Pioneer Drilling Corp. is building more walking rigs to accommodate an increase in multi-well pad drilling in unconventional plays, particularly in the Bakken, the head of the San Antonio, Texas-based drilling company told a Texas audience recently.
“The tendency is going to be for more and more operators going to pad drilling,” CEO Stacy Locke said at the UBS Global Oil and Gas Conference in Austin, Texas, May 24.
Multi-well pad drilling allows operators to reduce their unit costs by bundling drilling and completions crews and reduce their environmental impacts by building fewer pads.
To accommodate the demand, Pioneer plans to add 10 new-build walking rigs to its fleet over the coming year and “more walking features for pad drilling” to its existing rigs.
The walking rigs can move forward up to 100 feet on hydraulic shoes.
Of the 10 new rigs, seven are headed for the Bakken, while two will go to the Marcellus Shale and one will go to the Eagle Ford Shale. The rigs bound for the Bakken and the Eagle Ford are 1,500 horsepower rigs with 2,000 horsepower mud pumps, which Locke said “allows you a lot more gallons per minute across your down haul motor to increase your penetration rates and keep your bore hole clean in the long horizontal lateral plays.”
With the additional delivery, Pioneer will operate 16 drilling rigs in the Bakken.
Walking, not skiddingAlthough some use the terms “walking rigs” and “skidding rig” synonymously, Locke insisted on making a distinction between the two technologies. With a skid rig, he said, “you have got to put your wellhead in a cellar” dug beneath the rig, but “gas accumulates in the low areas and it is a safety hazard and a lot of operators don’t want to do it.”
By comparison, “we build with our rigs with a festoon system. … You plant your backyard, your mud tanks, your mud pumps, your generator houses, your (variable-frequency drive) houses, all in one spot. ... It picks up and walks on its hydraulic feet as far as 75 to 100 feet forward and all the electrical just tracks along with this festoon system.”
Additionally, some operators using AC rigs “will most likely have to retrofit some of their rigs to put some new mast and (substructure) on them that will walk instead of skid.”
Don’t ignore vertical wellsThe rise of pad drilling shouldn’t overshadow the market, though, Locke said.
While horizontal rigs accounted for almost 60 percent of the total domestic rig count last year, more than 60 percent of the actual wells drilled were vertical or directional wells less than 11,000 feet deep, according to information from Spears and Associates Inc.
“All of the new-build rigs that we are building and others that our competitors are building, they will not drill those wells,” Locke said. “You do not need a 1,500 horsepower joystick top-drive rig to drill a 10,000 or 11,000-foot vertical hole.”
That imbalance is creating a “bifurcated rig market” that will favor drilling companies willing to retain the high-end mechanical rigs in the fleets, in addition to building electrical rigs capable of drilling to 20,000-foor unconventional wells, Locke said.
“There is a huge segment of the market that people don’t really talk about,” he said.