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Well Service | Workover Rigs - 844/80 Double drum draw works. looks to be recently rebuilt. Has new Lebus Grooving on Tubing Drum. Comes w/ 250 HP 2 speed jackshaft/RA BOX. More Info

Well Service | Workover Rigs - CARDWELL KB200B Freestanding Oilfield Workover Rig / Service Rig / Pulling Unit, Service Rigs, Used Cardwell KB200B Freestanding Service Rig, 5 Axle Carrier, Detroit 8V71... More Info

Well Service | Workover Rigs - WELL SERVICE RIG - COOPER 350 Well Service Unit p/b DETROIT 8V-92 Diesel Eng, ALLISON 750 Trans, 42X12-38x8 DRAWWORKS w/dual disc assist, 97’ 200,000# Telescoping M... More Info

Well Service | Workover Rigs - CROWN 350 SERIES -- SERVICE KING 104" 205,000# DERRICK, CAT3406, ALLISON 5860,38X10 DOUBLE DRUM DRAWWORKS, CROWN SHEAVES REBUILT 2013 MAIN26”X4,SANDLINE 22”, NE... More Info

Well Service | Workover Rigs - 2008 Crown/Cabot 1058 Service unit mounted on 4 axle carrier w/Detroit 60 Power. New 5860 Drop Transmission. 72" Double rod/single tubing Derrickmast 125000# Rig is in Ex... More Info

Well Service | Workover Rigs - WELL SERVICE RIG - FRANKS 1287-160-DTD-HT D/D Well Service Unit p/b DETROIT 8V-71N Diesel Eng, ALLISON CBT-4460-1 Trans. SERVICE KING 96" 180,000# Hydraulically Raised & ... More Info

Well Service | Workover Rigs - FRANKS 300 D/D 1287 w/hydromatic brake, Well Service Unit p/b DETROIT 8V-71 Diesel Eng, ALLISON 750 Trans, (Reman Dec 2011) FRANKS 96’H 150,000# Tri-Scope Telescopin... More Info

Well Service | Workover Rigs - FRANKS 658 D/D Well Service Unit p/b CAT 3406 Diesel Eng, ALLISON HT-750 Trans, FRANKS 96’H 180,000# 4-Leg Telescoping Mast, Hydraulically Raised & Scoped w/4-Sheave... More Info

Well Service | Workover Rigs - FRANKS 658 D/D Well Service Unit p/b Series 60 Detroit Diesel Eng, ALLISON 5860 Trans, 102’H 225,000# (on 4 line) Telescoping Mast, Hydraulically Raised & Scoped, Db... More Info

Well Service | Workover Rigs - IDECO H35 96̢۪ 210,000 MAST, DETROIT 60 SERIES ENGINE, ALLISON 5860 TRANSMISSION, REFURB 2005, IDECO DERRICK REPLACED WITH NATIONAL DERRICK, TUBING DRUM CON... More Info

Well Service | Workover Rigs - IDECO RAMBLER H-35 Oilfield Workover Rig / Service Rig / Pulling Unit, Service Rigs, Used Ideco Rambler H-35 workover rig / service rig / pulling unit, 4 axle carrier, De... More Info

Well Service | Workover Rigs - 2015 INTERNATIONAL PAYSTAR 5900 Flushby Unit. C/w 2003, Refurbished in 2015, Western Fab Ltd. flushby unit, s/n 03-09-1008, 50 Ft. Mast height, 50,000 lb. pull rating, fr... More Info

Well Service | Workover Rigs - 2005 KENWORTH T800 Flusby Unit. C/w Lash Ent. flushby unit, 47 ft mast, slant compatible, 3x5 Gardner Denver triplex pump, 5000 psi, 2005 Advance 8m3 tank, TC 406 code, P... More Info

Well Service | Workover Rigs - 2003 KENWORTH T800 Flushby Unit. c/w Online flushby unit, 47 ft. mast, slant compatible, Pullmaster HL25 wotking winch, Pullmaster PL5 catline winch, 2002 wabash two comp... More Info

Well Service | Workover Rigs - 2005 KENWORTH T800B Flushby Unit. c/w Online flushby unit model 50-50, s/n 24641, 40 ft. mast,Salnt compatable, Pull master HL25 and PL5 winch, Gardner Denver 3x5 triplex... More Info

Well Service | Workover Rigs - WELL SERVICE RIG - FRANKS 1287-160-DTD-HT D/D Well Service Unit p/b DETROIT 8V-71N Diesel Eng, ALLISON CBT-4460-1 Trans. SERVICE KING 96" 180,000# Hydraulically Raised & ... More Info

