Things to Consider When Buying a Used Drilling Rig
All of these needs require a different rig, and the selection process is different. For instance, if you are upgrading your fleet to keep up with the latest technology, you are looking for all the bells and whistles. A new, rather than used rig, may be what you need. There are many new, latest generation rigs on the market. They may be sold for several reasons. The owner may have bit off more than he can chew. Or his scope of work has changed, or he decides that the newest generation of rig is not productive enough to justify its cost.
Upgrading your equipment is usually a pretty good — and profitable — idea, but there are exceptions. Over the years I have seen quite a few cable tool drillers look in awe at the rotary guys down the road blowing holes in the ground at astounding rates, and make up their mind that they needed to “go to the dark side” to compete. Granted, rotary drilling is usually faster, but cable tool drilling has been around a very long time for a reason.
I talked a while back to a Montana cable tool driller about why he kept drilling with cable tools. He said, “C’mon, let’s go for a ride.” It was winter, so we stopped for lunch and some much needed coffee on the way. We passed the shop of one of his competitors on the way. “See that?” he said. “Both his rigs are sitting there in a heated shop, ‘cause he can’t make any money drilling in the winter.” After a while, we pulled into a well location that he had drilled. New lot, land cleared, no shop built yet. I learned that another driller had drilled four wells on that lot and told the owner, “There’s no water here.” Turns out that driller had just purchased a rotary rig, after spending many years drilling with cable tools. He drilled four holes to almost 1,000 feet without finding anything he could produce. My friend went over there, rigged up and found a 2-foot coal vein at about 85 feet that made 15 gallons a minute — not very good water, but water nonetheless. The owner was very happy. Point is: The rotary driller blew right though the aquifer without even seeing it. But he sure was making fast hole … even cable tools have their place.
If you decide to buy a used rig, know this: A rig will cost pretty much the same whether you buy a fairly new rig that doesn’t need anything to go in the field, or buy an inexpensive rig that needs some work before it goes out. You pay either way. If you have a good shop, and are pretty handy, a used rig that needs some work can be a real bargain. You can rig it up the way you like it, for the conditions you will be working in. But it will take some time and money. If you need to get in the field right away, and the right deal comes along, a newer used rig might be just the ticket.
An often overlooked factor in buying a used rig is, why is the seller selling it? These things affect the price. It may be that his business has changed and he needs something different. It may be that he is retiring, or maybe his widow is selling it after he goes to the big crew change in the sky. A good place to find a rig is one where the driller bought it for a particular project that finished. He’s probably already written off most of the cost. There may be a bargain there.
When you look at a used rig, if possible, have the owner rig it up and drill a little with it. This will show all sorts of problems not seen in the advertising. Take someone with you that knows that particular brand and style of rig. They will know the weak points to look at. One of the most important factors that affects the price of a used rig is the truck it is mounted on. This has made, or broken, more deals over the years than the actual rig itself. It shouldn’t. A good rig can wear out four or five trucks in its lifetime. What you are buying is a rig. Trucks come and go. Don’t let an older truck fool you. Rigs can be remounted fairly easily. Also, be wary of a “Sherwin-Williams” rebuild. A fresh paint job may look good from the road, but it can hide a multitude of sins. I would rather look at a rig that needs a paint job. I can see the scratches, dings and repairs better that way. Besides, it’s probably not my company colors anyway.
I use a checklist when I go to buy a rig, whether it is for myself or I am appraising a rig for somebody else. It’s a good thing to have. It is easy to get bogged down in a minor flaw and forget to look at other things, and it is easy to get taken by one feature that you really wanted, and not look at other parts that affect the bottom line.
For more Wayne Nash columns, visit www.nationaldriller.com/wayne.