A new paradigm is emerging for US land drilling industry—and it’s an old one. That is to say the industry has been talking about the "Factory Model" being adopted to develop the massive hydrocarbon resource that technological advances have unlocked.
This has certainly proven to be the case in terms of operations. Apart from perfecting the horizontal drilling and hydraulic fracturing techniques that have monetized these unconventional resources, operators and drillers have been relentless in pushing the envelope on rig automation and drilling efficiency.
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Clearly, the new dynamic in the drilling industry has proven a paragon of efficiency in terms of increasing oil supply. There are fewer rigs and fewer wells, yet unprecedented production gains have occurred in such a brief span.
Despite the steep declines in the number of active rigs, wells drilled, and wells per rig in recent years, US oil production has more than doubled since the unconventional resource boom started to gather momentum in 2008. Even with the production surge, US oil reserves have gained as well.
Additionally, operator returns are more attractive than they have been since the downturn began in late 2014.
The 1-rig model
Indeed, this success has been predicated on industry moving to a 1-rig (Class D model) industry. This is hyperbolic, but it’s to underscore a point: As the nearby chart shows, the industry has overwhelmingly adopted Class D (1,500–1,999 hp) as the preferred model for drilling the unconventional resources that have upended the global energy picture to lasting effect.
More specifically, the industry is becoming increasingly focused on an advanced model of the Class D rig—the "super-spec" rig. Just like with "tiers" and "high-spec," a super-spec rig is one that you point to and call a super-spec rig, if it fits your definition. This is in keeping with tradition as with the earlier identifiers, in which there was no formal agreement on technical specs, as it . . .
For the complete analysis including additional charts and graphs please contact CustomerService.RigData@spglobal.com. Request the August 2018 issue of Platts Land Rig Newsletter
Upstream Activity Data for North America
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