Published in Oil Industry News on Wednesday, 20 May 2015
Houston-headquartered drilling contractor Hercules Offshore sold four jackups that had been previously cold stacked since 2009. Despite the sale, 11 rigs in the company’s fleet remained cold stacked, five were added to that list this year alone.
According to the company’s fleet status report from 19 May, the four sold include the Hercules 85, Hercules 153, Hercules 203, and Hercules 206. All were ABS-classed and all were built between 1980 and 1982.
The Hercules 85 was an independent leg slot jackup rated for water depths of 85ft and drilling depths of 20,000ft. Its design was a Baker Marine Services Big Foot III. The Hercules 153, Hercules 203 and 206 are all mat cantilever jackups.
The 153 features the Bethlehem JU-150 MC design, while the 203 and 206 were the JU-200 MC design. The 153 was rated for 150ft water depth and 25,000ft drilling depths while the 203 and 206 was rated for water 200ft deep and drilling down to 20,000 ft.
News from the company has been less than positive this year. The company announced during its 1Q 2015 conference call that it reduced its workforce by 40%.
Hercules CEO John Rynd called the decision to cut back Hercules’ workforce “difficult,” saying during a quarterly conference call on 29 April that, “these are the actions we have to take.”
The 1Q 2015 report also showed a net loss of US$57.1 million, or $0.35 per diluted share, on revenue of $122.6 million for the first quarter, compared to net income of $19.9 million, or $0.12 per diluted share, on revenue of $256.7 million for the same period in 2014.
Rynd said further that 2015 will be a difficult year not just for the company but for the industry in general. “Demand for jackup rigs 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,” he said in a statement on 29 April.
He continued: “We expect continued weakness in rig utilization through the remainder of 2015, or at least until we see a meaningful improvement in commodity prices. Additionally, our international liftboat business continues to suffer low utilization, especially in Nigeria, which we expect to continue through this year. In response to these conditions, we have implemented a number of cost saving measures, including cold stacking several rigs, which have made a significant impact on our first quarter results and should show additional benefits in future quarters."
Overall worldwide jackup utilization is down, according to data from Infield Rigs (see charts below). As of 18 May, data states current utilization stands at 76% down from 89% during the same week in 2014. In the Gulf of Mexico, jackup utilization is currently at 69%, down from 84% last May.
The Middle East and Caspian region – where Hercules has three contracts with Saudi Aramco in Saudi Arabia, two which will end this year – stayed consistent at 83% during both periods (May 2015 and May 2014).
The only area to see a spike in utilization was Latin America, which saw a double digit increase, up 11% to 77% utilization this May from last May’s 66% ultilization rate.
Source: www.oedigital.com