Services Procurement Trends
Discover the top international trends affecting procurement in the global Underbalanced Drilling Services market.
Warning Trends
United States announces new tariffs on all imported steel
- In February 2025, the United States announced 25.0% tariffs on all imported steel with no exemptions or exceptions. The tariffs took effect on March 12, 2025. On June 4th, these tariffs were increased further to 50%. These tariffs were not impacted by a recent court decision that temporarily suspended duties on certain goods as they were implemented under Section 232 of the Trade Expansion Act.
- Previously, countries such as Canada, Mexico, and Brazil, the top exporters of steel to the United States, had exemptions from tariffs. These have now been removed and all imported steel, regardless of origin, will be subject to the 50.0% tariff. However, on May 8th, the US announced an agreement with the United Kingdom to remove all levies on steel exported from the UK.
- When tariffs on steel imports were introduced in March 2018, they contributed to an increase in the price of steel and steel products. According to the Bureau of Labor Statistics, the price of steel-milled products increased by 10.2% in the year after the tariffs were implemented. This market heavily relies on steel as an input and may be impacted by this policy.
Neutral
Crude oil prices dip, but natural gas and fuel prices remain volatile in 2025
- Oil prices have been falling with the introduction of higher tariffs and the predicted decline in global demand. The OPEC+ group of countries also announced they would be unwinding production cuts and increasing their collective output target for May by 411,000 barrels per day.
- Trade wars, ongoing conflict between Hamas and Israel, and general unrest in the Middle East are causing uncertainty surrounding oil prices, which has led to volatility in prices. In the third week of May 2025, crude oil prices hit $63.67 per barrel, but volatility remains as geopolitical concerns remain.
- Natural gas prices rallied early in 2025 with colder-than-usual temperatures in the United States and high demand, topping out at $4.68/MMBtu in March. Prices have since fallen with the onset of trade wars and weakening demand projections to $3.64/MMBtu in the third week of May 2025.
- The national average of gasoline prices has been rising slightly due to refinery maintenance/outages and blending issues, hitting a national average of $3.15 per gallon in the third week of May 2025. However, gasoline futures have been volatile, falling due to fears of oversupply and deepening concerns about weakening demand with tariffs, but rising after trade deals.
Global Underbalanced Drilling Services Market - Suppliers by Region
| Country/Region | Number of Suppliers |
|---|---|
| #1 South America | 1,070 |
| #2 Africa & Middle East | 945 |
| #3 Europe | 610 |
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2
Geography Drilldown - US
Average Cost of Underbalanced Drilling Services
United States
2026 Market Pricing$15,000.00 to $XXX,XXX.XX
per dayAverage Price
Prices in the Underbalanced Drilling Services market range from $15,000.00 to $XXX,XXX.XX, depending on Hole Diameter, Location and Drill Site. For example, lower prices are associated with Less than 6 inches ($15,000 to $40,000 per day), whereas higher prices are associated with Greater than 6 inches ($40,000 to $100,000 per day).
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Underbalanced Drilling Services Category Price Trends
Pricing trends are indicated by the compound annual growth rate (CAGR) during a set period of time. For the Underbalanced Drilling Services market, prices in the US have grown 0.2% from 2022 to 2025. Subscribers can access price trend forecasts, price driver projections and forward-looking cost structure data. Learn more
United States (2022-2025)
United States (2025-2028)
Compound Annual Growth Rate
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Cost Analysis - Total Cost of Ownership for Underbalanced Drilling Services
Total cost of ownership is Medium in the Underbalanced Drilling Services market. The average cost of ownership differs depending on the contract but generally includes costs negotiated before the contract begins, costs billed during the contract period and unforeseen costs. For example, unforeseen costs in the form of Emergencies may raise the total cost of ownership unexpectedly.
