What does Rig Utilization Rate mean?
Rig Utilization Rate is the percentage of the number of rigs that are operating compared to the total available rigs. It is a measure of operating efficiency of an oil company.
Futures Knowledge Explains Rig Utilization Rate
Rig is required to drill wells to explore and produce oil and gas. The number of rig deployed, commonly known as rig count, is a good measure of ongoing activities in oil fields. Oil producer's capacity is based on the number of rigs that are operating in proportion to the total available rigs. A high utilization rate means that a producer is operating at high capacity pumping more oil and generating higher revenues. The rig utilization rate went down with oil price decline since June 2014.