Elaine Maslin, 1st June 2012
A lack of available North Sea rigs is pushing day rates up to £230,000, according to a Westhill-based rig operator.
Awilco Drilling says rig availability in the UK North Sea during 2012 is nearly fully absorbed and that in some cases exploration firms are considering delaying drilling programmes into 2014 as a result.
The comments follow recent reports that drilling activity is due to increase in the North Sea following tax breaks announced by the UK Government in the March Budget. The government saw a record number of applications last week for the latest exploration licensing round.
Announcing first quarter results, Westhill-based Awilco Drilling added: “Tendering activity is focusing on 2013 start-up, with a number of significant requirements still outstanding. In some cases operators are considering postponement into 2014.
“Lead times, from tendering to start of work, and day rates increasing to a level of approximately £230,000, are both indicators of an improving market. The company is, therefore, optimistic about the outlook for the UK market.”
A spokesman for analyst Hannon Westwood said there were signs the market was tight for 2012. He added: “For several months we have been predicting an upturn in drilling activity during 2012.
“Our intelligence shows that the number of aspirational wells forecast for drilling will easily outstrip the rigs available, adding further pressure to the pool for 2013 and beyond.”
Awilco’s results showed the firm, which employs about 25 people at Westhill and 186 offshore, had first-quarter pre-tax losses of nearly £3million on revenue of £14.7million. It is still paying back costs of buying and upgrading two rigs it acquired when it was founded in 2009.