Offshore Drilling Market Remains Robust With Asset Values Rising,” says Jefferies & Company, Inc. in a recent report.

And how. The report authors highlight the “considerable recent increase in net asset values (NAV)” for offshore drillers. They further say that the “NAV premium for public offshore drillers [is likely not] big enough.”

According to the company, firm crude-oil fundamentals, stable activity in the Gulf of Mexico jackup market and the continued growth of backlog in the deepwater rig market have pushed the Jefferies Offshore Drilling Index up 28.3% year to date.

Of the 27 ultradeepwater rigs currently operating in the US Gulf of Mexico, only 26% have any availability remaining in 2008, while 74% are contracted into 2009, 59% are contracted into 2010 and 26% have already secured work extending beyond 2010, the report says. Jefferies reports similar activity in the other significant offshore operating areas elsewhere in the world. As graphs in the report vividly indicate, jackup and semisubmersible supply and demand worldwide are converging.

Close your eyes and pick a headline in this report and your finger will likely land on good news if you’re an investor: “Increasing price targets…”, “Tight rig market and increasing demand…”, “Continued build in deepwater backlog…”, and on and on.

If you’re looking for pleasant reading about the state of the offshore drilling industry, visit www.jefferies.com to arrange for a copy of the June 2007 Offshore Drilling Monthly.
Nomadic rig

International drilling contractor KCA DEUTAG and drilling rig fabrication and engineering company Bentec Drilling and Oilfield Services have unveiled the first of a new land rig design called the Nomad Class, jointly developed by both companies for desert terrain conditions such as North Africa and the Middle East. A second identical Nomad Class rig is scheduled for completion in September 2007 with further Nomad rigs currently under consideration.
More than 200 senior executives from international oil operators, drilling contractors and government authorities, attended the rig-up party for T-211, which will be mobilized in the third quarter 2007 to Algeria, North Africa, to work for BP/Sonatrach under a 1-year contract with options with KCA DEUTAG.

Claus Chur, KCA DEUTAG director technical and procurement, said, “The Nomad Class rig has been designed in response to customer demand for highly mobile and more efficient drilling rigs capable of drilling wells to 15,000 ft (4,575 m) or more. Existing rigs can take more than 10 days to move between locations whereas the Nomad Rig is designed to take 5 days to move up to 16 miles (10 km) between well locations over flat terrain. The Nomad Class rig is equipped with special transportation carriages which allow the derrick and drill floor substructure to be moved as complete assemblies over flat terrain conditions thereby reducing the rig disassembly and assembly times. These assemblies can also be disassembled into smaller rig packages for moves over sand dune conditions.”

The Nomad rigs incorporate special HSE features such as pipehandling equipment, derrick, anti-collision system, iron roughneck, man-riding winch, dedicated equipment maintenance platforms and special noise insulation in the generator packages.

The rigs are equipped with a new, Bentec-designed mast with a 1-million-lb static hook load rating, which is typically greater than similar sized rigs.

Wasted road
US Liquids of Louisiana says it is the first in the oil and gas industry to convert drilling waste to environmentally friendly roadbase material to construct a Starr County road in South Texas. Approved by the Texas Department of Transportation and the Texas Railroad Commission, the company says its recycled roadbase and paving materials eliminate operator liability for waste generated in drilling operations.

With the patent-pending process, drilling waste is cleaned and blended with other feedstock to produce high-performance roadbase and paving reuse materials. Once the reuse materials meet stringent engineering and environmental specifications, they can be applied in construction projects. The company says independent lab tests have proved that the material is cleaner, more affordable and has higher compressive strength than comparable road construction materials.

Bit records
This magazine has for many years maintained the definitive list of drill bit records by bit type (e.g., roller cone, polycrystalline diamond compact) and record type — single run footage, cumulative footage, and rate of penetration. And for most of those years, the records made only one public appearance annually. That changed when the records were migrated to the E&P Web site. This part of the site just underwent a total overhaul, and all with an interest in the sharp end of the spear are invited to view the records or make record claims. Visit the site at www.eandp.info and click on Drill Bit Records.

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