Contract drilling services provider
Hercules Offshore Inc.
), announced the pricing of senior notes of $400.0 million due to
mature in 2021. The company also declared that the notes will
carry a yearly interest of 8.750%.
The notes will be sold at par and through private placement
amongst selected investors. Hercules Offshore intends to utilize
the net proceeds from this offering and its cash on hand to
finance other deals.
These transactions would include acquiring shares of Discovery
Offshore SA and also paying the $333.9 million final payment of
Discovery Triumph and Discovery Resilience. The cash on hand
portion will also include $104.0 million, which is expected to be
received from the sale of inland barge rigs and associated
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On Apr 25, 2013, Hercules Offshore reported first-quarter 2013
adjusted loss per share of 2 cents, which was narrower than the
Zacks Consensus Estimate of a loss per share of 3 cents. The
better-than-expected result was primarily due to improved results
from most of its business units.
Headquartered in Houston, Hercules Offshore operates a fleet of
38 jackup rigs, 13 barge rigs and 63 liftboats. It provides
services such as platform inspection, well service, maintenance
and decommissioning work to various oil and gas producers.
Hercules Offshore currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
However, there are certain other firms in the energy sector that
are expected to perform better over the short term. These include
Cheniere Energy Partners LP
Oiltanking Partners LP
). All these firms sport a Zacks Rank #1 (Strong Buy).