HDD Maxi Rig Market: How Is it Doing?

Maxi rig projects always seem to get the headlines, cool photos and attention. The very nature of the massive project sizes, enormous size of the equipment lends itself to this attention. But we wanted to learn more about what is really going on in the 2024 maxi rig market from the drillers themselves — offering us the insight and perspective only they can provide as they navigate the ups and downs that face on a daily basis.

We reached out to four directional drillers who make a living in the maxi rig market and they shared what they are seeing in this market, day in and day out. Taking part in this contractor Q&A are: 

Andy Bremner, director of business development, Gabe’s Construction Co.
Cory Baker, chief operating officer, HardRock Infrastructure Services
Rahul Mangire, president, Laney Directional Drilling
Josh Ugrich, president, North Country Directional Drilling

1. Describe the type of HDD work you do (type of installation, parts of the country, etc).

Andy Bremner: Gabe’s delivers turn-key trenchless solutions from concept to completion to the energy (both traditional and renewable), municipal, and telecom industries.  Our journey with sub-surface utilities started in 1942, the HDD business was commissioned in 1990.  Our operational presence is indicative of our standing as a union contractor, with a concentrated focus on Iowa, Ilinois, Michigan, Minnesota, Ohio and Wisconsin. The largest scale project was in Colorado and one of our flagship high voltage projects was delivered in Florida, we have the resources to deliver for clients across the country.   

Cory Baker: Hardrock Maxi Rigs perform a wide range of operations, from the simplest maxi shots to the most challenging tasks. We frequently undertake BLM drills in Southeast New Mexico and are often called upon to work across bays and wetlands in the South. We are fortunate to experience very little turnover in our Maxi Rig division, with our Crew Leaders averaging a tenure of nine years. While we operate nationwide, the majority of our projects are based in Texas, New Mexico, and Louisiana. Our diverse expertise spans multiple sectors, including water, sewer, renewables, telecommunications, and oil and gas.

Rahul Mangire: Laney Directional Drilling Company historically focused on the oil and gas markets, however, we recently diversified into the power, water/sewer, and offshore wind markets.  We primarily work in the maxi rig arena for long, large-diameter, or complex HDD installations anywhere in the United States and select international markets.  

Josh Ugrich: NCDD is a horizontal directional drilling contractor that specializes in large diameter installations but also has the ability to provide services in the small pipe market as well. Our ownership team consists of nearly 100 years of experience and have worked in nearly all 50 states, some out of Country work and installing diameters from ribbon/cables up to 56-in. pipeline, with the capabilities of crossings as short as 100’ up to 10,000-plus ft in length. NCDD houses contractor’s licenses for nearly every state that has a requirement for one to be able to perform work in that respective location and since conception in November 2022, NCDD has installed nearly 70,000 ft of pipeline crossings ranging in size from 6 up to 42 in.

2. How would you describe the current state of the HDD Maxi Rig Market — the good, the bad and the ugly?

AB: The good: Owners understanding the synergy between construction and engineering, as result the design build/EPC models are becoming more prevalent. This is truly a win-win. The bad: Large projects are subjected to more regulation driving costs up, as a result the bottom dollar mentality is amplified. Which leads us to the ugly, the cost to own and operate the equipment has increased 20 to 30 percent in the last three to four years.  Increased regulatory/permitting issues delay projects, and project financial plans based on financing rates from eight to 10 years ago grossly below what is needed today.

CB: When looking at the HDD market the innovations in equipment and techniques are making operations safer and more cost-effective. This has led to maxi rigs increasingly being utilized in various sectors, such as telecommunications, renewables, and utilities, broadening market opportunities. Companies with experienced and skilled crews are well-positioned to handle complex projects, ensuring high-quality outcomes and client satisfaction. That was the good side of the HDD industry now for the bad. The maxi rig market is currently facing a downturn, with reduced demand in some regions and sectors. This has led to a slowdown in project initiations and completions. Rising costs of materials, labor, and compliance with stringent regulations are squeezing profit margins. Companies must navigate these financial challenges to remain competitive. Economic uncertainties and fluctuating market conditions have resulted in project delays and cancellations, impacting the overall market stability. Despite these challenges, there is optimism for recovery and growth. HardRock is adapting to the current environment by innovating and diversifying their service offerings. As economic conditions stabilize and infrastructure investments increase, the maxi rig market is expected to rebound, providing new opportunities for growth and development.

RM: It’s clear that the HDD industry is facing significant challenges. Let’s break it down:

Race to the Bottom: The intense competition among HDD contractors has led to a price war, resulting in low profit margins. Despite inflation, the price per inch-foot remains near record lows and continues to trend downward.

Positive Outlook: The Infrastructure Investment and Jobs Act could be a game-changer. Anticipating increased market activity, contractors hope for better prospects. An uptick in bidding activity this year is a promising sign.

Risk and Aggressive Bidding: Trenchless business is inherently risky, and the fierce competition exacerbates this. Contractors often bid aggressively without fully understanding or assessing risks, which can impact project outcomes.

Survival Concerns: Extreme competition threatens the industry’s overall survival. Balancing competitiveness with sustainable practices is crucial.

