AWO Prospectus PETROJACK offer - COSL Drilling Europe AS
AWO Prospectus PETROJACK offer - COSL Drilling Europe AS
AWO Prospectus PETROJACK offer - COSL Drilling Europe AS
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The figure below demonstrates the link between jack-up rig demand and oil prices with a 1 year<br />
time lag.<br />
Source: Enskilda Securities<br />
# active jack up rigs world wide<br />
360<br />
340<br />
320<br />
300<br />
280<br />
260<br />
240<br />
220<br />
200<br />
jan. 89<br />
jan. 90<br />
jan. 91<br />
jan. 92<br />
Demand Jack up rigs Oil price 1 year ago<br />
jan. 93<br />
jan. 94<br />
jan. 95<br />
jan. 96<br />
jan. 97<br />
As illustrated above the offshore rig market has experienced both booming periods (1995-97) and<br />
soft markets (1998-2000). However, since bottoming out late 2001, demand for jack-ups has<br />
increased steadily and current status is characterized by firm markets in all key regions and<br />
segments.<br />
Supply<br />
The current fleet of jack-ups comprises 404 units, including 70 non-competitive units (typically<br />
owned and operated by national oil companies and not actively marketed to others). For the<br />
purpose of this document, the total fleet is referenced if not otherwise noted.<br />
There are currently 39, 350ft and above jack-up rigs on order representing 10% of the total fleet.<br />
10 of the new buildings are for delivery in 2006, while 14 are scheduled for 2007. The current lead<br />
time for new buildings is above 30 months, and potential additions of new buildings will not enter<br />
the market before 2007. Awilco Offshore owns four of the new buildings currently in order.<br />
Aging world fleet<br />
The majority of the current operating rigs were constructed in the late 1970’s and early 1980’s, and<br />
the average age of the fleet is 23 years today. Roughly 75% of the current fleet is between 20 and<br />
27 years old, and only 4% of the current fleet is less than 6 years old. Although the useful lifetime<br />
of rigs is difficult to predict, it is expected that new requirements for drilling deeper and more<br />
complex wells will require replacement of older assets over time. In addition attrition of units due<br />
to accidents, conversions and retirement has been in the range of 2-6 units annually over the last 5<br />
years.<br />
jan. 98<br />
jan. 99<br />
jan. 00<br />
jan. 01<br />
jan. 02<br />
jan. 03<br />
jan. 04<br />
jan. 05<br />
45<br />
40<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Oil price (brent)<br />
37
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