Well Service | Workover Rigs - FRANKS 300 D/D 1287 w/hydromatic brake, Well Service Unit p/b DETROIT 8V-71 Diesel Eng, ALLISON 750 Trans, (Reman Dec 2011) FRANKS 96’H 150,000# Tri-Scope Telescopin... More Info

Well Service | Workover Rigs - FRANKS 658 D/D Well Service Unit p/b CAT 3406 Diesel Eng, ALLISON HT-750 Trans, FRANKS 96’H 180,000# 4-Leg Telescoping Mast, Hydraulically Raised & Scoped w/4-Sheave... More Info

Well Service | Workover Rigs - FRANKS 658 D/D Well Service Unit p/b Series 60 Detroit Diesel Eng, ALLISON 5860 Trans, 102’H 225,000# (on 4 line) Telescoping Mast, Hydraulically Raised & Scoped, Db... More Info

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Search our current inventory for new and used service rigs for sale from all the major manufacturers. No minimum bids or reserve prices on all equipment items, including service rigs at our auctions. More new and used service rigs added daily! Bid in person or online in the comfort of your home.

Mandy Raps, Marketing Manager says Dragon Products decided to open this equipment yard to fill a need for customers and give them an attractive alternative to equipment auctions.

“Dragon’s been buying and selling new and used equipment for years, but we recognize the value we can offer to customers in both direct sale and consignment options given the current climate in our field. Auctions have some inherent risk and we can help customers get top dollar for their equipment, Raps says. “Customers might be looking to liquidate idle equipment and we can meet that need and potentially offer them a better financial result.”

The expansive, conveniently located site now houses 40 acres of the highest quality used, surplus and refurbished oil production equipment, Raps explains. Through Dragon Products’ used and surplus equipment program, customers can choose from hundreds of frac tanks, trailers, workover rigs, drilling rigs, water transfer pumps, and stimulation equipment from Dragon and other leading manufacturers.

Dragon Products, LTD is a U.S. owned and operated company that offers a wide range of quality, durable products for storage, hauling and more. Their equipment and inventory include stimulation equipment, rigs, tanks, trailers, surface production equipment and more. To learn more about Dragon Products, LTD, visit dragonproductsltd.com

More Positive Rig Anecdotes. Hardly a huge sample size, but our Dallas trip revealed further upbeat rig anecdotes as one private E&P will increase its rig count from one rig to two rigs (+100%) and another private will purportedly increase its rig count from ~4 rigs to ~8 rigs (+100%).  Both of these players are oil-directed E&P’s.  Separately, this past week LPI issued its Q2’21 operational update which included a preview to 2022.  In keeping with the positive rig theme, the company will add a rig in Q2’22, moving from 1 rig to 2 rigs.  Again, a 100% increase.  In another region, a private E&P shared it will increase its rig count anywhere from 30-60% in 2022 vs. today.  The commentary is consistent with prior DEP reporting.  Also, we were encouraged to hear PTEN report on the PES acquisition conference call the pending 2-rig increase in PES’ working rig count (going from 12 to 14 or +16% in Q3).  Finally, we kicked off our land drilling update calls visiting with one private rig contractor on Friday who sees a 25-33% increase in its rig count between now and year-end.  Increases for this player will largely be private E&P’s.  Take all these anecdotes together and it paints a healthy picture for our land drilling friends.  Two things to note.  The bulk of the increases are with private E&P’s, thus one can’t simply extrapolate 100%-type increases to their public brethren.  Two, if public E&P’s do intend to ramp their rig count, they might want to start locking up rigs now as the private players are accelerating.  The next round of rig additions will come with higher pricing.  Our private land drilling contact, for instance, is presently assessing further dayrate increases of $1,000-$2,000/day.

Near-Term Completion Activity.  Diverging views on completion activity, but the majority of our field contacts see stable near-term completion activity.  We point this out as we suspect some may look at the recent rise in drilling activity, coupled with the high commodity price, and conclude a sharp uptick in completion activity could unfold this quarter.  We don’t think so.  Instead, we envision a ~5-7% q/q gain in industry completion activity.  The rig count, meanwhile, averaged ~439 rigs in Q2 (per BKR).  We see the U.S. land rig count in Q3 averaging ~470-475 rigs, a +7% q/q improvement.  Finally, we continue to believe today’s U.S. active frac crew count hovers in the ~215 vicinity.  We know there are those who see the U.S. frac crew count north of 235 fleets, but we are still unable to find those extra 20 fleets.  Our estimated count, although not perfect, is a bottom’s up approach and is “active” not “working” thus the effective fleet count would be lower than our ~215 active tally.  We suspect the active fleet count ends Q3 somewhere in the ~220 vicinity as private companies, for the most part, are sold-out while public companies claim an unwillingness to deploy fleets at current pricing.  Should this discipline fade, then perhaps the count could rise above our expectation, but that would require some explanation by industry leadership.  Also, labor remains problematic which is a headwind for a rapid ramp in activity.

