International exploration and production (E&P) spending might deflate after a modest uptick in 2014, but North American spending should continue to shine.

While the spotlight has been on turmoil in Iraq and Libya, international cuts are likely in 2015 due to recent declines in global oil prices, sanctions against Russia and further declines in E&P spending. Several mid-majors are cutting back on spending, as are large national oil companies such as Petrobras and Pemex. Many of those companies look to be no better than flat in 2015, said James Crandell, managing director of Cowen and Co.

North America has turned around mightily from 2013, when U.S. spending dipped 2.6% and Canada 2.3%.

“We continue to forecast a 10% increase in North American E&P spending in 2015, which will be similar to the rate of growth in 2014,” Crandell said.

As a result, well completions should increase significantly along with stage counts.

“In 2015 we forecast increases of about 11% in total U.S. well completions and about 15% in total U.S. stage counts with greater gains in horizontal wells and stages,” he said.

Crandell forecasts that North American revenue growth in 2015 will average 15%. Operating income growth will be much higher for the three largest oil service companies.

At midyear 2014, Cowen’s survey of U.S. E&P spending found it would improve by 9.1% to $154 billion, “meaningfully higher than our forecast of 5.3% growth in January.”

Cowen increased 2014 U.S. spending estimates for many larger independents such as Apache Corp. (NYSE: APA), Cimarex Energy Co. (NYSE: XEC) and Swift Energy Co. (NYSE: SFY).

In July, Cowen analysts said the improved outlook in the U.S. is due to the strength in oil prices and the great success enjoyed by many companies drilling horizontally in the shales.

U.S. rig count at the midpoint had grown to 1,858 from 1,751 at the beginning of the year, highlighting strong cash flow generation and a renewed focus on growth among large U.S. independents.

The Permian Basin has seen an 18% growth in the rig count to 553 and should continue to be an area of focus among U.S. E&Ps in the second half of 2014.

Despite international lethargy, Crandell said he continues to have a positive view on investing in major oil service company stocks, given the favorable outlook for revenue and earnings growth, substantial free cash flow generation and attractive valuation.