Negotiated Before
Set Up Fees
Pre-evaluation
Other Fees
Billed During
Waste Management
Insurance
Unforeseen
Emergencies
Buyer Power in Procurement Negotiations
In 2026, buyer power amounts to -1.1 in the United States. Buyer power is most positively impacted by Recent Developments. It is most negatively impacted by Recent Price Trend. Subscribers can access details on eight other factors that impact buyer power. Learn more
United States
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Supply Chain Risk
The average level of supply chain risk is assessed as Medium, which has a negative impact on buyer power. The level of supply chain risk is affected by industry volatility, barriers to entry, competition, import penetration, regulation and industry financial risk. Buyers in this market can mitigate procurement and supply chain management risks by monitoring risk levels for individual first and second tier suppliers:
1st
Tier Suppliers
- Industrial Machinery & Equipment Wholesalers
- Fuel Dealers
- Chemical Wholesalers
2nd
Tier Suppliers
- Mining, Oil & Gas Machinery Manufacturers
- Petroleum Refiners
- Organic Chemical Manufacturers
- Inorganic Chemical Manufacturers
Biggest Underbalanced Drilling Services Suppliers in the US by Revenue
The largest Underbalanced Drilling Services vendors by revenue in the US are Noble Corporation, Fluor Corporation and Atlas Copco Ab. Subscribers can sort and filter by market share concentration, profit level and other factors. Learn more
| Supplier | Operational Size | Headquarters | Number of Employees | Market Share (%) | Market Share Performance (3yr trend) | Total Revenue ($ million) | Profit Level (%) | Risk Level |
|---|---|---|---|---|---|---|---|---|
| Schlumberger Limited | Global | HOUSTON, TX | >10,000 | 5-10 | ||||
| Halliburton Company | Global | HOUSTON | >10,000 | 5-10 | ||||
| Baker Hughes Company | Global | HOUSTON, TX | >10,000 | 5-10 | ||||
| Weatherford International Plc | Global | HOUSTON | >10,000 | 5-10 | ||||
| Atlas Copco Ab | Global | Stockholm, SE | >10,001 | < 5 | ||||
| Fluor Corporation | Global | IRVING, TX | >10,000 | < 5 | ||||
| Nabors Industries ltd | Global | HAMILTON, HM08 | >10,000 | < 5 | ||||
| Superior Energy Services | Global | HOUSTON, TX | 1,001-10,000 | < 5 | ||||
| Precision Air Drilling Services Inc. | Regional | Fruita, CO | 51-100 | < 5 | ||||
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Profit Analysis
The average profit margin across vendors in the Underbalanced Drilling Services market is 16.4% and rising. Profit levels shift depending on suppliers' spend on wages, purchases and overhead. The highest cost component for vendors is Purchases. The cost trend for this component is falling, when considering movement between 2025 and 2026. To understand cost forecasts for 2027 and uncover the implications on profit, start your subscription. Learn more
Vendor & Supply Chain Analysis
On average, vendors in the market carry a moderate level of risk largely due to volatile demand conditions and strict regulatory practices in the oil and gas sector. As a result, buyers face a moderate risk of experiencing service disruptions that stem from vendor complications such as financial instability and legal issues.
The market has a moderate level of market share concentration, indicating that some larger vendors account for a significant portion of revenue and somewhat influence market prices. However, the market still has an ample number of smaller vendors operating with a high level of competition, thus encouraging price competition.
On average, supply chain risk is moderate throughout the market, with the highest risk stemming from the raw materials used to produce drill bits. Steel prices fluctuate significantly and frequently, adding some uncertainty to operating costs for suppliers and elevating price volatility somewhat.
The United States is a net importer of metal boring machines, indicating that buyers may have greater access to competitive goods with lower prices or unique features. However, depending on foreign suppliers may leave buyers open to supply chain disruptions caused by foreign currency exchange issues.
Supplier Information
Baker Hughes Company
Baker Hughes Company is a public company operating globally in the mining, manufacturing, manufacturing and professional, scientific and technical services sectors. The company's offerings include inflow control devices, coiled tubing monitoring systems, drilling fluids, hydraulic power tongs, oilfield separators.... Subscribe to learn more
Halliburton Company
Halliburton Company is a products and services provider to the energy industry. It organizes its business into two operating segments: Completion and Production segment, which delivers cementing, stimulation, specialty chemicals, intervention, pressure control, artificial lift, and completion products and... Subscribe to learn more
Schlumberger Limited
Schlumberger Limited is a public company operating globally in the mining, manufacturing, manufacturing, professional, scientific and technical services and other services (except public administration) sectors. The company's offerings include inflow control devices, drilling tools, drill bits, downhole instrumentation,... Subscribe to learn more
Weatherford International Plc
Weatherford International Plc is a public company operating globally in the mining, manufacturing and professional, scientific and technical services sectors. The company's offerings include inflow control devices, drilling tools, drill bits, downhole instrumentation, coiled tubing monitoring systems. Founded... Subscribe to learn more
Air Drilling Associates Inc.
