Lowered gas and oil prices are making gas and oil companies look for ways to boost their efficiency. One way is to rent oilfield equipment to lessen equipment costs. Elements like storage, downtime, availability, and transport will affect equipment costs.
Due to limited resources, revenues could decrease considerably due to the significant up-front cost that comes with purchasing new equipment. Renting equipment is an excellent alternative that could also completely diminish industry barriers permitting several projects to take place at the same time.
Additionally, numerous oil field equipment providers rent specialized equipment to customers for specific projects and usually streamline the process by transporting and installing it on the job site as well.
The decision to rent or purchase equipment could have widespread consequences on operational flexibility, long-term success, and financial stability. This blog looks at the benefits that renting equipment provides that can be modified to meet the unique needs and conditions of your job site. Let’s get busy discovering the main benefits of renting oilfield equipment.
Important Factors to Consider
Regardless of your industry, when you need new equipment, you’ll need to decide whether you can afford to rent or buy. However, the decision isn’t always a simple one to make, particularly when it comes to oilfield equipment. There are some important factors to take into consideration before you can make an informed decision.
Oilfield Equipment is Expensive
Buying the oilfield equipment you need is typically more cost-effective over time if you plan on using it for numerous years. However, oilfield equipment can be very expensive, and a lot of businesses don’t have the money they need to purchase. You could either get financing to buy the equipment or rent. You must decide which choice is more economical for your budget.
Owning Equipment Means You Pay for the Upkeep
If you decide to purchase, it’s critical to consider the costs of upkeeping the oilfield equipment. If you purchase it, regular maintenance and repairs are vital to protect and extend the life of your investment. If you have a repair team in your business, fixing and replacing expenses won’t be as big of an issue as it would be for other businesses that need to outsource the work. Owning oilfield equipment requires you to pay for all the repairs and maintenance yourself. On the contrary, with renting oilfield equipment, it’s the provider’s responsibility to make sure the equipment is in good working condition.
Impact on Business Operations
You will need to consider how purchasing or renting oilfield equipment will affect your business operations. Oilfield equipment can be complicated, typically including several moving parts. You will need to be sure you have access to all the equipment you need when various job situations arise. If you buy oilfield equipment, it’s up to you to handle all the details. However, when you rent, it’s the job of the service provider to ensure you have all you need.
10 Benefits of Renting Oil Field Equipment
Oilfield equipment is usually one of the biggest investments a service company will make. That’s why the choice to rent or purchase must never be taken lightly. There are several benefits to renting oilfield equipment. Below are 10 reasons for you to consider.
Upfront Costs
The upfront equipment expense for oilfield equipment can be huge. This could be a dicey strategy for oilfield operators. If well production is meager, the cost of purchasing equipment might never be recovered. Renting equipment could decrease this risk as the upfront cost is much less than if you bought the equipment. Several rental equipment providers let you rent equipment by the day, week, or month, allowing you to complete every task on schedule on the job site.
Maintenance Costs
Another key benefit of renting equipment is the cost of maintenance. With an oilfield equipment rental company, the maintenance costs are usually included in your package. Maintaining oilfield equipment like drilling tools is a specialized skill.
A high-quality rental equipment supplier will know to guarantee that your equipment is up to safety standards and in excellent working condition. Oilfield tools need to be checked to guarantee they meet the proper standards. Ensuring your equipment is maintained and certified means staff members must have the right skills. It might be more economical to rent your oilfield equipment instead of handling these details yourself.
Timeliness
You must consider the timeline of your project and how frequently you will use each piece of oilfield equipment. If you have a huge project, you might think about purchasing the equipment that will be used during the whole duration of the project. This might work out to be the most economical answer for these items. Yet for equipment that you’ll only be using sporadically, it might be better to rent these pieces of equipment.
Over the last couple of years, the oilfield equipment rental industry has increased drastically. In fact, the business of oil drilling is thriving globally. However, oilfield equipment such as matting, trucks, mixers, pumps, and other assets could cost thousands of dollars. That’s why numerous businesses in the oilfield sector frequently weigh their options when it comes to renting or buying the equipment they need.
Cost-Effectiveness
Renting equipment is usually more cost-effective, particularly for short-term or random needs. Buying oilfield equipment could entail substantial initial costs, while rentals usually necessitate a lesser initial price. Additionally, renting eliminates expenses such as storage that could add up in the long run. It’s crucial to know the rental company’s ability to get parts and services swiftly, which could impact your satisfaction and long-term savings.
Government regulations could also raise costs when buying equipment. Renting oilfield equipment guarantees that operations are in accordance with regulations instead of needing to purchase new equipment when a current regulation is amended.
Scalability and Flexibility
Renting equipment offers better scalability and flexibility. You can simply change the rental period based on your job needs. If you must change or need various oilfield equipment for various jobs, you can take back the rented equipment and select new equipment pieces. Renting gives you access to a vast range of equipment choices without any obligation or cost of ownership.
Access to Specialized Equipment
Specific jobs might need specialized oilfield equipment that is hardly used or pricey. Renting lets you have access to such equipment without having to make a long-term investment. This is mostly beneficial for industries such as construction, where specialized machinery and tools might be needed for certain tasks.
Renting oilfield equipment usually gives you access to the most updated and current models available at an affordable price. This makes it more reliable to finish jobs successfully and fast.
Reduced Costs for Repairs and Maintenance
Owning oilfield equipment means if the equipment stops functioning, fixing it or replacing the parts falls on you. This can be laborious and expensive, particularly for complex tools. Renting shifts the responsibility to the oilfield equipment rental company, releasing you from the duty of getting the tools and machinery functioning again.
If the rented equipment stops working, the rental company usually repairs or replaces it at no additional cost to you, improving uptime since they will probably have it available as soon as possible so you can get back on schedule.
The Latest Technology
Technology is always progressing, and the latest equipment versions typically offer improved productivity, efficiency, and safety features. Renting equipment gives you access to the latest technology without the need for numerous equipment upgrades or working with out-of-date machinery. This could help you stay competitive and enhance your operational effectiveness. Renting can assist businesses by allowing them to:
- Try out the latest technologies and models
- Eliminate high startup costs
- Get access to specialized equipment
- Evaluate equipment before purchasing
- Acquire equipment knowledge
Convenience of Storage and Transportation
Owning equipment necessitates suitable storage space, which could be a challenge, mainly for bulky or large items. When you rent oilfield equipment, you don’t need to think about storage or transportation. The rental company usually handles delivering the equipment to your preferred location and picking it up when your job is completed. Some rental equipment providers will deliver all your machinery and tools to the work site when you need them.
Tax Benefits
Renting oilfield equipment could present possible tax benefits. Rental equipment expenses usually can be deducted as a business expense, decreasing your taxable income. Bear in mind that tax regulations differ by state, so talk with a tax professional to know the specific tax benefits applicable to your circumstances.
Top of the Line Equipment Rental
Whether you’re looking for oilfield equipment to rent or centrifuge rental for solids control, our equipment is available to rent by the day, week, or month. Want to learn more about how Diamond T’s equipment rental services can help you complete your job on time? Contact our team of experts today.