Specialist

Drilling Rig Finance & Leasing

For buying and refinancing construction equipment & drilling rigs

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drilling rig finance

Clifton private finance

We specialise in sourcing drilling rig finance & Leasing options in the UK

 
 
We provide high-quality drilling rig Finance & leasing solutions for UK clients.
We can deliver enhanced, bespoke or exclusive terms through our market knowledge.  
Call us on 0203 900 4322 to discuss your requirements.
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Drilling Rig Finance & Leasing - How It Works

Understanding Drilling Rig Finance & Leasing

A drilling rig is a substantial investment, crucial for exploration and extraction in the oil and gas industry. Given the significant capital outlay required, drilling rig finance and leasing emerge as strategic solutions for companies looking to manage their finances effectively. These financing options enable businesses to access the latest drilling technology without the hefty initial expense.

Drilling rig finance and leasing fall under the umbrella of asset finance, a lending structure secured against physical assets like vehicles, equipment, or machinery. This approach to finance offers the flexibility to spread the cost of the drilling rig over an agreed period, typically through fixed monthly instalments and interest rates. Depending on the chosen finance or leasing agreement, companies may have the opportunity to purchase the rig at the end of the term or return it to the financier.

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Exploring Drilling Rig Finance Options

When it comes to financing a drilling rig, businesses have several options tailored to their operational needs and financial strategies. Here are the most common finance types adapted for drilling rig acquisition:

Each financing option is designed to align with different business models and objectives, ensuring that companies can secure the necessary drilling equipment while maintaining financial flexibility and stability.

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The Procedure for Securing Drilling Rig Finance & Leasing

Securing finance or leasing for a drilling rig is a process akin to obtaining a conventional loan, but with specific considerations pertinent to the oil and gas sector’s demands. To initiate, applicants must furnish details about their business and the drilling rig they intend to finance or lease. A robust credit history and proof of repayment capacity are essential to reassure lenders.

Monthly repayments commence thereafter until the agreement’s conclusion. The finance or leasing type may necessitate additional expenses for the rig’s upkeep, insurance, and taxation. Maintaining the rig in prime condition and adhering to the contract’s stipulations is imperative. Contractual non-compliance or payment default could lead to rig repossession and the imposition of penalties.

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Advantages of Drilling Rig Finance & Leasing

Drilling rig finance and leasing offer a suite of benefits tailored to the unique requirements of the oil and gas industry:

These benefits underscore the strategic value of finance and leasing options in acquiring drilling rigs, ensuring companies can maintain cutting-edge operations while managing financial resources effectively.

Potential Challenges of Drilling Rig Finance & Leasing

While drilling rig finance and leasing can offer numerous advantages, it’s important to consider the potential drawbacks:

When considering drilling rig finance or leasing, it’s essential to weigh these challenges against the benefits, ensuring that the chosen financial strategy aligns with the company’s long-term objectives and capacity for risk management.

FAQs

How do I qualify for drilling rig finance or leasing? 

To qualify, you’ll need a solid credit history and the ability to demonstrate repayment capability. Information about your company and the specific drilling rig you wish to finance or lease is also required. Lenders will evaluate your application based on your creditworthiness, business stability, and other pertinent factors.

How much can I borrow for drilling rig finance or leasing? 

The borrowing amount is contingent upon the finance or leasing type, the drilling rig’s value, and your financial standing. High-value rigs often enable higher borrowing amounts, but it’s crucial to borrow within your means, considering your cash flow and budget constraints.

What are the interest rates for drilling rig finance or leasing?

Interest rates fluctuate based on the finance or leasing type, borrowed amount, term length, and lender policies. Typically, extended terms attract lower interest rates but increase the overall cost. It’s advisable to solicit and compare quotes from various lenders to secure the most favourable terms.

Can I finance or lease a drilling rig without a deposit? 

Some lenders may offer finance options without requiring an upfront deposit, which can be beneficial for preserving capital. However, this might affect the interest rates and monthly payments, so it’s important to review the terms carefully.

What happens if the drilling rig becomes obsolete before the end of the finance term? 

Many finance agreements include provisions for technological obsolescence, allowing for renegotiation or upgrade during the term. It’s essential to discuss such scenarios with your lender beforehand to understand your options.

Are there any subsidies or government incentives available for drilling rig finance?

In some regions, government incentives or subsidies may be available for financing drilling rigs, especially if they incorporate environmentally friendly technologies. Research local regulations or consult with a financial advisor to explore potential benefits.

How we can help

In need of drillin rig finance or leasing?

We can help you:

And when we’ve established the best type of finance for you, we will:

Call our team on 0203 900 4322 to discuss your requirements or book an appointment.

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Call us today to discuss your requirements on 0203 900 4322
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