• 4 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 7 minutes Middle East on brink: Oil tankers attacked off Oman
  • 11 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 14 minutes The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 1 min The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 6 hours Coal Boom in Asia is Real and a Long Trend
  • 3 hours The Plastics Problem
  • 24 hours China's President Xi To Visit North Korea This Week
  • 14 hours Hydrogen FTW... Some Day
  • 8 mins Solar Panels at 26 cents per watt
  • 16 hours GM Considering Electric Hummer
  • 3 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 1 day Forbes: Giant Floating Solar Farms Could Extract CO2 From Seawater, Producing Methanol Fuel.
  • 3 hours Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 12 hours As Iran Nuclear Deal Flounders, France Turns To Saudi For Oil
  • 1 day Fareed Zakaria: Canary in the Coal Mine (U.S. Dollar Hegemony)
  • 1 day Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack

Breaking News:

Oil Stabilizes On Small Crude Draw

Alt Text

The Oil Company Investors Fear Most

This is arguably the most…

Alt Text

Is This The Best Dividend Stock In Oil & Gas?

Supermajors have had a tough…

Alt Text

Canada Can’t Get Its Pipeline Problem Under Control

Canada’s once-booming oil industry has…

Andrew Topf

Andrew Topf

With over a decade of journalistic experience working in newspapers, trade publications and as a mining reporter, Andrew Topf is a seasoned business writer. Andrew also…

More Info

Trending Discussions

“Walking” Oil Rigs Can Make Drilling Faster, Cheaper, Safer

The current malaise in the oil industry has placed a renewed emphasis on measures to cut costs, as producers struggle with the realities of sub $50-a-barrel oil. One of the more interesting innovations in the oil patch is the “walking” oil rig that can easily move from one well to the next, thus saving the operator the expensive and time-consuming process of disassembling and reassembling rig components.

In the United States, the advent of horizontal directional drilling technology over the last few years has resulted in opportunities for movers of conventional oil rigs, particularly in shale regions like the Bakken and Eagle Ford, where deeper and longer wells require larger rigs and bigger equipment to move them. However, as the North American rig count continues to drop, alongside lower oil prices, these conventional rig movers are finding themselves in competition with companies that make rigs that do not need to be broken down when the well runs dry.

Schramm Inc., the same company that built the drill rig that helped rescue 33 Chilean copper miners trapped underground for two months, recently unveiled a 500,000-pound drill rig that can travel hundreds of yards under its own power. The oil and gas rig can rotate 360 degrees, be operated with a remote control and load pipe automatically. Related: Does OPEC Have An Ace Up Its Sleeve?

“The T500XD rig’s futuristic control room has touchscreens and joysticks, rather than the valves and dials on conventional rigs, appealing to a generation of oilfield workers raised on video games. More than 200 sensors monitor pneumatics, oil flow and myriad other processes, ‘talking’ via satellite or Wi-Fi to Schramm's Pennsylvania headquarters and signaling any problems,” the rig is described in an April Reuters post.

The mobile rigs are smaller than conventional ones – requiring only half the amount of loads to ship – and do not require roughnecks to guide and move drill strings into a well. Instead, the work is done by an operator in an enclosed cab, meaning the new drill rigs require far fewer workers. They are also safer. Pipe handling is one of the most common activities that cause injuries in the oil industry.

The advent of pad drilling, where a number of horizontally-drilled wells are worked off a single pad, or collection of pads, has also provided a niche for the walking drill rig. Moving a rig between two conventional well sites requires “rigging up” and “rigging down,” even though the new location might be just a few yards away. With pad drilling, the fully-intact rig can be lifted and moved to the next well using hydraulically-powered “legs”, or skidding systems. At 30 feet an hour, the rig doesn’t move quickly, but it’s a lot faster than disassembling and reassembling. Related: Oil Prices Could Surge As This Country Fails To Meet Production Targets

The trend of using mobile rigs isn’t restricted to U.S. shale fields. In 2014 Schramm sold a T500XD to Energy Drilling Australia, which began drilling for Senex Energy Ltd. in Australia’s Cooper Basin and for Statoil ASA in the Northern Territory. However, the new rig isn’t cheap, and that is causing buyers to hesitate, especially as low oil prices squeeze margins. Schramm is marketing the T500XD for around $8 million, three times the price of its earlier model, the TXD.

The company justifies the higher price based on the fact that the T500XD has more electronics than the TXD, and is heavier, therefore more powerful.

But just how economical are these new rig robots? With the ability to do quicker completions and drill more wells, Rigzone notes operators can do more work with less equipment, thus saving time and money. It quotes a public statement from Carrizo Oil & Gas, a Schramm customer, as having saved $15 million over eight months “by using several TXDs for top hole work at a lower day rate and faster mobilization versus using traditional technology big rigs.”

Precision Drilling CEO Kevin Deveau has also weighed in on walking drilling rigs, saying the rigs have better drilling parts and can work across several wells, increasing profits and upping drilling speed in more locations. The company recently teamed up with Schlumberger to combine Precision’s walking rigs with the oilfields service giant’s drill bits, geological data and other tools in order to increase efficiencies in shale reservoirs. Related: This Is What Needs To Happen For Oil Prices To Stabilize

According to Bloomberg, more efficient drilling rigs helped boost the per-rig output in the four largest U.S. shale fields by at least 40 percent since the start of the oil price plunge in mid-2014. Despite low prices, producers are incentivized to keep drilling in order to maintain cash flow and limit debt loads.

“Even though the rig count is down by half, you can do more with the half that’s still working,” an analyst at Edward Jones in St. Louis told the news outlet in early September.

While walking drilling rigs are helping to improve challenging oil patch economics, it also appears the decision whether to use newer or more traditional rigs is not a zero sum game.

Sean Roach, vice president of drilling systems and services at Schramm, says while new technologies may “cannibalize” some rig demand, there will still be plenty of room for traditional rigs, with a variety of rigs needed for different wells, he told Rigzone.

However, the current low price environment is also limiting orders, as producers make do with fewer rigs for around the same amount of production as a year ago. Innovations and efficiencies are good selling points, but it’s still a tough time to be a drill rig manufacturer.

By Andrew Topf of Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Trending Discussions

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News