With the final days of 2006 upon us, we will be taking a look back over the last twelve months to see what changes and trends have been occuring within the offshore rig fleet. This will be the final Weekly Offshore Rig Review of 2006, so we hope this year-end review is helpful and informative.
Utilization Holds Steady
When looking at types of rigs, utilization as still consistently high throughout the year. However, more varaition does come to light. Looking at the floating rig fleet of semisubs and drillships, utilization was near 85% at the start of the year and then dipped to 83% in June and July before rising back up to 85% by the end of the year. Meanwhile, jackups followed a contrasting trend, with utilization near 87% during the first quarter, climbing to 89% in July and then dipping back down to 87% in November.
Day Rates Continue to Climb
Besides rising average day rates, the day rates at the highest end of the spectrum also rose quite remarkably during 2006. In January, the highest day rate being earned was $325,000 by the Noble Paul Romano, a 6,000' 4th-generation semisubmersible. At the time, that was the highest day rate on record. Prior to that, only four rigs had earned day rates of $300,000 or more.
While $325,000 was remarkable a year ago, day rates have pushed so high during 2006 that rates above $400,000 are more common than rates over $300,000 were in 2005. A new peak day rate was set when Transocean's 5,400' 4th-generation semisubmersible Jack Bates earned $477,000 per day from Woodside for work offshore Australia during August through November. As of December, no rigs are currently earning that much, but five other rigs are now earning more than $400,000 per day.
Also during 2006, the number of rigs earning at least $300,000 per day has risen from four rigs in January to 29 rigs in December. In fact, there are more rigs earning at least $300,000 in December (29 rigs) than were earning at least $200,000 in January (25 rigs). Similarly, the number of rigs earning at least $200,000 per day has increased from 25 rigs in January to 71 rigs for December.
Rig Fleet Growing Strong
In addition to the rigs that were delivered this year, another 27 jackups, 27 semisubmersibles, 10 drillships, 2 tenders, 1 inland barge, and 1 platform rig were ordered. Most of these rigs will be delivered in 2008 and 2009.
May the holiday season and the new year be as good to you as 2006 has been for the rig fleet.
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