Source: Day Rate Report | February 2018
Are the big rigs headed for revival? The available rig ratio hit zero across the board for the big rigs (2,000 hp+) last week—every single region had no big rigs available. A zero available rig count means a perfect balance between the number of big rigs readily available to work and those actually working. Like all other rig classes not dubbed D (1,500–1,999 hp), the big rigs were virtually an afterthought during the worst of the recent cycle. Big rig utilization remained well below that of Class D. But lately the big rigs have been catching up and their demand has been less volatile than usual.
When they were in greatest demand in 2014, Class D rigs actually pushed their day rates to a level steadily higher than the big rigs—which runs counter to history, as the bigger horsepower-capacity class generally drew a bigger rate. But the gap between the two classes widened sharply during the bust, as the Class D rigs scrambled to be more competitive, and big rigs were relegated to more specialized uses rather than try to compete in Class D strongholds.
Now everyone talks about “superspec” rigs: a 1,500 hp AC rig with 7,500 psi mud system, 750,000 lb hookload capacity, and multiwell pad mobility. H&P says superspec Class D rigs account for more than 41% of the active land rig market. So with demand rising for superspec rigs, the day rate gap with the big rigs is shrinking again, yet demand for big rigs just topped out. And these increasingly complex horizontal wells are challenging the capabilities of some Class D rigs, especially those having to carry massive rig stands across a pad. Will that help shift the refurb trend toward favoring big rigs vs. emulating supersec Class D rigs?
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