The global perforating gun market is expected to grow at a CAGR of approximately 5% during the forecast period 2020-2025. Factors such as rise in oil & gas drilling activities across the globe, rising shale prospective and technological developments in perforating gun systems are expected to drive the perforating gun market in the coming years. Moreover, rising complexity of reservoir conditions, which, in turn, boost demand for perforating gun and is expected to further propel growth of the target market over the forecast period. However, renewable energy is likely to increase its share and contribute to 50% of global power in the next few decades. This growth of renewables is expected to slow down the perforating gun market in the coming years.

  • The horizontal well segment is expected to provide huge thrust to the perforating gun market owing to the increasing well development activities and more production in comparison to vertical wells.
  • The application of Internet of Things (IoT) to use the large amount of data generated during the E&P activities has led to meet the growing demands of safety concerns and improving the efficiency. The number of devices used on oil extraction sites is expected to increase, which, in turn, bolsters the perforation gun market.
  • North America is one of the largest markets for perforating gun, led by the United States mainly due to increased exploration and production activities in its tight oil and shale reserves.



Key Market Trends

Horizontal & Deviated Well Segment to Dominate the Market

  • The horizontal well development is gaining popularity, owing to the benefits associated with the same, and technological advancements that have led to increased economic viability of the same.
  • Drilling in shale reserves involves directional or horizontal drilling which leads to increased contact with the pay zone, as well as increased production. Hence, growing focus on the unconventional reserves is expected to be a major driver for the perforating gun market during the forecast period.
  • With a growing trend of multilateral wells, the demand for horizontal drilling activity is increasing in offshore regions, which in turn is driving the global market. Technological innovations and the increasing efficiency of horizontal drilling and multi-stage hydraulic fracturing technologies are unlocking vast unconventional shale and tight hydrocarbon resources across the world, especially in North America.
  • In 2004, horizontal wells accounted for about 15% of the United States crude oil production in tight oil formations. By the end of 2018, that percentage had increased to 96%. Similarly, horizontal wells made up about 14% of the United States natural gas production in shale formations in 2004 and increased to 97% in 2018.
  • Countries such as Argentina, Mexico, and China, have started to explore the commercial viability of their shale reserves. Hence, with rising exploration and production of shale oil & gas through horizontal drilling, the perforating gun market is also expected to witness a significant demand.



North America to Dominate the Market

  • Drilling activities in North America have been increasing amidst rising oil & gas prices. The shift from vertical to horizontal wells is the most important change to occur over the last decade in the region, allowing for greater formation access, while only incrementally increase the cost of the well. The surge in drilling activities has created optimism in the North American oil & gas market and hence may be considered as a good sign for perforating markets.
  • The North American average rig count for 2019 reached 1123, in comparison to 1223 rigs in 2018. This decline in average rig count can be attributed to increased multi-lateral wells for the exploitation of shale reserves. Therefore, increase in multi-laterals would increase the demand for perforating activity.
  • Crude oil production per day in the United States has increased by 10% from 2014, mainly due to increased exploitation of shale reserve through horizontal drilling and hydraulic fracturing. Among basins, Permian is the leading are witnessing one of the highest investment due to its low wellhead breakeven price compared to other basins. Permian accounted for the largest share in the new oil produced in the recent times.
  • Also, the Gulf of Mexico has started to witness a sign of recovering as new projects are coming up. Ongoing investments by oil & gas in deep water and ultra-deepwater drilling activities, such as one by Shell Offshore for Vito, in the Gulf of Mexico in 2018, are expected to create new avenues for perforating gun market in the country.
  • Therefore, North American production has developed significantly and is expected to be an exporter by 2022. Hence, the growing shale industry in the region is expected to create a significant amount of opportunities for the oilfield service providers engaged in perforating gun business.



Competitive Landscape

The perforating gun market is fragmented. Some of the key players in this market include Baker Hughes Co., Schlumberger Ltd., Weatherford International Ltd., G&H Diversified Manufacturing, LP., Dmc Global Inc., National Oilwell Varco Inc., Halliburton Company, Hunting PLC.

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