Technical Insights

5 Tips On Cold Stacking a Rig

DA

If you have a rig that’s about to go out of contract, it may seem like a financially sound idea to invest as little resource as possible into stacking it as you won’t see an immediate return on your investment.

However, adequately protecting equipment when a rig is off contract can save you from larger costs in the future. We discuss the benefits and methods of cold stacking a rig.

What does stacking mean?

There are three types of stacking a drilling rig:

Hot stack

A hot stack is generally less than six months and for operations that will resume quite quickly. This is a minor operation that can be carried out by an internal team.

Cold stack

Cold stacking is for rigs that will be out of contract for up to two years. This process places a huge focus on preventing deterioration to save costs in the long term.

Mothballing

As the name suggests, mothballing is for rigs that will be out of contract for the longer term, usually longer than two years. It is a process that requires expertise and specialist equipment from external companies and can become very expensive, depending on the size of the rig.

Why is a thorough stacking procedure so important?

With millions of dollars worth of equipment on the line, it’s important to protect your most valuable asset. Spending thousands of dollars on maintenance and storage may seem like an unnecessary expenditure on a rig that won’t offer returns in the near future. However, it could have higher financial implications in the long-term.

When the industry is in a downturn, the extra cost of stacking a rig meticulously can seem like a waste. Often, drillers divert any extra resources towards their more profitable assets. This is an easy decision to make in a depressed marketplace.

As the rig sits in the desert, open to the elements, equipment will start to seize and age. Once this has happened, it can’t be easily reversed and could mean you’re faced with eye-watering costs just to get your rig back in working order. This could lead to much higher losses than the original investment required to preserve the equipment, and could result in much more severe damage, thereby compromising future drilling contracts and revenue opportunities.

At the start of a new contract, having to do large-scale maintenance can offset schedules and impact your financial returns. By cold stacking your rig thoroughly, you’ll ensure it’s in good condition when you do return and avoid delays.

Our tips on cold stacking a rig

We’ve spoken to our partners in the industry about how to efficiently cold stack a rig for long-term cost saving.

Implement a full stacking procedure

Having a stacking procedure in place will ensure the entire process is covered. This should be a comprehensive list of key assets of the rig and how it should be stored and maintained by the team.

It’s a sizable process and having a team working from a checklist will guarantee that nothing is overlooked.

Continuously adapt your maintenance strategy

Always keep in mind that manufacturer guidelines are just a guide. They don’t take into consideration the environment the machinery operates in and procedures are not always ‘one size fits all’.

Listen to the expertise of your internal team, who are familiar with the weather conditions and the ways they have adapted their procedures to fit the environment.

Performing a full maintenance check on the rig before stacking will allow you to perform fixes and ensure essential parts will not suffer too much wear while out of contract.

Pre-stack maintenance will offset the largest cost, but you should also consider ongoing maintenance during the stacking period. Investing in regular maintenance which covers condition checks, running motors, firing up engines, turning over pumps and ensuring parts are well wrapped and lubricated.

Organise your inventory and keep records

Taking care with inventory and properly logging and storing parts will reduce costs as the items will not need to be replaced.

While the individual items don’t seem like a large expenditure, the smaller costs can quickly add up to a large bill.

If you keep your inventory in great shape, you’ll be able to utilise them at a later date. If you don’t need them for your operations, you’ll be able to sell to another company or share with another rig. This will ensure that you’ll always get value for the investments you make. Just make sure you keep the certification documents, as reselling without them may see the equipment decrease in value by up to 50 percent.

Follow special storage procedures

Some materials have unique storage needs. Ensuring this equipment is properly stored can save big money when it comes to reactivating the rig.

Perishable rubber goods

Rubber is one of the most challenging materials to take care of, especially in the desert heat. Improper storage can make the equipment useless, forcing drillers to discard parts worth thousands of dollars.

Storing in a cool, dark and dry storage area will guarantee longer life for these parts. Invest in temperature-controlled storage to keep rubber parts below 25°C and away from sunlight. Storing in a relaxed position – not hanging or stretched – is essential for properly storing this material.

Electrical Components

Electrical components should be stored in a dry, temperature-controlled room, and packaged in Styrofoam or bubble wrap. Items such as printed circuit boards should be stored in anti-static packaging and active desiccant.

Larger components such as alternating current (AC) or direct current (DC) motors should be stored with properly installed internal heaters or coolers and energised to prevent condensation or dust buildup. The motor shafts should also be rotated regularly.

Low-cost methods

While you may be thinking that the stacking process seems extensive and costly, this doesn’t have to be the case.

Generally, rigs are well maintained by the hard-working personnel on-site. Stacking is a part of that ongoing best practice. There are some fantastic low tech solutions that can help save you money in the long term. Here are just a few:

Protect moving parts

Ensure all moving parts such as tool joints and hose ends are covered with corrosion inhibitor spray and wrapped with corrosion prevention tape, such as Denso Tape. This will protect the steel from being exposed to the elements and prevent any pitting, rust or corrosion.

Keep a clean rig

It may seem obvious, but a regular cleaning procedure can help to avoid problems further down the line. That means getting into those hard to reach areas where dirt and debris can build up and removing contaminants. Once clean, you can add grease or a protective coating to parts without any concerns of wear happening underneath. It’s also important to cycle valves open and closed while cleaning to get rid of any trapped dirt.

With the above tips, you’ll be well on your way to efficiently cold stacking your rig and saving time and resources in the process.

Want to discuss maintenance and replacement parts on a rig due to be stacked? Get in touch with our team and we’ll advise on the steps you should take.

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