Technical Due Diligence on Six Land Rigs
A Major Operator in the Middle East planned to acquire 6 drilling rigs (land) and needed an independent party to report the present condition and state of the rigs and its associated (drilling) equipment as well as spare parts.
Client Challenge:
The client planned to acquire 6 drilling rigs (land) and needed an independent party, experienced in condition surveys and evaluation of land rigs, to report on the present condition and state of the rigs and their associated equipment and available spare parts.
The reports included an equipment rating and detailed checklist with items inspected and findings, this to enable consistency between the rigs and justification of the rig inspection results.
Insight:
The work scope agreed was:
Documentation Review
- Outstanding maintenance / Inspection and overhaul reports
- Individual equipment due date for a major overhaul.
- ORM Certification
- Stacking and Preservation Procedures (where applicable)
- Breakdown data
- Scheduled shutdown data
- Running hours
- Spare parts available
- Spare parts on order and
- Spare parts immediately required.
- Checked for major upgrades (or investments), rebuilds on the rigs, life extensions or any planned on any of the rigs
Asset Due Diligence Inspection
- A visual inspection of drilling related equipment such as Drawworks, Mud pumps, BOP’s. The visual inspection results were verified against documentation reviewed in in the initial phase.
- An inspection of the generator sets and their current operational and maintained condition. All upcoming and recent previous major overhauls were reviewed and highlighted.
- An inspection of the generators, switchgear, SCR’s & VFD’s, related transformers and cabling and any AC/DC motors.
- A cursory inspection of Operational Drilling equipment Mud systems, Drill-pipe handling gear, Derrick and Rig Structure.
- A cursory review of safety systems and auxiliary systems present in order to define if additional systems are required to ensure the rigs are ready to drill. This included the available accommodation skids with the rigs. The inspection team did review and comment on any major work that can be expected to meet current accommodation standards.
- On-site verification of maintenance history and records
- Review of the on-site available spare parts for critical equipment and any parts on order.
Due Diligence Report Compilation
Upon completion of the documentation review and rig visits, the Lead Surveyor did return to ModuResources head office and with the support and guidance from the ModuResources Technical Director and Singapore based team, did compile the final Due Diligence report.
Results:
As part of the Due Diligence report, a dedicated technical report was created for each of the six rigs. A financial fair market valuation was completed for each rig by a recognized and accredited valuation partner. Details and justification was reviewed by the ModuResources technical director and with comments and justification provided to the client as requested before and during discussions with the relevant parties involved.
Why ModuResources?
ModuResources' diligence and the step by step traceability with the assessment process being well documented, did provide all parties involved with sufficient credible data to come to a swift agreement for the fair value of the assets inspected.
