22 Mar 2011production update● Neutral
Several rigs cycled through scheduled five-year regulatory recertification surveys while dayrates held in the $32-38K range; Gulf of Mexico permit delays remained a standing risk factor.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
8 Mar 2011debt financing▼ Bad
To help fund the Seahawk acquisition, Hercules amended its credit agreement, but lenders used the opening to cut its revolving credit line from $175 million to $140 million and raise its borrowing rates -- credit terms tightening even as the deal moved forward.
16 Feb 2011production update▲ Good
Hilcorp extended at a higher $39-41K dayrate and the Chevron-contracted barge rig locked in a long-term rate of $73-75K -- the rate recovery continuing into 2011.
11 Feb 2011capital raising announcement▲ GoodMajor
Hercules agreed to buy all 20 jackup rigs of rival Seahawk Drilling out of Chapter 11 bankruptcy for $100 million ($25 million cash plus 22.3 million Hercules shares valued at just $3.36 each, versus the $33.95 it had paid for its own stock in 2008) -- consolidating the jackup market as a weaker competitor failed, while also flagging a non-cash impairment on its own cold-stacked rigs amid the post-Macondo drilling slowdown.
12 Jan 2011production update▲ Good
Chevron's rate stepped up again (to $35-37K, extended to mid-2011) and rigs began five-year regulatory recertification surveys -- continued gradual normalization.
15 Dec 2010production update▲ Good
Domestic dayrates edged up further and several rigs began scheduling multi-week regulatory surveys well into 2011 -- a sign of renewed confidence in longer-term work.
18 Nov 2010production update● Neutral
The new three-year Angola contract was confirmed, but domestic average contract duration fell further to just 27 days -- the moratorium's chilling effect on new U.S. commitments still visible even as rates held.
21 Oct 2010production update▲ Good
The long-idle international rig Hercules 185 landed a new three-year contract with Chevron's Angola unit at $59-61K starting around January 2011 -- a bright spot offsetting the still-chilled domestic Gulf of Mexico market.
21 Sept 2010production update▼ Bad
Average contract duration fell to just 41 days as customers avoided longer commitments under the moratorium, even as dayrates held around $31-37K.
17 Aug 2010production update▼ Bad
Rigs continued to sit "pending permit" as the drilling moratorium persisted, with dayrates flat and the idle international rig still on reduced standby.
20 July 2010production update▼ Bad
Domestic dayrates held flat around $31-35K as new work increasingly depended on customers getting drilling permits under the post-Macondo moratorium.
23 June 2010production update▼ BadMajor
The fleet report began flagging "regulatory uncertainty in the Gulf of Mexico" for the first time -- the federal drilling moratorium following the Deepwater Horizon spill -- a new headwind layered on top of the still-fragile post-2009 recovery, while an idle international rig sat on a reduced standby rate in Angola.
24 May 2010production update● Neutral
The improved $31-37K dayrate range held, with about a dozen rigs still cold-stacked.
28 Apr 2010production update▲ Good
Chevron's indexed dayrate rose for the first time since the crash (to $31-33K, with a new extension through year-end), and other rigs re-priced up to $31-35K -- a genuine recovery signal.
18 Mar 2010production update● Neutral
The gradual recovery continued, with one rig mobilized in from Mexico to pick up domestic work.
24 Feb 2010production update▲ Good
Dayrates kept firming (into the $29-34K range) and contract durations lengthened again -- a clearer sign the market was recovering off its 2009 lows.
19 Jan 2010production update● Neutral
Dayrates ticked up slightly (into the $29-33K range) and a hurricane-repaired rig returned to service -- an early, tentative sign of the market bottoming.
16 Dec 2009production update● Neutral
Rates and stacking levels held steady at crisis lows as the Hercules 350 finished hurricane-related structural repairs.
17 Nov 2009production update● Neutral
One rig went in for precautionary inspection after Hurricane Ida; otherwise the fleet held steady at low, crisis-era dayrates with about a dozen rigs still cold-stacked.
28 Oct 2009production update● Neutral
Dayrates held around the same depressed $27-31K range with roughly a dozen rigs still cold-stacked, while liftboats kept shifting toward international work.
26 Oct 2009debt financing● NeutralMajor
Hercules completed the $300 million secured notes offering, finishing the string of equity and debt raises it needed to avoid tripping its credit-facility covenants in 2009 -- expensive financing, but the immediate default risk was addressed.
14 Oct 2009debt financing▼ BadMajor
Hercules agreed to sell $300 million of 10.50% senior secured notes due 2017, guaranteed by its subsidiaries, with proceeds earmarked to pay down its term loan.
8 Oct 2009capital raising announcement▼ BadMajor
Hercules closed out its stock offering with a small over-allotment (1.3 million more shares, ~$6.3 million) and priced its new $300 million notes at a steep 10.50% coupon -- expensive, high-yield-market pricing that reflects the market's view of its credit risk.
5 Oct 2009capital raising announcement▼ BadMajor
Hercules announced plans to privately place up to $300 million of senior secured notes due 2017, the next step in shoring up its balance sheet after the covenant-breach warning.
5 Oct 2009production update● Neutral
Chevron extended two rigs through mid-2010 at $27-29K, and Hercules began mobilizing several liftboats to West Africa (at $39-41K) to escape the still-crushed domestic market.
30 Sept 2009material agreement▼ BadMajor
Hercules raised roughly $87 million selling 17.5 million shares of stock at $5.00 each -- a fraction of the $33.95 price it paid to buy back stock in 2008 -- to shore up its balance sheet days after warning it could breach its debt covenants.
22 Sept 2009production update● Neutral
Chevron extended two rigs on long-term contracts running to mid-2010 at low rates ($27-29K) -- a low-rate but longer-duration deal that offered some revenue visibility even as most of the fleet stayed cold-stacked.
20 Aug 2009production update▼ Bad
About a dozen rigs stayed cold-stacked and Gulf of Mexico dayrates remained extremely depressed ($26-40K); some liftboats began transferring internationally to escape the domestic slump.
22 July 2009production update▼ Bad
Dayrates hit new lows (as low as $26K) on the still-working rigs, though new Mexican (Pemex) contracts at $51-63K offered some diversification away from the crushed Gulf of Mexico market.
18 June 2009capital raising announcement▼ BadMajor
With the drilling downturn underway, Hercules persuaded holders of $45.8 million of its 2038 convertible notes to swap them for 7.76 million new shares, shrinking the notes outstanding to about $95.9 million -- trading dilution for debt reduction, the first sign of balance-sheet stress since the notes were sold in 2008.