An Uptick in the Directional Drilling Market

Gas, electric and fiber projects could keep contractors busy for at least the next decade
An Uptick in the Directional Drilling Market

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The chase for telecom and natural gas work should continue to stay strong for the foreseeable future, according to directional drill manufacturers serving North America.

“We’ve definitely seen an uptick in our industry in the last eight or nine months,” says Kenny Clever, vice president of sales and marketing for American Augers. “Specifically we’ve got a lot of excited contractors and I’m hearing comments like ‘we’re bidding more work than we have in years.’ Everybody is looking at new projects and it’s exciting to see that it’s really coming to life here as of late.”

Natural gas and electrical companies are beginning to upgrade systems and replace aging infrastructure, while other companies like Google, AT&T, Verizon and many others are trying to one-up each other in the fiber race.

“It is regional,” says Seth Matthesen, HDD product manager for Ditch Witch. “It’s really by city and area if it has the funds to spend on those projects. You see even a little bit in Latin America and Mexico and some even in Canada. It’s kind of spread out.”


Natural gas companies are starting with replacing infrastructure that was built in the 1970s and before. “We’re seeing a lot of replacement going on in the field,” says Todd Michael, product manager of trenchless products for Vermeer. “The majority of the work is replacing old lines and just replacing infrastructure that has been in the ground a long time.”

It’s not about whether it’s in good shape or not, it’s that they have to replace it before there is a problem with it. “Some of those old gas lines are steel and iron-type pipe systems that have gotten old,” says Dr. Samuel Ariaratnam, a professor and construction engineering program chair at Arizona State University. “I’m seeing a lot of these types of projects locally in the Phoenix area where we’re looking at $225 million dollars a year in just gas work.”

It’s a project that is expected to last 10 years or more. Ariaratnam says that is a lot of money in just one city, but the company is doing similar work in other areas too.

“I’ve talked to contractors out in California that are doing the PGE work who are saying it’s really busy just trying to put all those new distribution systems in,” Ariaratnam says. “All of them are in urban areas where HDD has a big role. I think we’re seeing a lot of those smaller rig companies taking off down there because they’re easier for entry.”


The three manufacturer representatives all agreed that right now is a good time to be in the small-drill business. Drills under 40,000 pounds of thrust pull-back are considered small, 40,000 to 100,000 pounds are medium size and anything over 100,000 pounds is large.

“The small- and medium-sized rigs are definitely the hot spot in sales at this current time,” says Michael. “It’s definitely a good time to be in the small-drill business.”

While a part of that uptick in the smaller drills is the natural gas and electric work taking place, a majority of it is with the fiber industry with telecom.

“Obviously there’s a chase for 5G,” Matthesen says. “Anyone who has kids, if you can have a dinner without everybody being on the phone, it’s a miracle because everybody is video streaming. That broadband, that need for communication is out there and everybody is chasing it. We really see a good uptick in that market in the next five to seven years.”


Google kick-started the industry with the 4G market building its own customer base, but that also drove other telecom companies to start building up their networks. While American Augers deals with drills over 100,000 pounds of thrust pull-back and typically doesn’t see telecom work, some contractors are bumping into it a little bit with tower installations.

“You’re going to see the competitors step up and I think it’s going to challenge everybody to better their systems and it’s going to create a lot of work for people,” says Clever.

Google started its fiber project in Kansas City with directional drills, then moved to Utah and Texas. Verizon and AT&T are also both embarking on big projects.

“I saw the plans for Phoenix for Verizon and they’re anticipating on keeping 48 small directional drill rigs busy for the next five years, just on that one project in one city,” Ariaratnam says. “If we look at it in many different cities, that looks like a really good opportunity for the directional drill market.”


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