1. Drill Rig Financing Options

    March 10, 2017 by Savannah Adkins

    There are plenty of ways to go about financing your drill rigs, but which option is going to help you best achieve your overall business goals? To answer this question, it is pertinent that you first understand the ins and outs of the various financing options offered from lenders. From there, you will be able to make an educated decision that not only fits your budget but aligns with your company’s strategic plan.

    Jake Rockafellow, Rig Source’s Controller outlines below two of the most common finance options typically offered for drill rig purchases. Take a minute to review each lease option for a better understanding of the terms, pro’s and con’s.

    Option 1: Full Payout Leases (Capital Lease)

    This lease allows buyers to finance 100% of the drill rig purchase price including freight, taxes and extended warranties. The buyer owns the drill rig at the conclusion the lease.

    • Pro’s:
      • Buyer has full ownership of the drill rig upon maturity of the lease
      • Tax advantages:
        • Monthly interest payments are tax deductible
        • Depreciation expense is tax deductible
    • Con’s:
      • Higher monthly payments compared to a fair market value lease (outlined below)
    Option 2: Fair Market Value Lease (Operating Lease)

    This lease allows the end user to finance less than 100% of the total purchase price including freight, taxes and extended warranties. The end user DOES NOT own the drill rig at the conclusion of the lease.

    • Pro’s:
      • Lower monthly payments compared to full payout leases
      • Payments are “moldable” to meet the end user needs
      • Improved profitability and cashflow
      • Monthly payment is tax deductible
    • Con’s:
      • Early termination fees could apply if the lease is terminated prior to its original maturity
      • Additional costs could apply upon return of the drill rig to the leasing company if more than normal wear and tear is present

    Still not sure which route to take? Try looking at the sample drill rig purchases to see a side by side comparison.

    Rig Source Finance Infographic

    As a final note, “keep in mind that drilling is a fairly niche industry, and not all finance companies are familiar with drill rig sales. Be sure to take your time, search and even ask your drill rig supplier for finance recommendations,” states Rockafellow. Reputable drill rig suppliers typically have excellent partnerships with lenders, who are educated in drilling equipment, and are more likely to extend a financing offer to your company. For more drill rig financing information, please give Rig Source a call at 630.365.1649. We have over a decade of experience getting new and returning customers alike into the drill rigs of their dreams.



  2. AEMA Annual Meeting & Exposition – Booth #334

    November 21, 2016 by Savannah Adkins
    AEMA Logo
    Rig Source is proud to be exhibiting at the American Exploration & Mining Association’s Annual Exposition going on December 7-9, 2016 at the Nugget Casino Resort in Sparks, Nevada.

    Just two short months after exhibiting at the world’s largest mining show- MINExpo 2016, we are back in the presence of the mining industry to continue educating members on the benefits and uses of crawler carriers. We’ve chosen to return to the AEMA exhibition because it has a history for attracting thousands of attendees from all over the world dedicated to mining technologies and developments. Rig Source has a long standing reputation for providing exploration drillers top notch drilling equipment, including track mounted drills, and we firmly believe the industry will benefit from further use of tracked vehicles. As a dealer for Terramac crawler carriers we offer exploration drillers the equipment necessary to reach remote site locations and explore problematic terrain. More recently, the rubber tracked technology of Terramac carriers has been used for dust suppression, tailings pond management, dam and dyke repair and general right of way construction projects.

    To learn more about the benefits and uses of crawler carriers, or to discuss other exploration drills and equipment available through Rig Source, please give us a call at 630.365.1649.



  3. End of Year Savings

    November 15, 2016 by Savannah Adkins
    Section 179 and Bonus Depreciation Available for 2016 Purchases

    Do not let the year slip by without taking advantage of special tax benefits on new and used equipment purchases. Both Section 179 and Bonus Depreciation have been approved for a limited time through December 31, 2016. In order to qualify for these tax breaks, you must purchase or finance your equipment by December 31, 2016.

    Rig Source has a complete inventory of drill rigs and crawler carriers ready to start working on your next jobsite project. We offer sales on both new and used equipment in order to meet the needs and budget of every customer. Within our own shop, we specialize in servicing the industry leading, brand name equipment you’ve come to rely on, and even work direct with manufactures on customizations. Our dedicated sales team is knowledgeable in every type of drilling and can work with you to build a rig to suit.

    Understanding The Benefits

    2016 Deduction Limit = $500,000

    • This deduction is good on new and used drill rigs or crawler carriers, parts and other business assets.


    2016 Spending Cap on Equipment Purchases = $2,000,000

    • This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis.

    2016 Bonus Depreciation = 50%

    • Bonus Depreciation is only available on new equipment, and is generally taken after the Section 179 Spending Cap is reached.

