RigData Insights

Higher Horsepower and Higher Tech Rigs See Increased Demand

  • Tuesday, November 17, 2015
  • Posted By Huggins Huggins

With increased demand for greater horsepower, higher-tech drilling rigs in recent years, the average age of active rigs has decreased by 41% since 1Q 2011, according to RigData’s RADAR Report. The most dramatic drop has occurred in the past year alone.  The average age of a rig active in Q315 was 7.3 years, down -25% YOY. Mechanical rigs had dominated the newbuild market until 2006, representing almost 70% of the rigs built in 2000.  That year, most rigs added to the fleet were mechanical rigs rated to 5,000–10,000 ft.  The AC rig rated to ≥15,000 ft rapidly became the preferred rig among operators post-2006. In 15 years, the preferred rig type has completely shifted; mechanical rigs represented 70% of the newbuilds in 2000, while 69% of the rigs built in 2015 are AC rigs. Thus the average age of the US rig fleet will continue to decline, then level off if the lower-for-longer oil price mantra continues to hold true, as slow recovery of day rates will support refurbishments more so than newbuilds.

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