Marketed rig utilization increased in March

April 5, 2021
Evercore notes that demand is improving with a net increase of five jackups and one floater recently re-contracted.

Offshore staff

NEW YORK CITY – Utilization of marketed offshore rigs crossed the 80% mark in March, according to Evercore ISI’s latest Offshore Oracle report. The marketed utilization for both floaters and jackups increased by 279 basis points and 145 basis points respectively to 80.2% and 80.9%.

While some of the increase is attributable to rig attrition with the industry retiring 10 units over the past month (five floaters, five jackups), demand is improving with a net increase of five jackups and one floater recently re-contracted.

This includes Maersk Drilling’s ultra-harsh environment jackup the Maersk Reacher, which has been warm stacked for nearly a year off Denmark since completing an accommodations contract in May. The 350 ft jackup secured a nine-month contract with Aker BP to assist with well intervention, stimulation and accommodation at the Valhall field beginning in July, with the $33.4 million contract value for 270 days implying a non-drilling rate of $123,700/day.

Overall there are 38 jackups and 23 floaters (excluding contracted newbuilds) waiting to start new contracts in the coming months, which is on par with levels seen early last year before the start of the pandemic.

In addition, the report noted the following trends:

  • The working floater and jackup counts increased for the fourth straight month and are approaching 100 and 300 units respectively.
  • There are 25 newbuild floaters and 36 newbuild jackups under construction, of which three floaters and two jackups are contracted.
  • Rollovers are down slightly from a year ago, with 17 floaters and 33 jackups scheduled for 2Q currently, down from 20 floaters and 36 jackups a year ago.
  • Floater marketed utilization is highest in South America at 96.4% (+292bps m/m), SE Asia at 87.1% (+1121bps m/m), NW Europe at 86.7% (+222bps m/m), and US GOM at 85.7% (unchanged).
  • Jackup marketed utilization is highest in Mexico at 92.7% (-183bps m/m) and the Middle East at 85.5% (+170bps m/m), but improved the most in NW Europe by +482bps to 78.3%.

The report also noted that there are 46 floaters and 89 jackups cold stacked currently, and utilization should continue to improve as rig contractors continue to retire assets.