Air Drilling Associates Inc. is a private company operating globally in the mining sector. The company's offerings include underbalanced drilling services. Founded in 2002, the company is currently headquartered in Houston, Texas, United States of America with an estimated 300 employees. Subscribe to learn more
Atlas Copco Ab
Atlas Copco Ab is a public company operating globally in the mining, manufacturing and other services (except public administration) sectors. The company's offerings include drilling & exploration equipment, drill bits, off-highway trucks, pneumatic motors, hydraulic tools. Founded in 1873, the company is... Subscribe to learn more
Blade Energy Partners
Blade Energy Partners is a private company operating globally in the mining sector. The company's offerings include underbalanced drilling services. Founded in 2000, the company is currently headquartered in Frisco, Texas, United States of America with an estimated 175 employees. Subscribe to learn more
Fluor Corporation
Fluor Corporation is a diversified holding company that provides professional and technical solutions. It primarily offers engineering, procurement, construction, fabrication and modularization, and project management services. It serves various industries worldwide, including advanced technologies and manufacturing,... Subscribe to learn more
Nabors Industries ltd
Nabors Industries Ltd. is a global provider of drilling and drilling-related services for land-based and offshore oil and natural gas wells. It organizes its business into four segments: the U.S. Drilling segment, which operates land-based drilling rig fleets in the US, focusing on the major hydrocarbon basins... Subscribe to learn more
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Procurement Management KPIs for the Underbalanced Drilling Services Market
Managing vendor performance throughout the contract period is easier when tracking specific key performance indicators (KPIs). For example, buyers should monitor Customer Satisfaction (CSAT) and Employee Absence Rate. Buyers may experience better performance throughout their contracts if they establish service level agreements (SLAs) based on Drill Operation Timeframe and other factors.
| KPI | Level of Importance (1-5) | Measurements | Key Considerations |
|---|---|---|---|
| Customer Satisfaction (CSAT) |
|
Number of positive customer responses Number of customer responses |
Customer satisfaction represents customers’ overall satisfaction with a company. Customer satisfaction can be used to evaluate a company’s reputation. Vendors with a strong reputation likely complete projects without disruption and consistently meet client commitments. |
| Employee Absence Rate |
|
Number of days off by drilling operators Unexpected absences by drilling operators |
Vendors should ensure that their employees are dependable and reliable and show up to the drill site on time. Frequent absences by employees will reduce the overall efficiency of the operation and lead to delays. |
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Questions to Ask During Procurement Negotiations
How can I gain leverage during negotiations?
Experience and Expertise
How many years has your company been a supplier of underbalanced drilling services?
How have your operations progressed and changed during the past decade? What has been the most significant change?
Legal Concerns
What actions do you take to ensure your company is up to date with all federal and local regulations that are applicable to my operation?
Has your company, or a past client, faced legal issues as a result of failing to comply with a law? What was the result?
Security
What type of safety training does your company provide your staff? How often does your staff receive additional or refresher training?
Do you have employees dedicated solely to maintaining a safe work environment?
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Underbalanced Drilling Services RFP Guidelines
What should my RFP include?
Organizational Overview
Buyers should give an overview of their company and scale of operations.
Buyers should specify the cities, counties and state(s) where they require drilling services.
Statement Of Need
Buyers should specify the ground composition at the drilling location.
Buyers should specify the geophysical characteristics and the terrain of the drill site.
Project Budget
Buyers should specify their total budget.
Buyers should specify the desired payment terms.
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Our Reports include:
- Opportunity assessment
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- Price environment and market pricing
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- Supply chain and vendors
- Global supplier breakdown
- Market share concentration
- Regulation and business requirements
- Vendor management and KPIs
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