Hercules Offshore Inc: Showing Muscle in the Gulf
The Gulf of Mexico has been a taboo topic when it comes to offshore drilling. After the BP disaster, the Gulf has had a pretty negative connotation attached to it, and often companies and investors are steering clear of it. However, one company is braving the heat and continuing shallow water drilling in the Gulf. That company is Hercules Offshore Inc. Let’s get the whole story from Daniel Gilbert.
" …But where some of its rivals see depleted oil and gas reserves, Hercules says it sees opportunity. Drilling in the area has been declining for the past decade, but Hercules is banking on its greater scale to reduce costs and stimulate more customer demand from its clients, such as Chevron Corp.
Even before the Seahawk rig purchase, Hercules said it had reduced operating costs by more than 40% between the third quarter of 2008 and the end of 2010, and trimmed its debt by nearly $300 million over the same period.
“We believe in the Gulf of Mexico long term,” Jim Noe, a senior vice president and the company’s general counsel, said in a recent interview.
Not everyone is bullish about the shallow-water Gulf’s prospects. Loretta Cross, managing partner at Grant Thornton LLP’s corporate advisory and restructuring unit, said she believes drilling activity in the shallow-water Gulf has further to fall."
Read the entire article here: http://online.wsj.com/article/SB10001424052702303654804576349952639619430.html