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Offshore Rig Status Descriptions

Drilling

Drilling status simply means that a rig is performing drilling operations at an offshore site. These units are either under contract by an operator or owner operated.

Workover

Workover status means that a rig is performing workover or well servicing operations at an offshore site. These units are either under contract by an operator or owner operated.

Accommodation

A rig working in accommodation mode is essentially acting as an offshore hotel. A rig can be deployed in a variety of situations at offshore sites to house personnel or supplies.

Older or marginal rigs engage in accommodation services more frequently than higher spec units as this type of work generates lower dayrates than drilling and workover activities. In periods characterized by reduced levels of drilling demand, some higher spec units may operate in this capacity in order to remain active.

Production

Production status means that a rig is performing production operations at an offshore site. These units are either under contract by an operator or owner operated.

Cold Stacked

In short, to cold stack a rig is similar to "shuttering" an industrial plant - workers are let go, the hatches are battened down and the rig is completely shut down. Cold stacking a rig involves reducing the crew to either zero or just a few key individuals and "storing" the rig in a harbor, shipyard or designated area offshore. Typically, steps are taken to protect the rig including installing dehumidifiers and applying protective coatings to fight corrosion, installing monitoring systems that communicate rig status information to locations onshore and filling engines with protective fluids. Although the duration of cold stacking can vary depending on many factors, rigs that are cold stacked are typically out of service for a significant period of time and are generally not considered to be part of marketable supply.

Costs are generally reduced to minimum levels, although rig owners likely will still have to pay harbor fees, insurance premiums and other miscellaneous expenses. Before returning a cold stacked rig to service, drilling contractors must hire a crew and some level of investment is usually required. The investment may come in the form of a survey, completing deferred maintenance or refurbishment.

Drilling contractors typically cold stack a rig in a cost cutting effort when they do not believe they will find work for the unit at a dayrate above cash breakeven for an extended period of time. Often, this activity is a result of a cyclical downturn in demand for a given rig type. Unit specific issues, like a significant investment requirement for a marginal rig to continue operations, can also drive the decision to cold stack a rig.

Ready Stacked

Ready stacked status means that a rig is idle but operational and is also referenced in the industry as warm stacked. A ready stacked rig typically retains most of its crew and can deploy quickly if an operator requires its services. In a ready stacked state, normal maintenance operations similar to those performed when the rig is active are continued by the crew so that the rig remains work ready.

Daily operating costs for a ready stacked unit remain close to the levels incurred when the rig is actively working. Thus, a rig is kept in a ready stacked state when its owner anticipates that the rig will be able to return to work shortly - either due to having a commitment in hand or the owner's perception that work will be secured relatively quickly. Ready stacked rigs are actively marketed and considered part of marketable supply.

Under Construction

Rigs classified as under construction are in various stages of the rig building process. Referred to in the industry as "newbuilds", these rigs have yet to be completed.

Newbuilds may be built on a speculative basis without a firm commitment for work or built to fulfill a specific requirement from an operator. If the rig is being constructed to fulfill a specific requirement from an operator, the owner may receive a firm commitment for the rig in advance of delivery or placement of the construction order.

Enroute

Enroute status means that a rig is in the process of mobilizing from one location to another. Either through their own means or with the assistance of oceangoing vessels, rigs travel between locations in a particular offshore field or between regions across the globe.

Although there is no clear rule, the operator may pay mobilization fees to the rig owner, particularly when rig availability is limited, to compensate the owner for the cost incurred to move the rig. Rigs may be enroute with or without a commitment from an operator.

Waiting on Location

Waiting on location status means that a rig is in standby mode. This status can result from a variety of factors including delays in operator plans; a problem at an offshore site; bad weather; or preparation to mobilize or drill.

Inspection

Inspection status means that a rig is either in the shipyard undergoing a survey or inspection or is undergoing an inspection in the field.

Out of service time can vary depending on the scale of the survey or inspection, and the rig may or may not be actively marketed or contracted during this time.

Modification

Modification status means that a rig is undergoing maintenance, repairs or upgrades which can be performed on location or in a shipyard.

Out of service time can vary widely depending on the work being done, and the rig may or may not be actively marketed or contracted during this time.