Drill Out Equipment

Many smaller exploration companies look for ways to save money on drilling oil and gas wells. One way to do so is to lease or rent a drill out package instead of buying one or hiring a service to do the work. This lets them drill one or a few wells without making a huge investment in drill out equipment. As expected, it often saves on labor costs as well. The main downside to this is that the company has to have its own crew to operate the machinery. If the right people are already on staff, this isn't a problem. However, if they aren't part of the team yet, the need to hire people can cause delays.

Expanding companies, on the other hand, often find that it's better to go ahead and buy a drill out package. Then, there are no concerns about equipment availability. Also, when equipment is going to see plenty of use, it is usually cheaper in the long term when it is purchased outright. Finally, a purchase can sometimes allow access to more-modern versions of machinery. Of course, when the equipment is obtained this way, the company must also provide the crew.

New energy companies often find that neither solution is optimal. That's because they don't yet have full-time operators for drill out equipment. Then, it's usually best to hire a company to bring out its own crew and drill out packages. Hiring out the entire process gives the fastest results since the crew already knows what it's doing and typically has plenty of experience. This, however, is the costliest option.