Capital costs can mean the difference between embarking on a new exploration or oilfield project or not doing it at all. But without new projects or exploration, how can you grow your business in a downturn? It’s a conundrum many oil & gas companies are facing while they’re waiting for oil prices to go back up – which realistically seems like something that’s going to happen soon.
Renting is the solution to large capex equipment costs
The costs of new equipment for an exploration project can be huge – and risky. If not enough resources are found, the equipment eats into profit margins. Sure, you can use it for the next project, but that’s if there is a next project. Renting your surface production equipment can offset the large capex costs of purchasing new equipment, making new exploration projects a possibility rather than a probability for your business.
How much can you save? Instead of spending hundreds of thousands of dollars on new equipment, renting one of our Vapour Tight Complete Single Well Batteries will cost you around $5000-$6000 per month, depending on the project. Spend more money on drilling and less on equipment.
Installation, setup and moving costs
Projects are usually not right next to each other, making it easy to transport old equipment to a new site. Companies like OSY Rentals will come to your job site with rental equipment, set it up and get it running – saving you valuable man hours, hotel bills, and other associated costs in often remote areas. Once we get there, it usually only takes us about 4 hours to deploy a complete Vapour Tight Single Well Battery.
The ability to deploy more projects
With resource prices being at a low, production has to increase in order to see a profit. This means more projects, more exploration, and more equipment is required when resource prices are low versus when they are higher. Renting equipment can allow your business to have multiple projects on the go without overextending your cash flow.
Option of renting to own
If it looks like a project is panning out and will be more long-term than expected, you can choose to apply a portion of the rent to purchasing your installed equipment. So if you hit paydirt, you sacrifice less of your profit, and don’t have to go through the hassle of installing new equipment again, a move that could cost production.
Decrease costly procurement procedures
One of the major cost centres in any oil business is safety and signoffs on projects. Remove multiple layers of administration, engineering hours and much more by renting equipment from OSY Rentals.
Additionally, if equipment traditionally purchased becomes less than suitable for the well once in production due to sizing, renting allows for a cost effective adjustment to the problem as opposed to having to replace purchased equipment. Surplus equipment is costly and often sits unused for years.
Oil or Water?
On an exploration project, it could be oil in the ground or it could be water. If your well comes on and you realize it’s water, you can call us and we’ll move it to the next location for you, with your only charge being the rent for however long the equipment was in place. If it is oil, you can keep site operating costs lean while you are waiting for your pipeline.
Contact OSY Rentals for a quote so you can see how much your business can save on capex equipment costs when you rent.