Last quarter, we detailed Hercules Offshore's
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
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
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