"For our drilling members, the project has been more about tightening definitions and creating an upload option for quick and easy reporting. For service rig members, the CAODC Rig Data Project will open new opportunities."
- CAODC Vice-President, Operations, Nancy Malone
Early in 2012, the CAODC Board of Directors decided to make activity data a CAODC priority.
Rig data is a valuable commodity. Individual contractors, financial analysts, government bodies, and the general public all access industry data to understand what’s happening in the field and across the sector.
Until now, CAODC has only been indirectly involved with activity data. CAODC members report rig activity to two major rig activity publishers, and the Association is mainly peripheral to that data collection. CAODC enforced no standards for what defined rig activity. For this reason, activity statistics sometimes vary from one publisher to the next.
CAODC is working toward three objectives with the Rig Data Project:
Drilling contractors are long familiar with the benefits of reporting data and sharing across the industry. Says Nancy Malone, CAODC Vice-President Operations, “For our drilling members, the project has been more about tightening definitions and creating an upload option for quick and easy reporting.”
For service rig members, the CAODC Rig Data Project will open new opportunities.
“Right now, there is very little in terms of accurate service rig data, and we’d like better information,” Malone notes. “How much time are service rigs spending on oil wells versus gas wells? What do operating hours for the fleet look like in Saskatchewan compared to Alberta?”
One of the first conversations CAODC raised with its service rig division: ‘How many hours are in a service rig’s day?’
When a drilling contractor says ‘operating day,’ the meaning is straight-forward. A drilling rig runs 24 hours a day, 7 days a week. Based on this traditional uniformity, ‘full utilization’ is also easily understood.
But for service rigs, ‘full utilization’ has been known to shift with the times.
Back in the 1980s, service rigs ran like drilling rigs, 24-7. But economics, competition and other factors influenced the service rig fleet to shift to ‘daylight’ schedules. By the 90s, 8-hour days became more common. Around this time, the CAODC Service Rig Executive Committee formally pegged full utilization at 2,808 hours per year or 234 hours per month.
The service rig fleet then shifted again. A lengthened workday become common: operations began to run ten hours instead of eight. In 2001, the CAODC Service Rig Executive Committee revisited their definition: the committee decided to base “full utilization” on 10 hours per day, 365 days per year (or 304 hours per month).
The definition of ‘full utilization’ carries a fair bit of importance. Analysts and government tend to identify utilization percentages as quick measures of industry activity. It’s important that the definition appropriately captures fleet capacity.
Last March, the Service Rig Executive Committee returned the full utilization discussion as part of the Rig Data Project. The committee decided that full utilization should take into account both available equipment and the current predominant operating practice. The committee concluded that it’s still appropriate to calculate full utilization based on 10-hour days, 365 days per year.
The workday on service rigs still has some variance – a small segment of the fleet does operate on 24-hour schedules. In light of this, the new platform for data capture will not attach a maximum value for the field that captures operating hours.
“Consultation has been a key piece of the preparations,” says Malone. “We have great teams in place who have been reviewing the evolution of the project and offering feedback. This project has gone to our executive committees and our Board several times, and additionally, a test group – one that reaches out to both publicly-owned and privately-owned rig contractors – has been meeting regularly.”
Adds Malone, “The test group has been extremely valuable in identifying how the project will improve the quality of data and streamline the work associated with reporting.”
CAODC has a successful history as a coordinating resource for the Canadian rig fleets. For example, service rig contractors benefit from CAODC advocacy every time they move equipment, thanks to the Memorandum of Agreements that the provinces established with the CAODC Service Rig Division.
Once CAODC is integrated with the rig fleet’s operating statistics, the Association will be able to respond better to trends in activity. And this could mean reviewing the definition of ‘full utilization’ at regular intervals.
Information collected through the Rig Data Project will be shared with CAODC drilling and service rig members as a membership benefit.
Even if a contractor anticipates this data won’t directly benefit their operations, the detailed database will be an indirect benefit: CAODC will be better able to highlight industry’s economic impact when advocating for its members.