Thursday, October 21, 2010

Valuing Land Drilling Rigs in France

GoIndustry DoveBid were recently tasked with valuing land drilling rigs.  A small proportion of the worldwide land drilling rig population is located in Europe. The majority of these wells are located in France, where there are approximately 4000 land oil and gas wells. Most of these are in use, despite the slump in global oil prices. A favorable tax regime is a positive incentive to keeping these rigs going. However, many of the gas wells are becoming exhausted and need closing.

Productive wells require regular drilling or work-over to keep them operating efficiently, and exhausted wells have to be re-drilled prior to them being closed.

The exploration and development of new oil fields in France, provides new and exciting opportunities. In addition to this, the French Government is also supporting the geothermal energy incentive.

There are a surprisingly high number of small oil wells in the countryside East of Paris. These little 'nodding donkeys' can often be seen from the motorway. The majority of the gas wells are located in the South West of France, centered around Lacq and Pau. Some of these fields were developed over fifty years ago, bringing them close to retirement.

The European and, in particular, the French rig operation and drilling regulations are extremely strict. Although there are many used rigs on the market with Houston based dealers at this time, it can be very costly to adapt these for use in France as they are not directly comparable. The increased number of machines on the market reflects the low oil prices.

For further information please contact GoIndustry DoveBid