Last quarter, we detailed Hercules Offshore's (Nasdaq: HERO) mythic struggle in the morose Gulf of Mexico drilling market. The clouds appeared to be parting at that time, and sure enough, the shares have shuffled higher by nearly five bucks. Not every line of business is turning around, but Hercules is hanging in there.

Take, for example, the domestic-liftboats segment. Everything from bad weather to an influx of industry capacity conspired to drive down Hercules' utilization to a horrendous 38%. That harsh winter weather also hacked at the results of fellow shallow-water sevicers Cal Dive (NYSE: DVR) and Hornbeck Offshore Services (NYSE: HOS). No one can control the weather, but people are delivering additional liftboats to an oversaturated market, and that's just plain puzzling.

In response, all Hercules can really do is "cold stack" some of its least capable units, which means that they will not be crewed or actively marketed. The company also has some limited opportunities to relocate these boats to more inviting international basins. Dayrates abroad have now increased for three straight quarters, and utilization is steady.

As for domestic contract drilling, Hercules and Rowan (NYSE: RDC) are in the same boat -- sort of. The latter company has the really top-flight jackups capable of deep-shelf drilling, so it has a bit broader of an opportunity set as Gulf of Mexico drilling activity picks up. Still, Hercules is certainly well positioned for an uptick.

Management noted on its conference call that every $10,000 increase in Gulf dayrates translates to $0.50 of earnings, assuming 85% utilization. As I noted in my look at bottomed-out Nabors Industries (NYSE: NBR), ExxonMobil (NYSE: XOM) has picked up its activity in the Gulf and is not alone. Combine that consideration with ENSCO International's (NYSE: ESV) recent comment that operators are looking less concerned about working through hurricane season, and Hercules may be looking at some fierce earnings come this fall.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.