Hercules Offshore to cut more than 300 offshore workers

Hercules Offshore to cut more than 300 offshore workers

ROGER JORDAN, Associate Editor

HOUSTON – Hercules Offshore, a Houston-based drilling contractor, is to lay off 324 employees as it shuts down four rigs in the Gulf of Mexico.

The job losses are expected to begin around Dec. 31, according to a letter the company sent to the Texas Workforce Commission, the agency charged with overseeing and providing workforce development services in Texas.

“Unfortunately, our business is cyclical, and this is a downturn, and we’re reacting like we always do in a downturn,” Jim Noe, senior V.P. and general counsel for Hercules, told Fuelfix during an interview on Nov. 3.

“We stack rigs when times are lean, but eventually we fully expect demand will pick up in the Gulf of Mexico,” Noe said. “I think this onslaught of domestic production has dislocated the worldwide oil markets, and as a result we didn’t have work for four of the rigs.”

All of the employees affected by the cuts have been notified.

Hercules Offshore's stock was at $1.4650 at 15.28 EST on Nov. 4.

On Oct. 23, Hercules reported a loss of $88.6 million in the third quarter of this year. During the same period last year, the company reported an income of $17.2 million.

Speaking in October, John T. Rynd, Hercules' CEO and President, said, "Third quarter results reflect the slowdown in U.S. Gulf of Mexico drilling activity, idle time across various international rigs, and weak operating conditions in West Africa for our international liftboat fleet.  In the U.S. Gulf of Mexico, while we have recently seen some activity improvement with a portion of our customer base, this has been offset by further pullback from some of the larger customers in the region."