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HOUSTON — 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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Alan Sayre in New Orleans contributed to this report.
