Drillers Offered Choices on Drilling Rig Financing
One of the biggest problems many drillers face is staying ahead of the game. Some with older equipment have high maintenance costs and frequent downtime while competitors may be drilling wells in half the time. Others may be seeking ways to expand yet can't resolve the issue of how to pay for the equipment they need. More than ever, drillers need to understand their financing alternatives to determine what works best for their situation. Let's explore the three ways to pay for large capital expenditures: cash, bank financing and leasing.
If we had the cash, should we put it all into a new or newer rig? Cash is certainly the easiest and cleanest approach, but it is not always the best solution for all circumstances. The answer depends on what other cash requirements we may have: working capital, other equipment needs, emergencies and other investment alternatives.