I have considered this option before, MightyMac, since TECO has 4-5 (some people say 6) rigs sitting around. Why not put some of these rigs to use and have them start generating revenue instead of collecting rust?
Well as it turns out, none of TECO's rigs are large enough to be capable of drilling wells in any of the current 'hot-spots' such as North Dakota or Kansas where the the demand for rigs is at record highs. Additionally, none of TECO's rigs are suitable of use drilling horizontal well-bores, which is where the demand is.
Each of TECO's rigs will require about $2 million dollars worth of secondary rig equipment before they will be ready to drill for conventional, shallow targets. This equipment includes, but is not limit to the following: Mud Pits, Shakers, SEC, BOP Stack, Accumulators, Sub-Structure, Rotary-Table, at least 2 Large Industrial Generators, at least 2 Mud pumps, etc, etc... Without this minimal equipment, TECO will never find an operator who will pay them to utilize their rig. The demand of all of this equipment, new or 2nd-hand is higher than it has ever been, which will make it rather costly to get these rigs up & running - It would probably be cheaper to hire a drilling contractor (it would certainly save tons of cash from losses due to downtime while TECO pieces their rig together - Rigs that have been stacked for long periods of time, or rigs that are recently rebuild/refitted with the equipment mentioned above are notorious for downtime until all the kinks get worked out).
Note: If drilling their own wells, TECO could probably get by with only 1 mud pump & perhaps 1 generator (if the Texas RRC gives the okay). This will save them about $0.5 Million of the $2 million quoted above, but this only applies to TECO wells, not if TECO were to try & be a drilling contractor.
TECO has a bad habit of calling their work-over rigs by the name 'drilling rig'. In truth, TECO owns zero drilling rigs. They own several work-over rigs / pulling-units, that are capable of drilling a few thousand feet & are often used to set conductor casing before a real drilling rig is moved in to drill a well. TECO brands their equipment 'drilling rigs' because it sounds better in investor's ears
Good Luck on the Texas Wells. In truth there is not a lot of upside on these prospects. Best case scenario, these wells reach payout in 18 months, if TECO deems the wells worthy of running-pipe (the cost of casing & completions).
Regardless the quality of TECO's TX wells (if ever drilled), I'm sure that there will be a press release that suggest they have hit an unbelievably huge oil find... Let's wait & see if they drill one, then let's wait & see if I'm right about the announcement...
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