Hercules Offshore, Inc. (HERO) Monday said it has agreed to sell eleven inland barge rigs, which includes three active rigs, eight cold stacked rigs, and related assets for cash proceeds of approximately $45 million. The firm seemed uncertain regarding the closing and said it depends upon expiration of existing contracts on the three active rigs.
The initial closing is expected to include ten of the rigs and occur in late second quarter, at which time Hercules is anticipated to receive $35 million. Closing on the final rig is expected in early third quarter, at which time it is expected to receive the remaining balance of $10 million. Hercules expects to record a non-cash impairment charge of approximately $40 million as a result of the sale in the second quarter.
Commenting on the development, John Rynd, CEO of Hercules Offshore said, "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."
Excluded from the Inland Asset Package are the Hercules 27, for which the firm has a separate agreement to sell the rig to a third party for $5 million, the Hercules 52, and the Hercules 9, it said in a statement. Hercules added that it will retain existing working capital within the Inland segment.
For comments and feedback: editorial@rttnews.com