Sometimes you just have to ask.  This week we caught up with a well service contact who shared a recent observation.  Here’s the background.  Inquiries for rigs are rising, including more unsolicited inbound calls for work.  Not new news as we have chronicled the recovery in workover activity.  However, field folks, according to our contact, remain a bit reluctant to test price, thus executive leadership has stepped in to encourage a bit more entrepreneurial vigor.  Namely, if a call comes in, the new edict requires the yard manager to test price.  Prior to the decree, the company’s hourly rates were hovering at $250/hour (base rig rate).  In the past week, the company had three inbound calls.  First quote was for $260/hour.  No push back.  Next call, rig contractor quotes $275/hour.  No push back.  Most recent call, rig contractor quotes $285/hour.  Again, no pushback.  All within the span of a few days.  What’s this tell you?  First, the company is probably still not charging enough.  Second, does a $25-$35/hour increase really matter when oil prices exceed $70/bbl?  Not a chance.  Third, dare to be great and make some money for your company.  There’s no guilt in this.  Finally, look at the recent spate of M&A announcements discussed below.  The industry consolidation process is beginning and the central message which typically is not discussed in the acquisition announcement is the potential benefit of upwards pricing.  We get it.  Trying to dictate a price to one’s customers doesn’t always jive with strong customer service, but the reality of running a capital-intensive business with gross margins sub-15% doesn’t make sense either, thus pricing needs to go up and it will as the industry consolidates.  Our bet is we see service costs +20% higher one year today than where they are now, assuming of course no COVID resurgence, OPEC+ rational guardianship persists and continued global economic improvement.

PTEN/PES Deal.  The following discussion is not a stock opinion.  Rather, we simply offer our take on this week’s announcement regarding PTEN’s pending acquisition of Pioneer Energy Services.  First, we like it from an operational perspective.  The land drilling industry, like all other OFS segments, remains fragmented thus the ability to consolidate and slash costs is a welcome outcome.  True, this isn’t a major land drilling consolidation play as PTEN, which is running 77 rigs or ~17% of the domestic market (per BKR), adds 12 working PES rigs or just ~3% of the domestic market.  Nevertheless, each and every deal leads to a more normalized market.  When one considers there are still several small land rig contractors competing in the space, some of whom have private equity / special situation interest behind them, it would seem reasonable other sellers may exist.  In the press release and as discussed on the acquisition conference call, PTEN is likely to exit some of the legacy PES businesses.  Specifically, PTEN commented about a potential sale of the PES well service unit.  No specifics were made about the PES wireline business, but we’ll assume both could go as we see neither as core to PTEN’s land drilling business.  We presume PTEN will keep the Colombian drilling business, however.  So how should one think about values of what could be two non-core businesses for PTEN?

For the well service business, PES owns 123 rigs and reported a Q1 utilization rate of 35%.  The perception from third-party well service players is positive with many placing PES at the top performer of the public well service companies (i.e. margin, utilization and rig quality all over time). When one considers the Q1 utilization rate of 35%, the natural assumption is roughly 40-45 working rigs.  We know, however, Q1 results were hampered by weather.  We also know field commentary from most well service contacts suggests a healthy q/q uptick in well service rig hours during Q2.  Therefore, establishing a valuation using Q2 results for the PES well service business seems reasonable.  Of course, we don’t know what those results are, but let’s make some bold assumptions.  The BKR U.S. land rig count increased ~16% q/q in Q2.  We believe industry well servicing activity/hours growth exceeded this, so let’s assume ~25% growth in the PES active fleet.  That would put them in the 55-60 active rigs range.  We know Q1 revenue for the PES well service business was $15M.  Let’s continue with the ~25% q/q improvement and call Q2 revenue $18-$20M.  Presumably, it’s a tad better given the Q1 weather gremlins.  But let’s settle on $20M to keep our math easy.  We also know pricing is now moving higher in well servicing (assume ~10%) and the DEP U.S. land rig count forecast calls for a ~7-9% q/q improvement in U.S. land drilling activity.  We’ll simply call the activity/pricing uplift a 10-15% q/q improvement.  Again, this feels conservative, but we’ll ballpark Q3 revenue at $22M.

