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DRILLING MARKET FOCUS: Industry reports some price breaks as drilling contracts renegotiated

07/20/2009
Oil and gas executives report they are beginning to see some relief in drilling and completion costs, partially because service companies have become more willing to renegotiate contracts.Producers are examining variable-pricing contract structures. Such contracts typically are tied to oil futures prices or the Baker Hughes rig count.Doug Sheridan, managing director and founder of EnergyPoint Research Inc., sees a movement away from fixed-price contracts toward prices that reflect commodity prices, especially on the international oil markets.For example, a drilling contract could contain day rates based upon predetermined price points such as if crude falls below $50/bbl for 30 days, he s...
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