Earlier this year Hart Energy market surveys reported that new higher spec rigs with walking packages were displacing older electric rigs in the Marcellus and Bakken shales. The replacement is picking up speed in shale plays where pad drilling has become the norm.
The February 2014 survey found seven of eight manufacturers reporting strong demand. At the time, the rig builders expected international demand to outpace domestic orders. All of the increased demand stems from emphasis on horizontal drilling.
In Patterson-UTI Drilling Co.’s second quarter report July 24, 2014, CEO Andy Hendricks said, "We completed six new APEX rigs during the second quarter, bringing our APEX rig fleet to 133 rigs. In response to strong customer demand, we expect to complete 25 new APEX rigs during the four quarters ending June 2015, of which 22 are currently contracted.”
The company has customer contracts for three additional rigs to be completed in the second half of 2015. The strong demand for high-spec rigs is impacting rig pricing for all classes of its rigs, resulting in higher day rates. Average U.S. rig revenue rose to $23,490 per day, an increase of 2%, the company noted.
Lee C. Moore has orders for 10 of its HMR SlotBox rig structures that will be delivered through 2015. The company has sold 29 of these structures to three North American drilling contractors since 2011.
“Pad drilling efficiencies are crucial in today’s retooling of the land rig market. At some point, the structure needs to efficiently and safely move to another pad. This design focuses on both sides of the equation,” explained Tom Wingerter, president and CEO of Lee C. Moore, in a press release April 29.
Helmerich & Payne (H&P) activated 11 of its new FlexRigs during the second quarter, it stated in a July 31, 2014, press release. That led to record levels of rig activity for the company.
President and CEO John Lindsay said, “We continue to see a strong U.S. land drilling market and expect to benefit from increasing activity, recovering spot pricing levels and additional customer commitments for new FlexRigs. Since our most recent announcement last month, we have entered into agreements with six exploration and production companies to build and operate 13 additional FlexRigs to drill unconventional resource plays in the U.S.
“All of these rigs were ordered under multiyear term contracts. The new contracts bring the total number of newbuild commitments announced in fiscal 2014 to 74 FlexRigs,” he continued.
The move internationally also has picked up this year. Schramm Inc. shipped its second T500XD walking rig to Australia where it began drilling operations in the Cooper Basin. H&P was transferring 10 FlexRigs to Argentina.
The siren call of shale plays is getting louder.
Recommended Reading
Formentera Joins EOG in Wildcatting South Texas’ Oily Pearsall Pay
2025-01-15 - Known in the past as a “heartbreak shale,” Formentera Partners is counting on bigger completions and longer laterals to crack the Pearsall code, Managing Partner Bryan Sheffield said. EOG Resources is also exploring the shale.
Spartan Delta Ups Bought Deal Financing to $59MM
2025-01-14 - Underwriters have agreed to purchase approximately 22.2 million of Spartan Delta Corp. common shares, for resale to the public, at CA$3.82 per share (US$2.66), the company said.
Riverstone’s Leuschen Plans to IPO Methane-Mitigation-Focused SPAC
2025-01-14 - The SPAC will be Riverstone Holdings co-founder David Leuschen’s eighth, following the Permian Basin’s Centennial Resources, the Anadarko’s Alta Mesa Holdings and the Montney’s Hammerhead Resources.
Gigablue Enters CCS Agreement with Investment Firm SkiesFifty
2025-01-14 - Carbon removal company and investment firm SkiesFifty have partnered to sequester 200,000 tons of CO2 over the next four years.
Colonial Shuts Pipeline Due to Potential Gasoline Leak
2025-01-14 - Colonial Pipeline, the largest refined products pipeline operator in the United States, said on Jan. 14 it was responding to a report of a potential gasoline leak in Paulding County, Georgia and that one of its mainlines was temporarily shut down.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.