Hercules Offshore Announces Agreement to Divest the Majority of Inland Fleet
HOUSTON, May 20, 2013
HOUSTON, May 20, 2013 /PRNewswire/ --Hercules Offshore, Inc. (Nasdaq: HERO)
announced that it has entered into an agreement for the sale of eleven inland
barge rigs, which includes three active rigs, eight cold stacked rigs, and
related assets ("Inland Asset Package") for cash proceeds of approximately $45
million. Excluded from the Inland Asset Package are the Hercules 27, for which
the Company has a separate agreement to sell the rig to a third party for $5
million, the Hercules 52, and the Hercules 9. The Company will also retain
existing working capital within the Inland segment. Closing will be staggered
based on the expiration dates of existing contracts on the three active rigs
and is subject to the completion of certain customary closing conditions. The
initial closing will include ten of the rigs and is expected in late second
quarter 2013, at which time the Company will receive $35 million, and closing
on the final rig is expected in early third quarter 2013, at which time the
Company will receive the remaining balance of $10 million. The Company expects
to record a non-cash impairment charge of approximately $40 million as a
result of the sale in the second quarter 2013.
John T. Rynd, Chief Executive Officer and President of Hercules Offshore
stated, "The sale of our Inland rigs is consistent with our on-going efforts
to rationalize non-core assets. Market challenges in this segment have been
significant over the past several years, making it difficult to generate a
positive return from these assets. We do not expect these challenges to
materially abate. The sale will generate cash proceeds that can be reinvested
in higher returning assets that are strategic to our growth objectives."
Headquartered in Houston, Hercules Offshore, Inc. operates a fleet of 38
jackup rigs, 13 barge rigs and 64 liftboats. The Company offers a range of
services to oil and gas producers to meet their needs during drilling, well
service, platform inspection, maintenance, and decommissioning operations in
several key shallow water provinces around the world. Hercules Offshore
currently holds 32.1% of share capital in Discovery Offshore S.A., a pure
play, ultra-high specification jackup rig company. For more information,
please visit our website at http://www.herculesoffshore.com.
The news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements are subject to a number of risks,
uncertainties and assumptions, including the factors described in Hercules
Offshore's most recent periodic reports and other documents filed with the
Securities and Exchange Commission, which are available free of charge at the
SEC's website at http://www.sec.gov or the Company's website at
http://www.herculesoffshore.com. Hercules Offshore cautions you that
forward-looking statements are not guarantees of future performance and that
actual results or developments may differ materially from those projected or
implied in these statements.
SOURCE Hercules Offshore, Inc.
Contact: Son P. Vann, CFA, Vice President Investor Relations and Planning,
Hercules Offshore, Inc., +1-713-350-8508
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