Each one in plain English, with the numbers worked through for a shareholder.
3 Oct 2011bankruptcy or receivership▼ BadMajor
On September 28, 2011 the Bankruptcy Court confirmed Seahawk's Chapter 11 plan (filed in May, amended July 6). On the Effective Date, expected around October 4, 2011, all existing common stock is cancelled; former holders keep only a right to distributions of the leftover Hercules shares and cash, paid only after all allowed claims are paid or reserved in full, and not before the Pride dispute/credit-support conditions are met. The filing does not state what, if anything, that leftover will be. Directors Myers, Nesser and Segner and officer Easter are removed on the Effective Date, and a Liquidating Trust takes 100 new shares and becomes sole stockholder. This resolves the open questions on the plan and on equity treatment.
On April 27, 2011 Seahawk completed the sale of substantially all its drilling assets to Hercules Offshore (approved by the Bankruptcy Court on April 5), receiving 22,321,425 Hercules shares and $25,000,012 in cash, worth about $154.5 million at Hercules' $5.80 closing price the day before. Substantially all the cash goes to repay the D.E. Shaw DIP loan and expenses, and the Hercules shares are held in escrow pending a reorganization plan and distribution to claim holders. A new wind-down DIP loan of up to $14.25 million from Hayman Capital Master Fund (13% interest, maturing by Jan 31, 2012) funds the wind-down. This completes the sale agreed on February 11; the filing does not state what existing shareholders receive.
Fleet report as of April 14, 2011: seven rigs marketed and thirteen cold stacked. Seahawk 3000 has Arena work at $60,000 to Jul 6 and then $70,000 for 70 days to Sep 15, 2011. Seahawk 2004 shows Walter Oil & Gas jobs and a Petroquest contract at $37,500 (96 days to Oct 7, permit pending), and 2007 adds Breton at $37,500. This is a routine update ahead of the Hercules sale closing.
Fleet report as of March 10, 2011, during the bankruptcy: seven rigs are marketed and thirteen cold stacked, with 2505 and 2504 now listed as cold stacked. Seahawk 3000 is under an Arena contract (120 days, $60,000, to Jul 7), 2601 is with Chevron at $55,425 for 157 days to Aug 13, and 2001 has new Great GulfCan work at $37,500 for 90 days. Seahawk 2007 also has Great GulfCan work at $35,000 before returning to Castex at $36,000.
On February 15, 2011 NASDAQ told Seahawk its common stock will be delisted because of the Chapter 11 filing and because, after the Hercules asset sale, the company may no longer have an operating business. Unless the company appeals, trading is suspended at the open on February 24, 2011 and a Form 25-NSE will be filed. This follows the bankruptcy filing and asset sale agreement of February 11.
On February 11, 2011 Seahawk and seven subsidiaries filed for Chapter 11 bankruptcy in the Southern District of Texas (Corpus Christi) and signed a deal to sell substantially all assets to Hercules Offshore for 22,321,425 Hercules shares plus $25,000,012 in cash, valued at about $100 million at $3.36 per share on Jan 27, 2011; the sale needs Bankruptcy Court approval. It also took a DIP credit facility of up to $35 million from D.E. Shaw Direct Capital Portfolios (12% plus the higher of one-month LIBOR or 3%), partly to repay the Natixis facility, whose balance was about $17.9 million and which was accelerated by the filing. Pride International also sent a default notice under the Tax Support Agreement and demanded cash collateral. Separately, the company will terminate certain employees and officers including General Counsel Alejandro Cestero and Chief Accounting Officer William G. Evans (the filing text is truncated after that). The filing does not say what shareholders will receive.
Fleet report as of January 18, 2011: the report says the condition for the Essar sale of Seahawk 2505 was not met, and the rig is now being marketed for sale to other parties. This ends the $14.55 million Essar deal described in the October 2010 agreement. Seahawk 3000's Energy XXI job ends Jan 20, followed by Badger to Mar 1 and Arena (120 days, $60,000) to Jun 29, 2011. Seahawk 2600 adds an LLOG job at $46,000 (permit pending), and 2004 has Walter Oil & Gas work at $35,000 and a further 60 days with the rate to be agreed.
