Weakening GoM market forces Hercules to stack rigs

Offshore staff

HOUSTON -- The deteriorating shallow water market in the Gulf of Mexico is forcing the rig contactor with the most exposure to stack rigs. Hercules Offshore has stacked seven rigs and seven inland barges.

Leading edge day rates for commodity jackups in the GoM have fallen about 20% below peak, according to Raymond James, and the decline is expected to continue. The significant number of newbuild rigs scheduled to hit the water may exacerbate the decline, the analyst says.

More than 70 newbuild jackups are set to hit the water by the end of 2010, 70% of which are uncontracted. This would represent a 20% increase in jackup capacity.

12/23/2008