Whether you’re looking to go into the oil and gas business with your first rig, or an established drilling business with the desire to expand or have other branches, you have to buy a drilling rig.
However, different types of oil and gas businesses also require a different drilling rig. Sometimes, people make a mistake with buying one and that leads to a negative return-on-investment.
So here are different considerations that you need to take before you buy a drilling rig.
Used Drill Rigs
When deciding to buy drill rigs, one question that comes to mind is if you’ll purchase used drill rigs or new ones. However, if you finally decide to buy a used drill rig, remember that the treatment of companies to the rigs will differ.
They may have used it harshly, or gently. Also check the hydraulic systems and other parts of the rig if there aren’t any issues present.
Continuous use of your old drilling rig will wear out its productivity and quality, even when it’s not obvious. So, buying a new drill rig provides you with more productivity and possibly help you drill more meters.
It will also decrease uptime and have more safety measures installed. Having more safety measures will reduce cost of a drilling contractor.
The Drilling Company
Besides the improvement in technologies, you also have to consider how the drilling company is doing things. For example, their productivity with their employees on producing new drill rigs if it’s still high-quality.
Another consideration you should make in checking the drilling company is their ability to mobilize contracts.
There are times when you should expect drilling companies to have longer lead times. Whenever the inventory is high, production of rigs isn’t maximized and lead times are reduced.
However, if the inventory is low, drilling rig production will be faster so lead times will be increased.
Whenever your old rigs break down, the down time can affect your productivity and reduce your profit. It can also affect drilling contracts and the costs will start piling up. It can be due to the loss of productivity, uptime contractual obligations, and repair costs.
So, having a new drill rig can keep a contractor from getting kicked off a contract.
When you’re buying a new drill rig, there are several options out there, and some are super cheap. While it may be tempting to buy those, you have to consider the total cost of ownership.
Take your time calculating the price of each of the replacement parts and you’ll find that it would help you in the long run. At the end of the day you’ll have to do at least some homework and research in finding a drilling rig that best suits your business goals and needs. We trust that our list of considerations have informed you of all the necessary details to look into before buying the first and best option you find.