Fleet report as of December 8, 2010 lists nine marketed rigs and eleven cold stacked. Seahawk 3000 is finalizing repairs, with the Energy XXI contract expected to start in late December, followed by Badger (40 days, $55,000) and Arena (120 days, $60,000, permits pending). Seahawk 2602 started the Arena job on Dec 2, 2600 started Tarpon on Nov 21, 2007 started Castex on Dec 8, and 2001 is now contracted to ENI at $32,000 for 30 days with its permit pending. The 2505 sale to Essar for $14.55 million is still shown as contingent on a third-party contract award.
Fleet report as of November 8, 2010: Seahawk 2601 moved from Hilcorp to Chevron at $45,550 a day (current job started October 15, with three more Chevron contracts being finalized), and 2602 is substituted for 2500 on the Arena contract at $40,000. Seahawk 2001 is available after its Petroquest job ended, 2004 is working for Walter Oil & Gas at $32,000, and 2505 is still available with its $14.55 million sale pending a third-party contract award; Seahawk 3000's Energy XXI work is now deferred to December 2010.
On September 29, 2010 a Seahawk subsidiary agreed to sell the available rig Seahawk 2505 to Essar Oilfield Services India Ltd. for $14,550,000, against a net book value of about $42.5 million at August 31, 2010. Closing depends on Essar winning a contract by February 8, 2011 under a tender it submitted to a third party; if it closes, Seahawk is also to be paid $135,000 plus costs and 15% for assistance and training. The sale price is well below the rig's book value (a factual comparison from the filing).
Fleet report as of September 24, 2010: eight rigs are listed as marketed, six contracted (2602 Energy XXI, 2601 Hilcorp, 2600 Tarpon, 2007 Breton, 2004 Bandon, 2001 Medco then Petroquest at $32,000), all permitted, with 2504 and 2505 available. Seahawk 3000 and 2500 stay cold stacked with their contracts deferred.
On September 1, 2010 the company borrowed about $11.5 million under its August 2009 revolving credit agreement (Natixis, New York Branch as agent), at an expected 6.75% interest, and will add about $2.3 million of cash to pay for work on Seahawk 3000. The company expects that work to finish in the second or third week of November 2010, after which the rig is to start its roughly 197 days of contracted backlog, pending permits; this follows the earlier Seahawk 3000 jacking damage.
Fleet report as of August 20, 2010: Seahawk 2601 began earning its full $41,000 dayrate with Hilcorp on August 19, 2600 has a new Tarpon contract at $40,000 for 70 days, and 2001 has a Medco Energi contract at $30,000 with permit pending. Seahawk 2007 is doing wireline work for Mariner at a reduced $6,500 a day after its $32,000 contract ended August 18; 2504 and 2505 remain available.
Fleet report as of August 3, 2010: Seahawk 3000 moves to cold stacked/shipyard with its Energy XXI, Badger and a new Arena ($60,000 a day, 5-well) contract all deferred, and 2500's Arena contract is deferred to November. Seahawk 2600, 2001, 2504 and 2505 are now available, and 2601 is earning a $25,000 standby rate while awaiting a permit, so only a few rigs are working, which continues the permit slowdown.
Fleet report as of July 2, 2010: Seahawk 3000 now shows as contracted with Energy XXI and Badger at $55,000 a day (replacing the repair status), and 2004 is working for Bandon Oil & Gas again with a permit. Seahawk 2500's Arena Offshore contract (70 days at $35,000) is pushed to January 10, 2011 because Arena's drilling program is deferred until November; 2504 and 2505 are available.
Fleet report as of June 9, 2010: Seahawk 3000 repairs are still due to finish July 1, and Seahawk 2504 is now available after finishing its Mariner contract on June 6. Seahawk 2004 is standing by at a zero dayrate with its Bandon Oil & Gas contract awaiting a permit, and several follow-on contracts (2601, 2500, 2007) show permits pending under new MMS guidelines, which continues the permit-moratorium thread.
The company says the US Department of the Interior announced on May 6, 2010 that no new offshore drilling permits will be issued until a safety review is done, expected around May 28, 2010. Seahawk's whole fleet works in the US Gulf of Mexico, so it warns that a longer moratorium would hurt results and that its rigs would idle as current contracts finish; all but one backlog contract starting during the moratorium (the Seahawk 2004's next job) is permitted, and the company does not expect any rig to win new Gulf contracts until it is lifted.
