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The World According to Wayne: New vs. Used Equipment

By Wayne Nash
September 1, 2009

At various times in our careers, we have to make equipment purchases to grow our business or due to changes in the business environment. Most drillers spend a lot of time and research deciding between new equipment and used. There are many sound reasons for either choice, and I will try to expand on some of the ones that come to mind. This probably is going to turn into one of those “on one hand, on the other hand” pieces, but I’ll do my best.

Sometimes new equipment is the only way to go. When technology or customer requirements change, sometimes new is the proper choice. When we have the opportunity to double our productivity, it’s an easy one. We all love to stand around the trade shows, admiring the new rigs with all the bell and whistles. A rig with a built-in coffee pot, flat-screen TV and automatic dog waterer would sure be nice. Or a water truck with a built-in barbeque and refrigerator. The problem is that all these things cost money.

Unless you have an overwhelming amount of work or a dedicated contract, it’s hard to justify the payments, plus depreciation. A new rig needs to be working every day to justify its existence. The upside: New rigs usually don’t require a lot of modification and repair; normal maintenance will keep them running for many years. Often, the equipment that you need just is not on the used market. Changes in drilling practices have made us realize the need for more sophisticated equipment that was just not on the market a few years ago. Things like the new-model grouters and sophisticated mud systems are fairly new technologies to the water well business, and the drillers who have them aren’t parting with them, due to the obvious productivity gains over their competitors.

The other choice is used equipment. The first reason most drillers choose a used rig is price. A used rig can save you a lot of money, but it comes at a cost. First is maintenance. I wouldn’t depend on all the records in the world about oil changes, mud pump rebuilds, how new the drill pipe is without checking them myself. This is going to take time and money that was not in the original deal. Be prepared.

Next on the list comes modification. The rig might have been perfect for the area where it drilled, but if you are doing anything different, you will need to make changes to suit your local drilling conditions. A good example: Some years ago, a large number of rigs were built for the shot-hole business. They had good mud pumps, as well as a large piston compressor mounted because the drillers didn’t really know whether they would need mud or air on the shot lines. Most of the time, it was air, so the mud pumps were nearly new. Other than that, they were very similar to the usual mud rigs that people were looking for. I know several drillers who bought them and put them into house-well service. They drilled great if they were properly maintained, but when it came time to air-develop a well, the big drilling compressors were just too much. This led to a deal where the driller would put the rig in a much lower gear to slow down the compressor to usable output and develop the well.

One thing about those old piston compressors: They have an oil pump inside to lubricate the pistons and bearings, and running at 5 percent of their rated speed, they just didn’t oil. I’ve seen several locked-up compressors because of this. The best course would have been to remove that big, heavy boat anchor, sell it, and install a smaller development compressor suited for the task. I ran into this some years ago on a 1500 GD I was running. I didn’t have time (or money) to change the compressor, so I did the next best thing. It was a six-cylinder GD compressor, so I took it apart and defeated four of the cylinders. This made it a two-cylinder compressor, just about right for development, run at rated speed.

Point is: Most used rigs need some modification to suit your purpose. Take this into account when you latch on to the deal of the century. Basically, you either are going to spend time and money on maintenance, modification and repair, or you are going spend money on payments – your call.

Sometimes an older model rig is the right one for the job. For instance, if you are looking for a table-drive rig, there are not nearly as many built nowadays as there were a few years ago. Everybody seems to have fallen in love with top-heads. A lot of us old geezers, however, still like a rotary table.

The choice of new or used takes a fair amount of research and due diligence to see which fits in your drilling program.

On a side note: I’ve never been well-off enough to afford a new rig or a brand-new truck. I did have a brand-new wife once, but it turns out the upkeep was unaffordable, and besides, she was not rigged up for my purpose. (I was 32, she was 19; what was I thinking?) I went back to used ones, properly rigged up. A little paint and some new ornaments, and the latest one has lasted me 24 years so far.
ND

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Wayne Nash is a regular contributor to The Driller. He can be reached at rockbit8@hotmail.com.

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