Gulf oil drilling company Seahawk files for bankruptcy, selling its 20 shallow water rigs, cites Obama permit delays,

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Future of 494 jobs unknown. Feb. 11 article by Houston Chronicle (below following AP article) contains Seahawk statement citing permit delays.

2/12/11, "Seahawk Drilling seeks bankruptcy, to sell assets," AP, (in Houston Chronicle)

"Seahawk Drilling Inc. has filed for bankruptcy protection and plans to sell its fleet of offshore drilling rigs to a competitor for $105 million.

Seahawk, which announced the sale to Hercules Offshore Inc. Friday, has been

• hurt by a slowdown in Gulf of Mexico drilling

after the BP oil spill last April. The government halted drilling in deep waters and imposed tough

• new rules that have curtailed all energy exploration in U.S. waters.

The deal creates a larger company with a more diverse fleet and greater operational flexibility, Seahawk said. Seahawk owns

• 20 jackup rigs for shallow water exploration,
  

while Hercules owns 30 rigs, vessels and other equipment. It also provides drilling services.

• Both companies are based in Houston.

Hercules Offshore plans to buy Seahawk's assets with 22.3 million shares of its stock, $25 million in cash to retire Seahawk debt and additional cash for working capital. The Feb. 10 closing price of $3.62 per share for Hercules' stock brings the deal's value to $105 million.

The sale will be carried out as part of Chapter 11 bankruptcy protection. Seahawk filed for bankruptcy protection Friday, and will seek expedited hearings for court approval of the deal.

• The sale is expected to close in the second quarter.

If the bankruptcy plan is approved by the court and regulators, Seahawk will cease operations as an independent company.

It's unclear what will happen to the Seahawk's 494 employees,

• company spokesman Thomas Becker said. Of Seahawk's 20 drilling rigs, seven are now deployed on projects, he said.

Seahawk said it has obtained a $35 million credit facility to help fund operations until the deal closes.

In November, the company said it was considering a merger or asset sales to bolster shareholder return

• following the drilling slowdown.
  

• It reported a third-quarter loss and sharply lower revenues.

Shares of the company rose 43 cents, or 5.4 percent, to close Friday at $7.90. They lost $3.90 in after-market trading, however. Shares have traded in a range of $6.79 and $23.07 in the past year.

Hercules shares were unchanged Friday at $3.62. They gained 14 cents in after-market trading."

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2/11/11, "Hercules Offshore buying Seahawk Drilling's assets," by Houston Chronicle

"Seahawk Drilling, which previously has said it suffered financially from the oil-spill-related slowdown in Gulf of Mexico activity, is selling almost all of its assets to Hercules Offshore in a cash-and-stock deal worth $105 million, the two Houston companies said Friday.

• As part of the deal, Seahawk will file for Chapter 11 bankruptcy and seek expedited court approval.

Seahawk, in a statement, said the company's revenues had been affected adversely "by the dramatic slowdown in the issuing of shallow-water drilling permits in the U.S. Gulf of Mexico following the (BP) Macondo well blowout."...

Seahawk said other factors weighing on its finances included continued

• low prices for natural gas and
  
• the general economic downturn.

"While we are pleased with the successful outcome of our strategic review, and believe this is a positive result for both companies and our stakeholders, I think it is important to note that

• Seahawk was forced to seek strategic alternatives only after an
  

• unprecedented decline in the issuance of offshore drilling permits

following the Macondo blowout," Stilley said.

"The decision by regulators to arbitrarily construct unnecessary barriers to obtaining permits they had traditionally authorized has had an adverse impact not only on Seahawk,

• but on the sector as a whole."

Interior Department regulators have denied dragging their feet on approval of shallow-water permits. They have said post-spill safety and environmental rules simply made the process more complex.

• By November — when Seahawk announced it might put itself up for sale amid the difficult conditions - regulators said new permits were being issued faster.

Michael Bromwich, director of the federal Bureau of Ocean Energy Management, Regulation and Enforcement, told the Chronicle on Friday that since shallow-water permitting resumed in June, there has not been a significant backlog of pending permits.

Seahawk has lined up financing to keep operating while the deal is pending, and Stilley said the company expects no impact on its operations during the process. It was spun off from Pride International in 2009 and is the

• second-largest offshore drilling contractor, behind Hercules Offshore,
  

operating in the shallow waters of the Gulf of Mexico."

via Vladimir, RedState.com, who says there is "now only one contractor in its shallow water niche."

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