The prolonged depressed oil price environment has paralyzed the entire oil and gas industry, since the oil price slump started back in June 2014.
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Hercules completed its first restructuring in early November.
The company had said in February it was reviewing its options “to maximize the value of the company”, three months after emerging from the bankruptcy it had filed in August.
The company has reportedly agreed to transfer the right to buy the Hercules Highlander jack-up rig to a subsidiary of Maersk Drilling for US$196 million.
The company has wrestled with creditors who, according to regulatory documents filed last month, believe the company’s worldwide affiliates violated the terms of its new $450 million loan. To compare, Deloitte puts the combined debt of those 175 bankruptcy-threatened companies at more than $150 billion, almost half of the total for U.S and Canada. The company said low oil prices and the addition of new capacity contributed to its return to bankruptcy. The company also intends to pay employee wages at full, paired with insurance, and benefits throughout the chapter 11 process. If approved, shareholders will receive cash recoveries over time, including a payment of $12.5 million upon completion of the bankruptcy process and the sale of assets. The Company offers a range of services to oil and gas producers to meet their needs during drilling, well service, platform inspection, maintenance, and decommissioning operations in several key shallow water provinces around the world.
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As good as things have been for energy stocks this year, offshore drillers like Ensco (ESV), Noble (NE), and Transocean (RIG) have dropped by at least 20% in 2016-and today’s announcement that Hercules Offshore (HERO) had filed for bankruptcy again serves as a reminder that the sector isn’t out of the woods just yet, even if the major players will likely avoid Hercules’s fate.
