RigData Insights

Where Have All the Small Mechanical Rigs Gone?

  • Wednesday, January 10, 2018
  • Posted By Meagan Wildfong

011018 Source: Land Rig Newsletter | December 2017

 

Is the small private drilling contractor running mainly small, mechanical rigs an endangered species? It would seem so, given the overwhelming dominance of larger, high-spec rigs and the trend of operators focusing more narrowly on the best-return wells in the plays those high-spec rigs were built for.

 

There are still many small, private operators that rely on small drillers and their small, mechanical rigs for their many shallow, vertical wells. What happens to that activity when the small drillers and their mechanical rigs fall by the wayside?

 

The latest tally of 80 drillers in the Small Fleet in the December 2017 Land Rig Newsletter compares with 147 reported 3 years prior; their respective rig counts for the same samples were 205 and 393. So even with the drastically different market circumstances, the number of rigs per small driller was pretty close for both—2.6 (2017) vs. 2.7 (2014), a drop of less than -4%.

 

But for the two larger-fleet groups combined comparing the same samples, the decline in rigs per operator was -33%. Meanwhile, Class A market share has fallen from 5% in 2014 to just 3% in 2017, and this group’s marketed utilization has fallen from 64% in 2008 to just 32% in 2017.

 

Call 1-800-627-9785 to subscribe to Platts RigData Land Rig Newsletter, the leading oil and gas industry publication focused on current and long-term trends impacting the land contract drilling sector.

 

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