Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: IndioBlues who wrote (44859)	5/17/1999 12:35:00 PM
From: Aggie	Read Replies (1) \| Respond to of 95453

indio, hello. I know you addressed your question to Big Dog, but I may be able to help out here. In my experience, the rig contract is a pretty extensive document, and the events leading up to its signing are often quite protracted. Usually an invitation to tender is issued for a rig, giving a general well plan so that the prospective contractor can select an appropriate rig for the work. The tenders are processed by the oil company and a short list created. The short listed contractors are called in and initial negotiations are conducted to see if an appropriate price and list of equipment and services can be hashed out; it's not too uncommon for the short list to be narrowed down to 2 or 3 contractors at that stage. Meanwhile, inspectors are dispatched to the proposed rig(s) to check them over: look at the mud pumps, drawworks, drillpipe, maintenance records, etc., to ensure they are not getting saddled with a hunk of scrap iron - this happens more often than you think! A contractor is finally selected when a mutally agreed contract looks iminent. The selection is formalized with a letter of intent from the oil company to the contractor. At this stage, the rig is almost always specified by name, and the rig is certainly specified by name in the contract (and also by the rig equipment specification, which is part of the contract as an attachment or appendix). The short answer is "No, the contract is almost always rig-specific", but an oil company is generally amenable to any discussions if it would involve saving some buckeroos - for example, if a good rig were found at a cheaper rate than the oil company could get by direct contract. Good Luck, Aggie