Why Buying Beats Renting: What Most ESP Suppliers Don't Want You to Know
Unconventional well economics can be tough. We get it. It takes a lot of capital preparing surface infrastructure and drilling, and completing a pad of wells, before a dime of revenue is realized from production.
You may think that renting an ESP is the place to save. It’s not.
It’s like buying a brand-new work truck and getting used tires. You may save a buck on the front end, but you’ll potentially wind up paying more (a lot more) soon enough.
Thinking about renting? Before you do, here is what most ESP suppliers don’t want you to know.
Your ESP Provider Wants Your ESP To Fail
Hate to break it to you or put it so bluntly, but the simple fact is your ESP provider wants your ESP to fail. It’s simple economics.
ESP providers can only make money and get a return on their investment on a rental when the ESP fails. How? Because they can invoice for equipment replacement and repair, under the fancy term “back-end charges.” So yes, the ESP provider wants the ESP to fail, and fail quickly. It’s how they generate a return. This system is good for them, but not so good for you. Especially if you’re facing work over expenses, deferred production losses, and an unknown bill for repairs and replacements.
Put simply, if you’re renting an ESP, you’ve got a misalignment problem because your goals do not align with your suppliers’ profitability. How do you create alignment? Performance.
By focusing on ESP run time performance, you’ll minimize work over expenses and deferred production losses. The best way to ensure performance? Purchasing new equipment from a proven and trusted provider. New equipment performs better for longer than used equipment from the rental fleet, increasing production while lowering total operational expense.