Source: Day Rate Report | February 2018

Class D (1,500–1,999 hp) rigs now account for nearly 9 out of 10 active land rigs in the US.

Looking back over the past decade—to 2008, when drilling in the shales and other “tight” unconventional plays really start to gain traction—Class D rigs represented less than 20% of the active rig count. At that time, horizontal wells were only 29% of the active total, as were 29% of all rigs targeting unconventional plays.

Additionally, roughly 80% of the rigs were drilling for gas in 2008. Class D rigs today account for almost three out of every four active rigs, and AC Class D rigs alone likely represent almost two-thirds of that total. Three-fourths of all active rigs now target oil. Class D rigs have taken market share away from all of the other four rig classes amid a growing dominance of “superspec” rigs.

It hasn’t been so much the type of rig directly losing market share, it was the type of well. Operators simply were increasingly focused on horizontal wells instead of vertical and even directional wells for which the other rig classes might be better suited.

But according to S&P Global Platts Analytics’ RADAR, the share of small, private operators has remained relatively constraint even as the shares of small, mechanical rigs and vertical wells in which they historically were most heavily concentrated have dwindled. That means the increasing dominance of superspec rigs is now infiltrating the small, private operators. That in turn suggests even more upward pressure on production growth.

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