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Rig company Hercules Offshore takes big 2Q hit

Company keeps chin up despite poor financial results.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   July 23, 2014 at 9:58 AM
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HOUSTON, July 23 (UPI) -- Rig company Hercules Offshore said Wednesday its second quarter results were hurt by declining activity in the U.S. waters of the Gulf of Mexico.

Hercules reported income from continuing operations of $6.6 million for the second quarter of 2014, compared to $16.6 million for second quarter 2014.

President and Chief Executive Officer John Rynd said second quarter results reflected lower drilling activity and the transfer of properties in the U.S. Gulf of Mexico.

"Our latest discussions with various domestic customers suggest activity levels will rebound late this year," he said.

Rynd added his company was taking proactive measures to cut down on costs. The lease rate for its fleet of rigs remains solid for its assets deployed in the Gulf of Mexico, he said, and relatively stable crude oil prices are supporting the company's bottom line.

"While our third quarter results will likely be impacted by the current operational challenges, conditions are expected to improve toward year end," he said.

Hercules in May secured a $420 million contract with the North Sea subsidiary of Maersk Oil to develop the region's Culzean oil field

Last year, the company spent more than $3 million in salvage costs on Rig 265, damaged in a natural gas explosion in the Gulf of Mexico.

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