Hercules Sells Jackups Coldstacked Since 2009

Houston-based Hercules Offshore Inc. reported Tuesday that it sold this month four jackups in the Gulf of Mexico that have been coldstacked since 2009.

The sales should result in cost savings of about $2 million for the remainder of 2015 and annual savings of $3.3 million thereafter, said James West, senior managing director and partner with Evercore ISI, in a May 19 analyst report.

The rigs sold include Hercules 85 (ILC 85’ ILS), Hercules 153 (150’ MC), Hercules 203 (200’ MC), and Hercules 206 (200’ MC), according to Hercules’ May 2015 fleet status report.

“We assume the selling prices were minimal as there is virtually no scrap value for the jackups, but view the move favorably as it eliminates the remaining $2,000 to $2,500 day cost associated with maintaining cold-stacked rigs,” said West.

In April, Hercules Chief Executive Officer and President John T. Rynd said 2015 was shaping up to be a “very challenging year for our industry in general and our company in particular.” Rynd noted in an April 29 press statement that demand for jackups remains weak in every region of the world and the market is still scheduled to deliver a significant number of newbuild rigs over the next several years.

Hercules reported a net loss of $57.1 million on revenues of $122.6 million for the first quarter of 2015, versus net income of $19.9 million on revenue of $256.7 million for the first quarter of 2014, the company reported in April.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com


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