Updated fleet report with a setback: Seahawk 3000's jacking system was damaged when jacking up on Hilcorp's location, and it is undergoing repairs (about 68 days, estimated to 7/1/2010). Seahawk 2601 has been substituted to fulfil Hilcorp's program at $41,000 a day for 100 days. Seahawk 2500 is under tow to a new contract with ADTI/Contango at $33,000, and Seahawk 2505 is available.
Updated fleet report. Eight rigs are contracted in the US Gulf, with several follow-on contracts at higher dayrates, such as Seahawk 2600 with Peregrine at $42,500, Seahawk 2602 with Arena Offshore at $40,000 and Seahawk 2007 with Mariner at $35,000. Seahawk 3000 is in the shipyard until about 4/15/2010 before its Hilcorp contract at $55,000 a day. Two rigs remain available and ten are cold stacked.
Updated fleet report. The company states that as of 9 February it had no further rigs in Mexico, so the Pemex work noted in earlier reports is over. Eight rigs are listed as contracted in the US Gulf (including Seahawk 3000 for Hilcorp at $55,000 a day and Seahawk 2001 being reactivated for Energy XXI at $35,000), two are available and ten are cold stacked.
Updated fleet report. New contracts: Seahawk 2600 with Apache at $35,000 a day, Seahawk 2500 with Energy XXI at $35,000 after reactivation, Seahawk 2004 with Arena Offshore at $33,000 after a 5-year survey and drydock, and Seahawk 3000 will leave Mexico for a Hilcorp letter of commitment at $55,000 a day for 100 days (expected start about 3/1/2010). Seahawk 2501 is now cold stacked.
Updated fleet report. Seahawk 2504 (Mariner, $32,000 a day, about 80 days) is newly contracted, and some dayrates rise slightly, with Seahawk 2601 at $36,200 for Castex and Walter Oil & Gas. Seahawk 2505 in Mexico is preparing to return to the US Gulf, leaving Seahawk 3000 as the only rig listed in Mexico, on a Pemex extension to 2/6/2010. Seahawk 2004 is in the shipyard for repair ahead of tender opportunities.
Updated fleet report, also showing a new Houston office address (5 Greenway Plaza). Seahawk 2501 in Mexico is now listed as available and preparing to return to the US Gulf, while Seahawk 3000 gets a 37-day Pemex extension at $56,000 a day (down from $62,500) to 2/6/2010. Seahawk 2600 moves to Walter at $33,200 a day, Seahawk 2602 to EPL at $32,000, and Seahawk 2007 continues with Arena Offshore at $32,000.
Updated fleet report. Contracts for the US Gulf rigs are being re-signed at lower dayrates of $32,000-$35,000, compared with $37,500-$40,000 in the earlier reports (Seahawk 2601 with Newfield, Castex and Walter Oil & Gas at $35,000; Seahawk 2602 and 2007 follow-on work with Arena Offshore). The Pemex rigs in Mexico continue unchanged (Seahawk 3000 at $62,500 to 12/31/2009, Seahawk 2501 at $83,000 to 12/2/2009).
Updated fleet report. Seahawk 2007 is now contracted to Mariner Energy at $32,000 a day, Seahawk 2602 has a new Arena Offshore contract at $35,000 a day (90 days plus a 60-day option, starting no sooner than 12/1/2009), and Seahawk 2602's ANKOR work is extended with a further well. Seahawk 3000's Pemex extension runs to 12/31/2009 at $62,500, and Seahawk 2501's Pemex extension runs to 12/2/2009 at $83,000, down from $90,500.
Seahawk posted its regular fleet status report. In the US Gulf of Mexico, three 250' rigs (Seahawk 2600, 2601, 2602) are on contract at $37,500-$40,000 a day. In Mexico, Seahawk 3000 and Seahawk 2501 are on Pemex contracts with letters of intent for extensions (Seahawk 3000 at $62,500 a day through 12/31/2009). Seahawk 2505 is available and negotiating follow-on work, four other rigs are listed as available in the US and ten are cold stacked.
