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How Long Can Hercules Rise?

When natural gas prices plummeted, many of the shallow water offshore drilling rigs in the Gulf of Mexico moved to oil heavy plays internationally to recoup profits. There are currently 35 rigs in the region, with 18 of them belonging to Hercules Offshore (UNKNOWN: HERO.DL  ) . With E&P companies finding liquids content in the shallow water of the gulf coast, market fundamentals are at all-time highs. In this video, Motley Fool energy analyst Joel South tells investors how long this incredible skyward trend for Hercules can continue, and what risks might hamper the firm going forward. 

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Read/Post Comments (2) | Recommend This Article (2)

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  • Report this Comment On February 15, 2013, at 2:22 AM, justice215 wrote:

    Herculese wll really start to rise as the U.S really starts to use nat gas.The deep well drillers will always be profitable. But your shallow well drillers like Herculese will fare far better in the long run for there cost will always be significantly lower as well as the risk of spills that can and cannot be contained. Herculese on the way to $10 a share and if management keeps doing a good job $20 is on the way.

  • Report this Comment On February 15, 2013, at 10:42 AM, TMFTheWhisperer wrote:

    I agree with your natural gas assumption but worried about the LLS/ WTI spread. If LLS and WTI converge, the economics make more sense for E&P's to move onshore hurting HERO's pricing power.

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