AGR: Operators should take advantage of falling rig rates

AGR, an independent well management company, is urging operators in the North Sea to capitalise on increasing availability and falling rig rates.

During the company’s annual rig briefing to operators in London last week (Tuesday, 8 July 2014) delegates heard that a softening rig market means that operators need to grasp this opportunity to secure a rig for their drilling projects at a significantly lower cost than the high rates seen recently.

AGR Rig Team Leader, Duncan Weir, discussed the cost-cutting initiatives many operators are embarking on in response to the recent surge in rig demand. This has resulted in options lapsing and excess time being available on long-term contracts, meaning sublet time emerging and even early termination of contracts. Weir urged operators to progress future drilling activity where possible if they are to make the most of these rate reductions and availability.

Duncan Weir said: “It’s accepted that there are difficult times ahead for drilling contractors. The dip in North Sea activity offers significant opportunities to capitalise on lower rig rates. We’re seeing reduced day rates as well as mobilisation and de-mobilsation numbers across the board and availability is steadily increasing. This situation provides new opportunities.

“To take advantage of the current situation operators should be drill ready and have progressed well preparation in advance.”

Last year, AGR took an innovative step by creating a dedicated Rig Team to ensure that the best available rigs are secured for their clients’ projects. With unrivalled experience in managing rig campaigns in the major oil hubs around the world, AGR is well positioned to facilitate rig access and secure preferential rates for parties involved.

The briefing also heard that taking advantage of AGR’s Well Control Insurance facility, where footage rates for “AGR wells” are lower than operators’ without a track record, can ultimately save operators millions of dollars.

AGR recently celebrated drilling its 500th well project. The latest milestone in the company’s successful development represents an average of one new drilling project started every 10 days since 2000.