By: RK Energy

Excessive costs associated with maintaining oil and gas sites are risky, the smart solution is to rent equipment instead of purchase it.

Due to limited resources, profits can drop drastically because of the substantial up-front cost that comes with buying new equipment. Rental equipment is a great alternative that can also greatly reduce industry barriers allowing for multiple projects to occur simultaneously. In addition, many oil field and construction equipment suppliers rent out specialized equipment for individual needs and often streamline the process by delivering and installing it on site as well.

There are several hidden costs to owning oil and gas equipment.

Besides the decrease in value that comes with years of use, owners are also responsible for equipment repair, maintenance, transportation and more. Renting reduces these concerns and often allows renters the option to buy the equipment down the line. Ongoing maintenance costs are typically included with a rental which avoids unexpected expenses if a piece of equipment suddenly needs service.

During a downturn, companies focus on increasing production to remain competitive and profitable.

With an increase in production comes more exploration, projects and equipment to do the job. Renting equipment allows a business to have multiple on-going projects without tying up too much cash in equipment.

Companies should look beyond rental rates when deciding on a piece of equipment or rental company.

It’s important to understand the rental company’s ability to service and obtain parts quickly which can affect long-term savings and peace of mind. Customers should consider operating costs, emissions generation, increased performance and maintenance requirements as well.

Government regulations can also increase costs when purchasing equipment. Renting equipment ensures that operations are in compliance with regulations rather than having to invest in new equipment when a regulation changes.

Renting can help operators test out the latest technologies and models, gain equipment knowledge, obtain access to specialized or temporary-use equipment, analyze equipment before buying and avoid high start-up costs and maintenance.

By: RK Energy

The recent decline in the oil and gas industry has many companies experiencing hardship. Those that have survived are working to reduce costs by selling equipment or letting it sit idly; others are bypassing well testing, equipment servicing, repairs and site maintenance.

While scrimping on equipment maintenance is tempting, companies should seriously consider retaining and maintaining their costly operating equipment and field sites. Used equipment can now be found at bargain-basement prices today. Selling equipment in a downturn will likely result in a large capital loss for the business. The benefits will lie only with the buyer. Oil and gas companies should consider that once the industry turns around, the cost of equipment will also rise.

By holding onto equipment and investing in preventative maintenance instead, operators can gain enormous savings on future repairs. Investing now in maintenance will reduce down time and extend the life of the equipment. It will also help identify potential site risks and reduce overall production costs.

If companies continue to market effectively, it could also be an opportunity to win some business from competitors who are downsizing. Rather than dismantling and selling equipment or slashing the maintenance budget, maintaining existing equipment can put companies in a position to gain market share when the industry picks up because they’ll be able to ramp up production more quickly.

Despite the significant slowdown, there is still plenty of oil to drill. When the industry is on the upswing, competitors who downsized will be forced to spend extra time and capital expense before getting back to work as they will have to replace their equipment and perform site maintenance. Those who sustained their equipment and sites will be able to get to work right away.

If you are looking for someone to maintain your oil field equipment and perform on-site maintenance, RK Energy would be happy to discuss our services with you. Contact RK Energy at rkenergy@rkindustries.com for more information.