Navigating these challenges requires strategic thinking and adaptability. Contractors must find ways to differentiate themselves beyond just price, focusing on quality, safety, and innovation. 

JU: In 2022, we started to see there may be large diameter pipe coming back through budgetary quotes, constructability reviews and word of mouth and in 2023 we were able to have some success with the large diameter pipe such as 30 and 36 in. and seen some other contractors doing similar work. Now in 2024, the reality of large diameter pipeline is present and NCDD has had a part in that by installing numerous 36-in. lines and gearing up for 42 in., while also looking into many projects consisting of 42 and 48 in. set to start in 2024 and 2025. Looking into the future, between recent bids, constructability reviews and meetings, the push for large diameter pipe is here to stay, for a little bit anyways where utilizing maxi rigs is a requirement for success. We see this trend frequently, though, we also realize that this is typically always a roller coaster trend. But, between the large diameter pipe scheduled in the Southern portion of the Country and plans in place for Carbon capture, the need for the large maxi rigs is relevant in today’s industry. I must add as well that there seems to be a common misconception with the term “maxi rig” where I hear more times than not that a maxi rig is not capable of much other than large diameter pipe or significantly longer HDDs, where that is not true. We utilize our maxi rigs all over the country for any size pipe, at any length, providing the design accommodates for minimum industry standards required to build a safe and constructable HDD.

3. What are the keys to the maxi rig market’s success today and going forward?

AB: It’s always been about having experienced people in right role.  To be successful today and tomorrow there needs to be a balanced focus internally and externally. Internally for example, company culture, employee development and mentorship programs.   Employee tenure is one of, if not the primary driver for client satisfaction. Externally, client focus is more important than it’s ever been. Our business mirrors the world around us, that means keeping up with constant change.  

CB:  At HardRock, we believe there are six keys to success that apply to any market: hard work, patience, sacrifice, consistency, discipline, and confidence. We strive to embody these principles from the bidding stage through to project completion. In today’s challenging market, it’s not always easy to adhere to all of these values. However, by consistently applying each one, we can ensure that our success tomorrow will be even greater than today. This is the standard we aim for, and it’s what drives us forward.

RM: Operational Efficiencies: Maxi rig operators should prioritize streamlining their operations. This includes optimizing maintenance schedules, crew rotations, and logistics. Efficient operations lead to cost savings and improved productivity.

Risk Management: Rig operators should use contracting tools to manage risks effectively. This involves negotiating favorable terms, assessing project risks, and having contingency plans in place. By reducing risks, companies can maintain stability and profitability.

Safety and Quality: While profitability is essential, it should never come at the expense of safety or service quality. Rig operators must maintain high safety standards and deliver reliable services to build trust with clients and stakeholders.

A balanced approach that considers all these factors will contribute to long-term success in the maxi rig market.

JU: Having experience in the maxi rig market truly is the lead to all success. We have seen it time and time again where some may do well in one market and take a step into this maxi-rig market and may not have the continued success they had in other markets. Our success has been driven by some great mentors (the original owners of Southeast Directional Drilling), having hands on experience in the field, the drive to succeed and the help of some of our relationships we have built from various contractors and clients through the years. Most importantly, our team consists of individuals working for us that come with the same focus as us. The superintendents working at NCDD consist of 10-plus years of maxi rig experience, the drillers could be superintendents, the mud techs can be drillers and so on. We have made a strong focus on promoting from within and bringing on board key people making safety and experience the main focus for our team.

4. From a technology standpoint, what does today’s contractor need to succeed in the future? What technology is critical for you?

AB: Not that long ago it was appropriate to just be open to it.  In the current environment we need to look for it. Once identified, the tech needs to be aggressively evaluated to ensure redundancies are factored in, should issues arise. For Gabe’s, using operational data to optimize fleet performance and enhance client experience could play a major role in how we deliver projects.  

CB: Technology in the HDD market continues to grow, and it’s astounding to see how far it has come. From a contractor’s perspective, technology will keep evolving and advancing on its own. However, for the HDD industry to have a healthy future, contractors must focus on developing procedures and maintaining safe working environments. At HardRock, we place a strong emphasis on Safe Operating Procedures (SOP) to ensure we execute even the most complex crossings in the most efficient and safest manner possible. We believe that prioritizing safety and procedural excellence is key to ensuring a bright and successful future for HDD.

RM: The downhole annular pressure monitoring tool has become the de facto standard on all HDD crossings that Laney works on.  This allows the operations team to understand how the drilling practices are affecting the soils at depth and make adjustments in real-time to reduce the drilling fluid pressures.  Nearly all maxi rigs have adequate pull capacity for long or large diameter HDD installations, however, having a high-torque package installed on drill rigs provides additional capacity for reaming and pullback operations that are not evident in only the maximum pullback capacity.

