Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Shale’s super rigs getting bigger paychecks in the oil patch

Shale drilling operations
Cuadrilla is waiting a decision on potential fracking sites

US oil companies are spending more money on so-called super-spec rigs, machines that churn out wells much faster than older models that led the first shale boom.

Xtreme Drilling Corp., a Canadian rig supplier, said this week it has locked in more than $24 million in revenue over the next year with three contracts for upgraded super-spec rigs, pushing the rig day rates toward $22,000 a day.

And Nabors Industries, a rig contractor in Houston, recently said it has contracted some super-spec drilling rigs at prices of up to $23,500 a day, almost 20 percent higher than spot rates in places like the Permian Basin and the Eagle Ford Shale in Texas.

“Operators are clearly growing concerned with the availability of super-spec equipment,” said James West, an analyst at investment bank Evercore ISI. That’s why some US producers have been willing to boost rig contract prices by 10 percent to 20 percent, West said.

These super-spec rigs – built with a bigger load capacity and faster drilling systems – can drill an oil well in less than 10 days, shaving more than a week from the average drilling time in 2010, and allowing companies to drill a greater number of wells each year.

Matt Porter, president and CEO of Xtreme, said these higher rates show operators will pay a premium for more efficient drilling even though oil prices have slumped in recent weeks.

West said it’s possible if oil prices stay cheap next year, the US rig count could drop by 20 percent from a 2017 exit rate of about 1,000. But the bigger rigs, he said, could still “enjoy robust utilization” in 2018.

This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more click here.

More from Energy Voice

Latest Posts