High-Spec Jackup Market: Hercules Offshore increases stake in Discovery Offshore

Hercules Offshore Inc. (HERO) said its acquired an added 6.1 million shares of Discovery Offshore SA (DISC.OS), bringing the contract driller’s stake to 28% in the Luxembourg-based owner of ultra high-specification jackup rigs.

Hercules shares were down 6% at $3.78 in recent trading. The stock is up 60% in the past year.

Houston-based Hercules said it paid an average of 9.02 Norwegian kroner ($1.60) per Discovery Offshore share, bringing its total investment in the company to about $34.1 million.

The company is overseeing construction, marketing and operations of rigs owned by Discovery Offshore, as well as performing other administrative functions.

Hercules President and Chief Executive John T. Rynd said, “Since our initial investment in Discovery Offshore in January 2011, the fundamentals of the offshore drilling industry have strengthened, and demand for ultra high-specification jackup rigs remains exceptionally strong.”

Hercules, which has racked up more than three years of losses, became the biggest rig contractor in the Gulf of Mexico’s shallow waters when it closed on a deal in April to acquire the rigs of weakened rival Seahawk Drilling Inc.

-By Tess Stynes, Dow Jones Newswires

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up