The VR-500 offers decreased drilling times, fewer safety concerns and faster turnaround times through its modular design with no winches or cables.
Wellington-based Webster Drilling ordered a VR-500 from American Augers in Ohio during 2011.
Since it arrived at Port Taranaki early this year, Webster Drilling added its own custom-made components, taking the total cost of the rig to more than $US12 million.
"This is the beginning of the future for land-based drilling in New Zealand," managing director Bain Webster told EnergyNewsBulletin at Canadian company TAG Oil's Cheal-C3 wellsite in central Taranaki.
The "cyber rig" is smaller, has much more automation and fewer moving parts and can be programmed and monitored remotely from the other side of the world.
"It's so advanced that the inside of the driller's control cabin looks a little like something from Star Wars - Luke Skywalker's cockpit - because of the myriad of instrumentation and other electronic devices scattered around and the sophisticated computerised chair the driller sits in," Webster said.
He said his company took the "bare bones rig" once it landed at the New Plymouth port and modified it, adding "custom built" components from Edmonton, Houston and China, as well as New Zealand.
Webster said the VR-500 was "radically different" from conventional rigs already operating in New Zealand.
It has a much smaller environmental "footprint" and the smaller rig can fit into smaller, tighter drilling sites.
At the Cheal-C wellsite, where the VR-500 spudded the Cheal-C3 well in mid-May, it is sandwiched between an old Cardiff wellhead and TAG's Cheal-C1 wellhead.
The "super single" - which takes 45ft lengths of drill pipe, instead of the usual 30ft - has a hook load of 500,000 pounds (226 tonnes), a top-head drive, hydraulic wrenches for quicker make-up and break-out and a self-erecting driller's control cabin from where the pipework is operated.
Its derrick stands at about 32m - but its drilling floor is about a quarter of the size of conventional rigs.
Many things - from the drilling mast itself to the blow-out preventer - are hydraulically operated, with a less "hands-on" approach, or even a "hands-free" operation.
This reduces safety risk, "keeping your crew out of the danger zones". It also means a smaller rig crew, about three fewer than with other rigs.
"You can also thrust as well as pull back with this rig, both horizontally and vertically and start deviating a well, commencing horizontal directional drilling at much shallower depths," Webster said.
This will be true for Cheal-C3, another well appraising the shallow Miocene-aged discovery in the northwestern part of the Cheal oil and gas field.
Cheal-C3 is also the first of two "shakedown" wells for the VR-500 before it is transported to the East Coast to drill four wells for TAG and Apache Canada.
Webster said transporting the rig across the North Island should be much easier and quicker than with conventional rigs as nearly all the VR-500 loads would be containerised.
After the top third of the derrick has been removed, the rest will be hydraulically lowered onto a standard "trailer base" from a truck and trailer unit, for ease of transporting.
"Rigging up and rigging down with the VR-500 is a lot more simplistic, safer and quicker," Webster said.
He said Cheal-C3 was progressing well, with only some minor hiccups, helped by the fact that US-based personnel from American Augers had been remotely monitoring the rig's performance and even changing operational parameters via the internet.
First published in sister publication ENB yesterday.