Hercules Offshore, the troubled offshore drilling contractor, has been delisted from the Nasdaq exchange, after continued financial trouble.
The shallow water jack-up drilling specialist, based in Houston, has been struggling to deal with mounting debt over the last 12 months.
Earlier this month on August 13th, the company finally submitted to bankruptcy, filing for Chapter 11 protection in a US court.
Nasdaq had previously warned Hercules about its situation, siting that the company no longer met Nasdaq’s requirements to be listed on the exchange.
Upon Hercules’ filling for bankruptcy protection, Nasdaq reaffirmed its position, and accepting its fate the offshore driller declined the chance to appeal.
Shares are now traded on the ‘Over-the-Counter’ market, currently at 7 US cents, a complete crash from its US$7 it was trading on Nasdaq only two years ago.
Hercules Offshore currently has debts of around US$1.3 billion, more than double the US546 million valuation of its assets.
In a bid to reduce its liabilities, the driller has also shed over 500 of its 1,800 sting workforce and cold stacked 9 of its 27 rigs.
However things really don’t look good for the road ahead. Hercules has had to drastically slash day rates on the rigs it currently has operational.
In one contact Hercules held with Saudi Aramco, all work was stopped, then cancelled, before being restarted, only after the driller had given in to Aramco’s demands of halving day rates.
Such opportunistic demands by operators only goes to weaken Hercules chances of staying afloat.
With the stronger deepwater drillers selling off new rigs to keep books balanced, in Odfjell Drilling’s case two 4 year old drill ships, and the price of oil still stubbornly low, the future doesn’t bode well for Hercules Offshore.