Hercules Drilling Rig Sold For $3m

Published at 10:35AM - 12/07/16

Hercules Offshore has announced the sale of the jack-up drilling rig Hercules 267 to an undisclosed buyer for US$3.16 million (£2.41 million).

The struggling offshore drilling contractor made the sale through its subsidiary Hercules International Drilling Ltd.

“The sale is expected to close imminently, subject to the satisfaction of customary closing conditions”, the company said in a statement.

Hercules Drilling Rig Sold For $3m

The US-based company recently filed for bankruptcy in June for the second time, after emerging from Chapter 11 bankruptcy in November 2016.

An earlier agreement with creditors required Hercules Offshore to place all its unsold assets into a wind-down vehicle to ensure the assets’ continued and safe operation until they could be sold.

Hercules 267 will be one of the first to be sold. The jack-up drilling rig was built in Canada in 1979 and was still stacked in Gabon in the first quarter of the year.

The latest bankruptcy filing came as Hercules Offshore could not restructure deals with creditors and could not find outright buyers.

According to the firm, business deteriorated rapidly due to slumping oil and gas prices after it exited bankruptcy, which led it to order a review of its strategic options.

Bankruptcy Petitions Widespread in the US

When the company filed for bankruptcy, it announced it would have to start laying off workers, with a total of 60 jobs expected to be cut in its home city, Houston.

Overall, it is estimated that at least 77 producers in North America have filed bankruptcy petitions since the beginning of 2015, with debt of over £39 million.

The company explained that, although its foreign assets are not part of the bankruptcy, they will be offloaded.

Hercules’ assets include jack-up rigs and lift boats. The company also provides shallow water offshore services such as drilling, platform inspection and decommissioning services.