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DRILLINC CONTRACTS
The operator usually sends a proposal to several drilling
contractors. The proposal describes the drilling project and requests a
bid. The contractor then fills out the proposal, signs it, and sends it
back to the operator. If the operating company accepts the bid, it
becomes a contract between the operator and the drilling company.
This signed agreement clearly states the services and supplies the
contractor and the operator are to provide for a particular project.
The International Association of Drilling Contractors (IADC)
supplies popular contract forms. IADC is an organization whose
membership is made up of drilling contractors, oil companies, and
service and supply companies with an interest in drilling.
Headquartered in Houston, Texas, and with offices throughout the
world, IADC provides many services to its members, not only in the
U.S., but also in other parts of the globe. Its mission is "to promote a
commitment to safety, to preservation of the environment, and to
advances in drilling technology."
Contractors are paid for the work their rig and crews do in several
ways. Operators can pay contractors based on the daily costs of
operating the rig, the number of feet or metres drilled, or on a turnkey
basis. If the contractor is paid according to the daily costs of operating
the rig, it's a daywork contract. If the contract calls for the contractor
to be paid by the number of feet or metres drilled, it's a footage or
metreagecontract. And, as you can guess, if it's a turnkey job, then the
operator and contractor sign a turnkey contract, in which the drilling
contractor is responsible for the entire drilling operation. Daywork
contracts are the most common.

SERVICE AND SUPPLY COMPANIES
The operating company owns the well and usually hires a
drilling contractor to drill it. But to successfully drill a well, the
operator and the contractor need equipment, supplies, and services

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