“This may slow down the drilling comeback when prices eventually climb back up.”
On the contrary, the new units that have to be purchased will be the latest state-of-the-art machinery available.
The incentive of rising prices will greatly enhance the margin of profit, therefore the means to purchase the more-advanced machinery.
Unlike consumer goods, goods used to produce other and more valuable goods get amortized fairly quickly, and no doubt, had they been in service at the original locations, these units would have been replaced anyway.
If they want to reuse the old rigs, they will have to replace what was cannibalized.
After equipment has been abandoned and rusting for several years, at some point it will make more sense to buy new rather than to try to bring the old stuff back up to safe operating standards.
Nothing new here. Happens every time.
When you aren’t making enough money to buy grease what else would else would anyone expect?
It’s a very natural and you might say necessary thing to do...
If equipment sales are off it's not likely manufacturers are building new state of the art equipment until new orders start coming in. Businesses just don't have inventory anymore
As long as they cannibalize from their same company, it sounds like good business. I’m guessing cannibalizing is the new scary word for reusing. Gotta have a scary word for everything these days.
This uses to be called thriftiness. Often related to Yankee ingenuity.