Recently I was talking to a contractor who had just plopped down $200,000 for his first directional drill. The rig is self-contained, comes with 2.580 diameter drill pipe, pumps 28-30 gpm, will mix and pump bentonite and has 25,000 plus push/pull. Trailer, tanks, the whole deal. He bought the drill because his long-time client, an electric utility, said "Buy your own drill or I will not be able to keep you and the bid list." I thought you may find it interesting to hear his questions related to making this $200,000+ investment (included dedicated truck and locator equipment).

1. How long do you think this piece of (HDD) equipment will last? I have been around commercially available HDD rigs since 1989. Yes rigs are lasting longer. By that I mean most manufacturers have an evolving model that can be updated and new features added. Rigs now seem to have leveled out. The innovations are in fine-tuning electronics; rod-loading and adding gadgets that make life easier for the driller.

To answer your question, a 25,000-lb rig should last five years max. Now if you treat it like you have money to burn, which is what a lot of contractors do, it will deteriorate in less than two years. You wouldn't treat a $50,000 automobile like some people treat their drills. Park it indoors, wash it every few days, and do daily maintenance on everything from the toolbox back.

2. What wears out first? Your drill pipe should be fully evaluated annually. Wrench systems will last less than that. Check clamp pads, joint bushings and track rollers every three or four months. Fluid pump seals may last only a week, depending on what you put through them. I would have a source for gauges. Every once in a while a gauge will go bad, not to mention jumping in front of a pipe wrench or drill pipe.

3. How much can I expect it to do for me? I have upgraded my 'return on investment' in the past year. Crews today average at least onr bore a day. I used to say three a week was a good average. Now if your crew does two bores a week they won't get good at it and won't be as efficient, so don't expect them to do 20 bores a month if crunch time comes.

4. Can I expect to keep it busy? If you are a reputable contractor and not too bashful to talk to 'other utilities,' you will have plenty of work. Depending on size of your market, you may have to sub work at 60% of what you are used to getting. But, I would do that rather than risk losing a good crew or missing an equipment payment.

A caution. We have had some mild winters. I would still put a 70% factor for rain-days, hard freezes, and clients who run out of money in late October.

5. What other sources of revenue can I diversify into? This question gives me opportunity to talk about the next HDD frontier - water. Cities of any size and any age are experiencing pressure from Environmental Protection Agency (EPA) to have good, clean water. The cost of delivering potable water has gone up. Aging pipes. Get the picture. Pipe manufacturers are now targeting this market. One I talked to earilier this week that has a $15 million a year opportunity that is best achieved using HDD.

By far the biggest opportunity continues to be telecommunication. Cable and phone companies are upgrading networks. In just about every city I visit there are two to three competitors getting ready to over-build residential networks. More money than ever is being pumped into startup CLEC (Competitive Local Exchange Carriers) who are still building loops and laterals from the cross country carriers backbone.

Some other clients you should talk to include municipals for street lighting and signalization, DOT statewide fiber projects, rural electric, and telephone companies.

6. I think I have a good operator. Are HDD operators hard to find?

Keep in mind this contractor is new to HDD. When he says 'good operator' he may be referring to a guy who shows up on time, has been with him for years, and takes good care of his backhoe. NOT.

I wouldn't bet the farm on a hoe operator. Yes he is usually the best candidate, but this is a different challenge: Being able to visualize what is going on underground, anticipating obstacles well in advance, knowing how cutting and boring reacts to different soil conditions. This is a unique skill set. Yes. HDD operators are impossible to find. Find a good one. Train at least two backups and pay them all well.

7. Have I made a good investment? Yes. If you don't go out and buy a chrome-plated pulling truck and have a crew that knows what work is and have incentive to get as many rods in the ground as they can, you will make a ton of money. Prices have leveled out in most sectors. They are still ridiculous, especially for rock. Talking like a stock analyst, there is tremendous growth opportunity. HDD will not be saturated for at least five more years and good companies will have plenty of work.