{"id":11181,"date":"2015-08-18T07:47:47","date_gmt":"2015-08-18T12:47:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11181"},"modified":"2015-08-18T07:47:47","modified_gmt":"2015-08-18T12:47:47","slug":"junk-rated-offshore-drillers-headed-into-bankruptcy-fitch","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11181","title":{"rendered":"Junk-Rated Offshore Drillers Headed into Bankruptcy: Fitch"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/08\/17\/junk-rated-offshore-drillers-after-hercules-headed-into-bankruptcy-fitch\/\" target=\"_blank\">Junk-Rated Offshore Drillers Headed into Bankruptcy: Fitch<\/a><\/h3>\n<p><strong>After fracking, offshore drilling.<\/strong><\/p>\n<p>At the leading edge is rig-contractor Hercules Offshore. In March 2014, before the oil price collapsed, it had the temerity to sell for 100 cents on the dollar $300 million in junk bonds. Since then, its shares have collapsed to near zero. Its bonds have collapsed too. And on Thursday last week, it and a whole gaggle of related companies filed for Chapter 11 bankruptcy.<\/p>\n<p>It won\u2019t be the only junk-rated offshore driller with that fate, according to\u00a0<a href=\"https:\/\/www.fitchratings.com\/site\/fitch-home\/pressrelease?id=989487\" target=\"_blank\"><u>Fitch Ratings.<\/u><\/a>Investors are going to get their pockets cleaned.<\/p>\n<p>\u201cThis is the lowest level of demand we have seen since the early days of the offshore industry,\u201d Hercules CEO John Rynd had told investors in a quarterly\u00a0<a href=\"http:\/\/fuelfix.com\/blog\/2015\/04\/29\/hercules-offshore-has-cut-40-percent-of-workforce-amid-low-oil\/\" target=\"_blank\"><u>conference call<\/u><\/a>\u00a0on April 29. Hercules had already cut its global workforce \u2013 about 1,800 employees at the end of 2014 \u2013 by nearly 40%, he said.<\/p>\n<p>Offshore drillers have been buffeted from two directions: the collapse of drilling activity and the collapse in the daily rates they can charge for their offshore drilling rigs. So fewer rigs, and less money for each of the fewer rigs: Hercules\u2019\u00a0revenues in the second quarter plunged 67% from a year ago!<\/p>\n<p>And junk-rated companies like Hercules that need new money to stay afloat and service their debts are finding out that their burned investors have shut off the spigot.<\/p>\n<p>\u201cA leading indicator of further bankruptcies among other challenged high yield (HY) offshore drillers,\u201d is what Fitch Ratings calls Hercules.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Junk-Rated Offshore Drillers Headed into Bankruptcy: Fitch After fracking, offshore drilling. At the leading edge is rig-contractor Hercules Offshore. In March 2014, before the oil price collapsed, it had the temerity to sell for 100 cents on the dollar $300 million in junk bonds. Since then, its shares have collapsed to near zero. Its bonds [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[1361,195,3108,331,8229,412,1297,8228,1775,595,4254,4255],"class_list":["post-11181","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-bankruptcy","tag-debt","tag-fitch","tag-fracking","tag-hercules-offshore","tag-hydraulic-fracturing","tag-junk-bonds","tag-offshore-drillers","tag-oil-price-collapse","tag-oil-production","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11181"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11181\/revisions"}],"predecessor-version":[{"id":11182,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11181\/revisions\/11182"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}