SURPLUS RIGS FETCH MORE AT AUCTION

SURPLUS RIGS FETCH MORE AT AUCTION

Prices for surplus drilling rigs and related energy equipment sold at auction during 1987 increased by an overall average of 14 percent compared to 1986, Superior Auctioneers & Marketing says.

Superior is an energy equipment auctioneering company.Superior estimates 150 complete rigs were sold during the year compared with 300 in 1986. The company calls it an orderly liquidation market or one in which prices witnessed a steady increase.

The market in 1986 was wildly erratic, with large rises and falls occurring throughout the year in a random pattern, Superior says.

Of the complete rigs sold this year, more than eight out of every 10 were sold piecemeal and taken off the market. A complete rig is one with most of the major components necessary to drill to its depth capacity.

We saw 85 percent of the rigs sold at auction being sold piecemeal for their component parts, said Gary Bergman, a principal in the company.

As was the case last year, those rigs are being permanently taken off the market, out of production.

The steep and steady decline in drilling equipment prices that began in late 1981 ended in mid-1986. In 1987, overall prices were higher than 1986 prices, indicating the price increase may be a trend.