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Drillers Refurb, Upgrade Rigs for Unconventional Work

From the October 2010 issue of The Land Rig Newsletter:

Just as fast as shale-suitable rigs in the 1,000 and 1,500 hp classes are being built, drillers are also scrambling to refurbish and upgrade rigs in those horsepower classes—or to get them there.And the emphasis is on making them shale-suitable. We recently surveyed 47 drillers regarding their plans for refurbs and upgrades, and the results are telling. Almost half of them acknowledged plans to refurbish or upgrade their rigs. Generally, plans include adding top drives, engines or generators, and other components to rigs’ drawworks configurations in an effort to upgrade the horsepower rating to 1,000 hp or greater to drill horizontally. Some plan to upgrade power packages to AC to drill more efficiently. Another common refurb was to boost mud pump capacity.

In addition to refurbishing older rigs, 10 surveyed drillers plan to build a total of 27 new rigs, mostly in the 1,000–1,500 hp range. Of the 27 new rigs under order or likely to be built, drillers reported that a dozen of them will be powered with AC electric motors. One Permian driller said he plans as many as three refurbs in 2011, expanding drawworks capacity from 550 hp to 750 hp in order to ready them for work in the Wolfberry combo play. A driller concentrated on California and the Rockies is bolstering drawworks capacity on his 800 and 1,000 hp units. A Midcontinent driller plans to convert his 1,000 hp mechanical rigs to electric, even as he has two 1,500 SCR electric newbuilds on order.

There isn’t much confusion about what’s driving the activity, according to one midsize South Texas driller: “Anything less than 550 hp won’t be upgraded. Everyone is looking for fast-moving, quick-drilling rigs. As hands get used to them, they will be drilling much faster. There are not enough new rigs to go around.”

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