As for margins, PES generated gross margins of 20% in Q1 (gross profit was $3M in Q1).  If our revenue growth assumptions are reasonable and if PES extracted 40% incrementals, that would suggest Q2 gross profit might be in the $5-7M range with Q3 margins approaching $6-8M?  Again, this is a guess on our part.  Apply a modicum of G&A burden and could the Q2/Q3 well service EBITDA be in the $5-6M vicinity?  Feels defensible.  Thus, these collective guesses would imply the well service business may have an annualized EBITDA run rate EBITDA in the $15-$20M vicinity.  So, what’s that worth?  Good question and we fully acknowledge we’re not a banker, but a 3x multiple does not feel too aggressive.  Therefore, could a strategic player value the business somewhere in the realm of $45-$60M?  Again, feels defensible.  But what about asset value?  Recent auctions suggest good well service rigs garner prices in the $300k to $400k range with old crappy rigs securing prices in the $25,000 to $50,000 range.  Remember, auctioned equipment isn’t working equipment.  Those assets don’t have customers or employees, but let’s forget that for a moment.  In this silly memory lapse, we apply a $400,000/rig value to an assumed active fleet of 60 rigs.  That’s $24M of value on an estimated active fleet.  This monkey math excludes the value of any real estate, the value of all the accompanying rental assets and gives zero value to the ~50 idle rigs.  Excluding the ancillary assets would be foolish as these assets, we contend, are key reasons why PES generally reports a higher revenue/rig hour and why its margins exceed peers.  There’s value to that equipment, but we don’t have an asset listing to quantify.  Also, important to remember that we are simply trying to develop a framework which, for the well service business, would suggest a value in the $40-$60M range.

Turning to the wireline business, the two RNGR deals highlighted below suggest a value per wireline unit of ~$500,000.  This is simply taking our estimated total transaction value of $28M and dividing by the 55 wireline units acquired.  This, of course, is an overly simplistic methodology as it ascribes no value to the acquired cranes, pump-down units and real estate.  Failure to account for those assets is clearly an error, but we’re trying to keep this quick and simple, so for now simply play the game with us.  Taking that per unit value and applying it to PES’ total wireline fleet of 77 units would suggest the PES wireline unit has a value of $39M.  Big and important difference, though, is the RNGR acquired businesses, while smaller in terms of total units, generated $30M in Q1’21 revenue vs. the $10M in revenue generated at the PES wireline unit.  Also, the RNGR acquired businesses are “currently” generating gross margins in the 12-16% range while the PES business generated Q1 gross margins in the 4-5% vicinity.  Not an exact apples-to-apples comparison as RNGR disclosed the PerfX/Patriot margins as “current” vs. the PES which were Q1.  We also believe the assets acquired by RNGR had a greater concentration of completion-oriented work which probably carries a higher margin.  That said, one would think the PES wireline business is doing better in Q2 than Q1 as we all know industry activity is up q/q.  So, let’s continue with our simplistic analysis and call the wireline business a 10% gross margin business today and assume a modicum of G&A burden, thus we’ll peg EBITDA margins in the 5% vicinity.  If we then assume the PES wireline business is growing in line the rig count, then quarterly revenue is somewhere in the $12-14M range.  We’ll call this a $50M annualized business with annualized EBITDA in the $3-4M range.  Using a similar 3x multiple, suggests a value in the $10M range.  BTW – recent auctions of used wireline units fetched average prices in the $35k-$40k range.  Assume $40k and 77 units and the collective value might be as low as $3-4M for that asset package.  One would think a strategic might look at this business simply to avoid having ~77 units hit the auction block.  Based on loose framework, it would seem a $5-10M valuation on the wireline business is reasonable.

What’s all this mean?  For one, if PTEN chose to exit these two PSLs, our Saturday-by-the-pool math suggests a value in the $50-$70M range.  Keep in mind, we are making our loose estimates on current results.  If PTEN seeks to exit these businesses after the close of the deal, which was stated as Q4 if we recall correctly, then one would hope a potential higher valuation could materialize if activity continues to march upward.  But for now, forget that last thought and focus on the announced purchase price of $295M for the PES business.  If our valuation framework is directionally correct, the implied value ascribed to the drilling business would therefore be roughly $235M.  Allocating that purchase price to the 25 drilling rigs implies about $9M per rig.  That doesn’t screen offensive to us as it creates industry consolidation at a fair price.  Moreover, given the unfolding consolidation backdrop which is developing, we believe PTEN will find interested buyers for either the well service and/or wireline businesses should it choose to pursue a divestiture.  Remember, we have recently seen (i.e. within past ~2 years) Brigade buy the NINE well service business; the BAS/CJES well service combo and most recently, the Axis/Forbes rig combination, thus consolidators in well servicing would appear to exist.  We also just witnessed RNGR buy two wireline businesses in less than three months, thus a potential buyer in wireline exists.  Now, do these companies continue their acquisition pursuit?  Who knows.  We’re simply trying to point out that a developing M&A market within two segments exists and that’s a good thing.

That year the OPEC nation seized a rig owned by U.S. contract driller Ensco International Inc in a payment dispute and U.S. driller Helmerich & Payne idled rigs in Venezuela on complaints it was not being paid.

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