"There's a lot more movement of used equipment than there is of new and it always will be that way," reports Delaney Erickson, sales representative for Venture Drilling Supply, Tahlequah, Okla. But Erickson does mention that while Venture sells twice as much used equipment as new, in the past couple of years, his firm has been moving more new equipment. "We're a distributor for Ingersoll-Rand as well as brokers of used equipment, so we see both sides of it." He cites initial investment as the main attraction of used rigs. "Used equipment is so much cheaper up front. The cost of getting into it is relatively minimal when compared to getting into a brand new rig," he says. "For example, say a new rig costs $450,000. We took a '95 model and rebuilt the deck motor, the compressor, the table - almost everything on it. It went for $250,000 and it's almost as good. We'll put anywhere between $30,000 and $50,000 to completely go through a rig, including sand blasting and painting."
Commenting on the size of the used drilling equipment market, Craig Higgins, owner of Higgins Rig Co., Hodgenville, Ky., says, "We do a lot more business today than we did 10 years ago. That's all we do for the most part - other than new parts and so forth. Probably 98 percent of our stuff is used." Higgins says that 90 percent of the time when a new rig is sold, a used one becomes available. "Occasionally someone will add one to the fleet, but, for the most part, another piece of iron is freed up in chain-reaction style," he explains. "Say, for instance, someone trades in a '95 for a 2001 model. The 2001 is gone, the '95 is sitting there as the next link in the chain. Somebody with a '85 model is going to want to trade up to the '95 model, so now the '85 is available. The guy with the '79 wants the '85."