Day rate (oil drilling)


DEFINITION of 'Day rate (oil drilling)'

In oil production, a day rate is the amount a drilling contractor gets paid by the oil company for a day of operating a drilling rig. The companies and the contractors usually agree on a flat fee per contract, so the day rate is determined by dividing the total amount by the number of days in the contract.

BREAKING DOWN 'Day rate (oil drilling)'

Day rate fluctuations, which can be wide, are used by investors as an indicator of the health of the drilling market. For example, if day rates fall, investors can take it as a sign to exit their positions.


  1. Crude Oil

    Crude oil is a naturally occurring, unrefined petroleum product ...
  2. P5+1

    The P5+1 is a group of world powers who have been negotiating ...
  3. Control Of Well Insurance

    Insurance that provides coverage to companies operating a well ...
  4. 1979 energy crisis

    The 1979 energy crisis in the U.S. was an event of widespread ...
  5. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  6. Groundwater

    Water that is found underground rather than on the surface.
Related Articles
  1. Stock Analysis

    Why Seadrill's Dividend Reinstatement Is Unlikely

    Learn why Seadrill suspended its dividend payments in the latter part of 2014, and how lower crude oil prices could hurt the company's future prospects.
  2. Stock Analysis

    Has Seadrill Become a Risky Investment?

    Investing in big oil stocks has long been a safe haven for investors, but falling oil prices and a suspended dividend payment have made Seadrill seem risky.
  3. Chart Advisor

    Higher Oil Prices On The Way--But Just How High?

    Tensions in Iraq - teamed with rising seasonal demand - means rising petroleum prices. We'll take a look at what it means for traders.
  4. Investing Basics

    Oil: A Big Investment With Big Tax Breaks

    Oil and gas investments can provide unmatched deduction potential for accredited investors.
  5. Investing

    The Most Expensive Oil Spills

    The only way to estimate the damage of the BP oil spill is to look at what past cleanups have cost.
  6. Options & Futures

    Why Low Oil Prices Are Bad For The Economy

    You may be paying less at the pump, but how are lower oil prices affecting other parts of the economy?
  7. Stock Analysis

    Deepwater Explorations That Had Profitable Results

    Learn how deepwater oil wells sometimes deliver large profits to the companies finding them, if the oil company drillers can overcome high fixed costs.
  8. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  9. Economics

    The Biggest Oil Towns in Texas

    Learn about the boom of oil production in Texas cities and how the new surge of wealth into these cities is changing local economies.
  10. Stock Analysis

    What Exactly Does Warren Buffett Own?

    Learn about large changes to Berkshire Hathaway's portfolio. See why Warren Buffett has invested in a commodity company even though he does not usually do so.
  1. Why do investors look at dayrates when evaluating an oil company's contracts?

    Investors look at day rates when evaluating an oil company's contracts because they have a large impact in determining earnings. ... Read Full Answer >>
  2. Is Qatar a developed country?

    Qatar is a developing country, according to the United Nations. However, as the country with the highest gross domestic product ... Read Full Answer >>
  3. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  4. Why do some oil refineries get tax exemptions?

    Oil refineries normally receive tax exemptions due to tax loopholes. The extracted fuel exemption, for example, one of the ... Read Full Answer >>
  5. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  6. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center