Oil driller says its high-tech rigs can’t compete with cheap crude

Even the most technologically advanced drilling rigs are finding less work as oil prices crash. Oklahoma oil driller Helmerich & Payne expects 40 to 50 of its souped-up drilling machines to come off the market over the next few weeks, after 11 of those models went idle in the past month, it said in an investor presentation Tuesday. The firm added it has seen spot prices for its so-called FlexRig units fall 10 percent, and some oil companies are dropping out of contracts early. It’s a marked decline for rigs that had emerged in recent years better equipped than old mechanical models to take on dense shale formations, powered by AC top drives and capable of “walking” between drill sites with huge mechanical feet. Pressure on those rigs shows just how widespread the impact of the oil’s $58-a-barrel slide will be, as Helmerich & Payne’s new models are the cream of the crop in the U.S. land rig market, said Rob Desai, an analyst with Edward Jones. “H&P is one of the stronger operators,” Desai said. “Other players are probably going to be hit even harder.” Twenty-six U.S. land rigs stopped working last week, with a dozen of those idled in Texas, according to Baker Hughes, which has reported declines in the U.S. rig count for four straight weeks. Fourteen of last week’s idled rigs were horizontal drillers, which target shale plays...more