Frank, thanks for the elaboration, maybe I was off on this thinking. Jefferies seems to echo what you and CC are saying, viz.:
"Rig Activations Suggest Compelling Economics Going Forward. With PTEN and Nabors (who together control the
majority of available stacked land rig capacity in the U.S.) spending $2.0-$2.5 million to activate 1,000+ HP rigs, we believe
that this is good evidence of each company’s expectation of a significant increase in dayrates over the next 12-18 months.
Due to the short-term contract structure in the land rig business, we believe that operating margins per rig day would have to
be significantly higher than current levels of $3,000-$3,300 in order to justify the capital being committed to refurbish some of
these rigs. In addition, given PTEN’s discipline in activating rigs and not suppressing dayrates, we view this as a positive sign
for PTEN’s operations and the industry going forward."
It just seems kinda weird that PTEN and NBR go nuts buying up all of the land rigs that came on the market in the last 3 years, and then they just let most of 'em sit around. Big Dog, I thought these two characters controlled 85% of the land rig market and the rest were all very small, maybe I mis-heard this. |
