The Offshore Drilling Industry and Rig Construction in the Gulf of Mexico by Mark J. Kaiser & Brian F. Snyder

Author:Mark J. Kaiser & Brian F. Snyder
Language: eng
Format: epub
Publisher: Springer London, London

Fig. 6.3Utilization rate over the rig lifecycle in the variable utilization model

6.2.3 Parameterization

The model was parameterized under an expected and optimistic scenario (Table 6.2). Under the expected scenario, capital cost is $200 million, active and stacked operating cost is $60,000 and $10,000/day, bond interest rate is 4.5 %, bond maturity is seven years, and the tax and discount rates are 15 % [6]. Under the optimistic scenario, capital cost is $175 million, active and stacked operating cost is $50,000 and $6,000/day, bond interest rate is 3 %, bond maturity is 15 years, and the tax and discount rates are 10 %. Reactivation cost of $5 million is incurred in any year a rig is reactivated from a cold-stacked condition.Table 6.2Newbuild model parameterizations

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