If you are an investor who has been looking heavily at the ultra-deepwater part of the rig market, you may be overlooking that the shallower jack-up market is having a pretty good run as well. Hercules Offshore (NASDAQ: HERO ) estimates that 95% of all jack-up rigs that are marketed to customers are currently in use, and another 123 rigs are projected to hit the market in the next couple of years.
One of the big reasons we are seeing so much activity in the jack-up market is because several large players in the Gulf of Mexico are going back to drill in shallower waters to explore deeper formations using horizontal drilling. Chevron (NYSE: CVX ) and Apache (NYSE: APA ) are two of the leading companies pushing this movement, and their presence could keep Hercules busy in the Gulf of Mexico for several years. Tune into to the video below where fool.com contributor Tyler Crowe discusses two other important takeaways from Hercules' recent earnings release.
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