Drilling Rigs 101

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Canada’s drilling fleet is always changing to incorporate new technology and meet market demand. Most noticeably, the Canadian drilling fleet is growing in numbers. The fleet has 40% more rigs than it did 15 years ago. Today, the rig fleet offers just over 600 rigs.

For the most part, a rig is a rig is a rig. For example, all rigs have a derrick (the mast-like structure that holds the pipe to be lowered into the well bore) a catwalk that holds the drill pipe, a rig floor where floorhands handle the drill pipe, a drawworks which is the machinery that hoists and lowers pipe and a blowout preventor that enables a driller to control well pressure.

But different size rigs are used depending on the drilling target formation. Oil formations tend to be deeper than gas formations. When investors are most interested in producing oil, large rigs are in high demand. When the market prefers gas production, small rigs are in demand. Western Canada has plenty of both gas and oil, and activity cycles back and forth between preferences of one over the other.

Drilling rigs come in three sizes: singles, doubles and triples. These categories refer to how many lengths of pipe can stand in the rig’s derrick. On a single, the derrick holds one length of pipe. A double holds two, and a triple holds three.

A tall derrick isn’t necessary to drill deeper. If more pipe is needed to drill deeper, a single section of pipe is hoisted to the rig floor and added to the drill string. But sometimes the entire drill string needs to be pulled out of the hole (to change the drill bit, for instance). A derrick that holds multiple lengths of pipe comes in handy and helps the crew to complete this evolution quickly.

A crew working on a triple is able to pull three lengths of pipe out of the hole before unscrewing the pipe. The Derrickman, working from the monkeyboard, sets the ‘stand’ of pipe in the derrick. Then the crew pulls up the next three joints of pipe. This evolution is called ‘tripping’.
The larger derrick is efficient to drill deep wells but isn’t necessary for shallow wells. Single rigs drill wells that are around 1 to 2 kilometres deep. These wells usually access gas basins. Single rigs and their crews change drilling locations often, sometimes every day or every other day.

Doubles and triples are larger rigs with bigger substructures and taller derricks. These rigs drill between 3 and 6 kilometres into the earth and might be at the same location for several months to complete deep drilling operations.

Singles, doubles and triples refer to conventional rig categories. Additional new categories of rigs have introduced different ways of handling pipe. For instance, some companies run coil-tubing rigs that stream tubing from a large reel instead of using drill pipe, or automated drilling rigs that are outfitted with a pipe-handling arm that raises the pipe into the derrick, eliminating the need for a derrickhand to work from the monkeyboard.

Through the 1990s, rig activity focused evenly on the two commodities. Then in 1998, there was a shift: gas wells began to make up the bulk of drilling activity. Through the early 2000s, rig activity increased year over year, but gas wells—which are shallower and can be drilled faster—far outstripped the increase in oil wells. Between 2001 and 2006, oil wells made up about 25% of rig activity, and gas wells 75%.

The drilling industry reacted to this demand by expanding the fleet. In 2007, the rig fleet grew faster than it ever it had before: 49 rigs were added. Most of these new rigs were the smaller ones best suited for gas drilling. Then in 2008, natural gas was on the market in abundance, and the stock market price of natural gas started to fall. Investors pulled back on gas drilling. In 2010, industry was back to an even split between gas wells and oil wells.

And then the turn-around happened: oil drilling overtook gas drilling in western Canada. In 2011, 61% of the wells drilled were seeking an oil formation, versus the 39% seeking gas. Today’s market continues to favour large rigs that can reach deep oil formations. There also is increased interest in accessing these formations at an angle: rig crews drill a well bore that curves toward a drilling target. Drilling rig contractors have been adding equipment in 2013. Unlike 2007's fleet expansion, these rigs will be the larger, heavier rigs, primed for oil drilling.