    Section 179 and Bonus Depreciation Chart

    At a 35% tax rate, tax savings would be $206,500.00 ($590,000 x 35% tax rate)

    For more information on equipment eligible for Section 179 or Bonus Depreciation tax credits, give Rig Source a call at 630.365.1649.

    *For more information regarding the details of Section 179 and Bonus Depreciation, please contact your local government agency and tax advisers.



  4. MINExpo 2016

    September 15, 2016 by Savannah Adkins
    Minexpo LogoUncover Rubber Tracked Mining Applications

    Rig Source is scheduled to accompany crawler carrier manufacturer, Terramac, LLC to the International MINExpo tradeshow. The show takes place on September 26-28 in Las Vegas, Nevada. You will find us in the Central Hall – Booth #4639, we can easily be spotted by Terramac’s unique 360° rotating crawler carrier on display. MINExpo is considered to be the largest mining equipment and service exhibition in the world and draws in thousands of exhibitors and attendees from within the industry.

    For over a decade Rig Source has been actively serving the mining industry by providing new and used mineral exploration drill rigs as well as service and support. We pride ourselves on the ability to customize drills to meet customer needs. Track mounted mining equipment reduces the ground pressure exerted and allows equipment to access confined jobsites or problematic terrain with ease and without damaging sensitive ground. Rig Source began utilizing Terramac crawler carriers for track mounting drills due to the unique chassis design, simplistic approach to customizations and outstanding service, support and parts availability. Since, we’ve been able to expand our services to the mining industry by offering additional track mounted mining support equipment for mineral exploration, dam and levee work, settling pond construction, site maintenance, water-way and land restoration, tailings pond management and dust control.

     

    MINExpo only comes around once every four years so you won’t want to miss this opportunity! For more information on how to find us at MINExpo, give Rig Source a call at 630.365.1649 or add Booth #4639 to your exhibitor list using MINExpo’s Online Show Directory.



  5. Core Drilling Rig Rental Fleet

    December 17, 2015 by Savannah Adkins

    As a leading core drill rig supplier for the mineral exploration market, we’ve seen firsthand how the market fluctuations are affecting you, and have adjusted our support to best suit your changing needs.

    Mineral exploration may be a volatile market right now, but don’t let that stop you from taking on core drilling jobs as they arise. It has been our experience that fluctuations in the core drilling market tend to run in cycles, but always find their way back to the top. There is a great deal of money to be made in the core drilling industry, but many core drillers must struggle through the industry lulls in order to experience the benefits of the markets booms.

    One of the most common grievances we’ve heard from our core drilling customers during periods when the core drilling market slows is the high cost associated with core drill rigs. To buy and adequately maintain a quality core drill rig for the varying projects won can be difficult when the frequency of incoming work is unknown. That said we’ve developed core drill rig rental options that are more cost effective for you in an unpredictable market.

    Core Drill Rigs for Rent

    With flexible rental terms available, we now offer Atlas Atlas Copco Core Drilling Rig RentalsCopco core drilling rigs for rent in two various sizes. The Atlas Copco CS1000 rig is the smaller of the two units, and is used for drilling depths up to 3,500 ft. while the larger, Atlas Copco CS14 unit will accommodate drilling depths up to 5,052 ft. Both drill rigs are equipped with PQ heads. (Various core drill rig tooling packages are also available from Rig Source.)

    *Depth capacity varies based on tooling selection. 

    To find more information on our core drill rig rental units available, give Rig Source a call today at 630.365.1649.

     



  6. How Economies of Scale Produced the Big Oil Companies We Know Today

    October 27, 2015 by Savannah Adkins

    The term “economies of scale” might as well have been invented for the oil and gas industries. Think about how much it would cost to start a new company with the vision of prospecting and drilling for oil, refining it, and selling it as gasoline. It would cost you billions of dollars to sell that first gallon. But we know too that the oil and gas industries are highly profitable. In fact, even with oil prices slumping, oil and gas companies make up half of Fortune’s 10 largest companies.

    Looking at the actual scale of these companies, the numbers become staggering. Consider the following.

    • Collectively, the world’s 10 largest oil companies produce around 40 million barrels of oil per day. That’s enough to fill 2,543 Olympic sized swimming pools, or 40 million standard-sized American bathtubs.
    • The collective revenue of these companies in 2014 was $3.26 trillion. That’s greater than the GDP of the United Kingdom.
    • Oil and gas companies are also huge employers – Chinese-government-owned Sinopec, the world’s largest oil company, employed 358,571 people at last count. That’s over double the number of people employed by Amazon, worldwide.

    Of course, the “Big Oil” didn’t spring up overnight. As in all industries that benefit from economies of scale, the oil and gas industry has seen countless mergers and acquisitions. Read our infographic below to see how over a century of mergers and acquisitions have produced the world’s 10 largest oil companies.

    The mergers and acquisitions behind world’s largest oil companies.

    (more…)