Utilization for Small Horsepower Rigs Increased
Tuesday, August 23, 2011
While ≤500 hp rigs still lag all others in terms of utilization, in fact, their improvement in that area has led the way this year. This smallest class of rigs was hit the earliest and hardest by the recent downturn. Since the beginning of this year, however, utilization for this class has jumped by 33% vs. an aggregated gain of 4% for the other four combined rig classes. What’s driving this improvement? Beyond oil price strength, according to The Land Rig Newsletter’s Biweekly Report, there has been a big increase in the number of active operators, notably small private operators who also had the largest increase in active rig count (15%) among operator classes. This reflects the many small operators who don’t typically drill year-round. The Land Rig Newsletter team sees loosening credit availability and a generally improving climate for investor interest in drilling for and producing oil. At the same time, small drillers are keeping a tighter rein on marketed rig numbers. Consequently, ≤500 hp rigs are, if not exactly thriving, no longer on life support.
Category: U.S. Land Industry Review
Rig Fleet Utilization