Hornbeck Offshore Updates on GOM Ops

Hornbeck Offshore issued the following update regarding the current status of its Upstream operations in the Gulf of Mexico ("GOM") in light of the recently announced 180-day moratorium on drilling in water depths in excess of 500 feet in the GOM (the "Drilling Moratorium").

As of June 3, the Company has an Upstream fleet complement of 55 new generation vessels comprised of 28 vessels working in the GOM, 20 vessels working in international waters or in support of non-oilfield customers, six previously announced stacked vessels and one newbuild vessel still under construction with an expected delivery in September 2010. Of the 28 vessels currently operating in the GOM, five are supporting production or non-drilling activities (including two 430 class MPSVs), two are supporting drilling operations on the Continental Shelf (in water depths less than 500 feet) and 21 vessels (including two 370 class MPSVs) are supporting drilling operations in the deepwater GOM, which the Company defines as water depths in excess of 1,000 feet.

Of the 21 Upstream vessels currently supporting drilling operations in the deepwater GOM, five are involved in the oil spill relief efforts (including two 370 class MPSVs) and are currently expected to remain in that service for the foreseeable future. Of the remaining 16 vessels, seven are operating in the GOM spot market and nine are currently operating under customer charters unrelated to the oil spill with varying maturities ranging from 79 days to 1,017 days, with an average remaining contract duration of 258 days. The Company has reviewed its time charters for these nine vessels and does not believe that any of them can be validly canceled for force majeure as a result of the recently announced Drilling Moratorium. To the extent that any customer should assert force majeure for either the oil spill or the moratorium, the Company intends to defend the enforcement of its contracts against such claims.

Overall, the Company estimates that roughly 35% of its total revenue comes from Upstream vessels, including OSVs and MPSVs, operating in support of deepwater drilling in the GOM. The Company's OSV contract backlog now stands at 53% and 38% of its available new generation OSV vessel-days contracted for the second half of 2010 and fiscal 2011, respectively, with 21 vessels contracted beyond the end of 2010. More importantly, given the 180-day Drilling Moratorium in the GOM, the composition of the Company's second-half 2010 and fiscal 2011 OSV contract coverage is heavily weighted (67% and 85%, respectively) to vessels working in international waters or in support of non-oilfield customers. By contrast, less than 25% and 6% of the second-half 2010 and fiscal 2011 OSV contract coverage, respectively, is related to vessels currently supporting drilling operations in the deepwater GOM.

During the Drilling Moratorium, the Company will continue to seek to engage in all permissible oilfield activities that are not affected by the Drilling Moratorium in the GOM. Such activities include oil spill response efforts, drilling support in waters of 500 feet or less, workover operations, completion operations, abandonment operations, intervention operations, and certain production-related activities and other specialty non-drilling applications. For example, the 430 class MPSV HOS Achiever returned to the GOM on June 1, 2010, after the successful installation of a 100-ton crane in Norway, and has already been awarded a spot job by a large independent integrated oil company installing subsea infrastructure in the GOM. Meanwhile, the Company will also proactively seek to mitigate its exposure to the increasing near-term uncertainty in the GOM market conditions by bidding additional vessels into foreign markets and domestic non-oilfield markets. Based on currently available customer opportunities, the Company is reasonably optimistic about its ability to further diversify its revenue base.

The Company believes that its current working capital, available capacity under its existing revolving credit facility, which is currently undrawn and is expected to remain undrawn, and projected cash flows from operations for the remainder of 2010 will be sufficient to meet its anticipated operating needs, its debt service and the total remaining cash requirements under its capital programs.

The Company is in compliance with all applicable financial covenants of its debt obligations. Its three principal long-term debt obligations do not mature until March 2013, December 2014 and October 2026, respectively, the latter of which may, under certain conditions, be subject to early maturity in October 2013. Based on a current assessment of the potential impact of the Drilling Moratorium, the Company believes that it will remain in compliance with all of its financial covenants.


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