In an exclusive survey for Hart Energy’s new Market Intelligence reports, seven North American rig manufacturers reported that the market for newbuild rigs was robust, with significant orders from top-tier drilling contractors. Of eight manufacturers surveyed, just one reported soft demand.
The newbuilds are destined for domestic and international markets, with the domestic market absorbing the lion’s share. Out of 116 reported orders, 28 orders (25%) are slated for international use. That percentage could grow in the future, with two manufacturers expecting international demand will soon outpace domestic demand because of the growth of horizontal shale plays outside of North America. Other survey findings are:
• Pad drilling is influencing rig designs and orders. All participants in the survey note that new land rigs are being equipped with pad-friendly walking systems or skidding systems. “All new rigs have top drives, walking equipment and a swing-up substructure for two row pad drilling,” said one top-tier manufacturer.
• Current newbuilds are predominately 1,500, 2,000 or 3,000 horsepower (HP), and power packages are diesel AC and diesel SCR.
• The average cost for a new 1,500-HP rig is $17.4 million, with the overall prices ranging from $12 million to $22 million, depending on features. Two respondents estimated new 1,000-HP rigs cost $8 million-12 million.
• Manufacturers are filling orders in six months, with three months to nine months as the range. “Our current lead time is shorter because we now have pre-built a lot of common components,” noted one manufacturer.
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