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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Grommit who wrote (25967)7/19/1998 12:07:00 PM
From: Big Dog  Read Replies (2) of 95453
 
Grommit -- There is confusion about rig utilization numbers. Maybe I can help a little.

A rig can be "under contract" but "not working" -- meaning they are being paid but are not active on a job. The rig cold be between locations, undergoing inspection or maintenance, or under some other temporary situation.

Example:
ADTI (a turnkey company that is part of GLM) has about 12 jackups contracted from various drilling contractors. The owners of these rigs get paid every day, but ADTI may not have work for the rigs every day.

Regardless of the definition, rig use is declining.

One note -- typically the later months of the year have higher utilization as oil companies E&P departments try to spend the balance of their money in the budget rather than give it back to Big Daddy to build a gas station with.

And just maybe the oil companies are giving the drillers a good spanking for being so cocky when rates were headed north and rigs were tight....remember the letter from Amoco? Paybacks are hell.

If you aren't a subcriber to Offshore Drilling Bits, you missed a great (so say the readers) Issue Number 5 with the lead "story" It's The Oil Price Stupid! Subscribe for free at jump.to
There is also an archive of past issues at that site. Number 5 will be there in 2-3 days.

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