JU: In the 20 years I have personally been in the market we have seen many changes in this industry and most of it being in the technology space. From different types of gyros used for steering, upgrades in other steering platforms and just by how we handle our day-to-day business, it makes you wonder sometimes on how we were able to do it back in the older days. And I can’t even imagine what it looks like from then to now for some of the HDD people older and more experienced than myself. With NCDD we embrace the change and actually look forward to adapting with the technology, it has been proven day after day that after the learning curve, it helps make our lives a little bit easier and safer in the field. We are going to continue to embrace the technology changes as well as be innovators to the industry pushing forward our plans and creations to allow for this market to flourish.  

5. What are the contractor concerns you are hearing about the maxi rig market (as well as your concerns) and why?

AB: First, how will the energy evolution impact the amount of work, specifically the O&G sector. Why this is a concern is very obvious. Secondly, how do we backfill the retiring generations, that question brings up a more important question: How do we attract younger generations that are tech focused and have been alienated from the trades?  Thirdly, how do I stay agile so I can capture emerging opportunities in renewables or grid hardening?   

CB: Pricing is a significant topic in the HDD industry. Over the past four years, the cost of our consumables has increased by over 25 percent, yet our prices have remained unchanged. This is a major concern for the industry as a whole. The pressure to keep bids low may lead some to take shortcuts, potentially compromising safety, procedures, and environmental standards. This is a direction we do not want our industry to take. As an industry, we must address our pricing strategies and work on improving our procedures to become more efficient while maintaining safety. By doing so, we can manage costs without compromising the integrity of our operations.

RM: Race to the Bottom: The intense pricing competition results in low margins and high risk. Contractors feel pressured to submit bids at rock-bottom prices, impacting profitability. The risk lies in compromising safety, quality, or project execution because of cost-cutting measures.

Design Challenges: Poorly designed HDD installations pose significant issues. If an HDD is poorly designed, infeasible, or does not adequately assess the subsurface conditions, it can lead to project delays, budget overruns, and operational difficulties. Contractors worry about executing projects that don’t align with good HDD design, practical feasibility, or cost-effectiveness.

Remember, finding a balance between competitive pricing and sustainable practices is crucial for the industry’s long-term health. 

JU: We tend to keep our nose pointed forward, worry about our work and our operations. However, it is a small industry and everyone has most likely crossed paths a time or two so you hear things from time to time about what may be going on or some of the concerns happening within our little industry. We hear the concerns of inadvertent returns, being unorganized, reckless in some ways, but personally we stay away from anything not directly related to us. Our focus is constructing a safe and productive pipeline, basing our core values on safety, our experience, commitment and integrity. The main key is we continue as contractors to do the best we can, pushing forward doing the right thing and not being afraid to ask for help.

6. Describe your enthusiasm level for the future of the HDD/Maxi rig market and why?

AB: We are excited about trenchless overall, maxi HDD is part of that. Maxi HDD will always be a major player in terms of trenchless methods. To optimize value, we must challenge the status quo and be open to change. The people that make up this industry have proven they know how do that. Just look at how far maxi HDD has come since the operator used to ride on the carriage!

CB: With the recent infrastructure bills being passed, the rise in natural gas prices, and steady oil prices, I believe we will see a surge in projects being released and started in 2025. If we, as an industry, maintain our procedures and safety standards, we will find that more sectors will prefer using HDD due to its environmentally friendly advantages. At HardRock, we are committed to being the best stewards we can be for our industry, and we hope all HDD contractors share this commitment. Together, we are stronger and better.

RM: The future of the HDD/Maxi rig market and the reasons behind different perspectives:

Low Enthusiasm: Some industry experts have a pessimistic view because of the “race to the bottom” condition of the market.  When rig owners prioritize cost-cutting by offering the lowest prices, it often leads to compromises in safety, quality, and service.

Cutting corners can negatively impact long-term profitability and reputation. Therefore, those who emphasize this viewpoint express caution and concern.

Optimistic Outlook: Others are more optimistic. They believe that education plays a crucial role. As engineers and owners become more knowledgeable, they can optimize HDD (Horizontal Directional Drilling) designs.

By reducing risks for owners and enhancing contractor profitability, well-designed HDD projects can create a win-win situation.

This perspective focuses on collaboration, innovation, and sustainable growth.

In summary, the future of the HDD/Maxi rig market depends on striking a balance between cost efficiency, safety, and quality. Education and informed decision-making will be key drivers of success. 

JU: I’ve been working in this industry for almost 20 years and quite honestly it has become the only thing I want to do or be a part of. The industry went through a little lull for a while a few years ago and lately it seems to be building back up to where it can be, potentially even bigger. We have grown quickly in the 1.5 years NCDD has been in business but with the team built around us and experience in the maxi rig market, we are confident and excited to see where this leads us. Anyone in the field that has the experience with the small rig and maxi rig market can probably agree that pulling 4,000 ft of 42-in. feels just a little bit better than 400 ft of 6-in. Comes with risk, stress and a few more potential hazards but it all seems more rewarding and worth it when you see the final product.

7. Describe the maxi rig market in 5 words:

AB: Evolving. Essential. Innovative. Resilient. Sustainable. 

CB: Ever growing environmentally friendly market.

RM: High risk with low reward

JU: Demanding. Competitive. Innovated. Challenging. Rewarding.

Sharon M. Bueno is editor of Trenchless Technology.