Velociraptor Rig Combines Speed, Capability of Coil Rigs and Jointed Pipe
“This issue here is not lower oil prices, it’s learning how to operate more efficiently within the tighter price range of oil,” said Larry.
While most people will say the story of 2015 is that oil prices have plummeted, what’s really happened is that West Texas Intermediate crude has settled into a range between $45/barrel and $55/barrel and haven’t moved much outside of that range. The year 2001 was the last time that a market was confined to such a tighter band.
“The challenge now is for crude oil producers is to start making money within this range. At the beginning of 2015, many were convinced that oil production would erode and decline with oil prices below $60. What has happened since the start of the year is that oil production has peaked at 9.6 million barrels per day (bpd) in June, and while oil has continued to fall to below $40, we have maintained domestic production of crude oil above 9 million bpd.”
This was achieved by finding better technology, particularly in rigs, said Larry. Rigs that can advance current technology and improve efficiency are going to be widely sought after. The idea now is to make more money with what’s available, and that will have some cost, but a necessary one.
“I think that as we continue to discover oil prices within a range at least next year and possibly 2017, we’re going to see more producers move forward by concentrating efforts on technology and efficiency as the key to increasing bottom line margins,” said Larry.
One idea is rigs that can process more “Big Data” and can learn from discrepancies during all phases of the production cycle. Increases in rig and other new technology innovation could boost efficiency while decreasing initial capital and operating costs.
Chris Specziale, president of HXR Drilling Services, said that today is a good time to roll out new drilling rig technologies because there is always a “bug in the system” that can take weeks or months to address.
“Coming off of a price downturn, with the future still a bit suspect, I would think companies that had already rolled out and perfected new, more efficient technology will be the first to get new contracts.”
“No operator wants to be a guinea pig for a service company – they were promised something, they expect that; not months of glitches and technical issues that, for a large part, may be on their dime,” Specziale told Rigzone in an email statement.
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Senior Editor | Rigzone