A bottom hole assembly 10 for drilling a deviated borehole includes a positive displacement motor (PDM) 12 or a rotary steerable device (RSD) 110 having a substantially uniform diameter motor housing outer surface without stabilizers extending radially therefrom. In a PDM application, the motor housing 14 may have a fixed bend therein between an upper power section 16 and a lower bearing section 18. The long gauge bit 20 powered by the motor 10 may have a bit face 22 with cutters 28 thereon and a gauge section 24 having a uniform diameter cylindrical surface 26. The gauge section 24 preferably has an axial length at least 75% of the bit diameter. The axial spacing between the bit face and the bend of the motor housing preferably is less than twelve times the bit diameter. According to the method of the present invention, the bit may be rotated at a speed of less than 350 rpm by the PDM and/or rotation of the RSD from the surface.