CORRECTED - CORRECTED-(Aug 25)-Seahawk Drilling plans rigs sale in US

Thu Aug 26, 2010 3:49pm EDT

Related Topics

(Corrects Aug. 25 story to add dropped word "margin" in paragraph 6)

* Sees 4-5 rigs working in Q3 at current dayrates

* Sees Q3 cash burn of about $10-$15 mln

Aug 25 (Reuters) - Seahawk Drilling Inc (HAWK.O), which has the second-largest fleet of jack-up rigs in the spill-hit Gulf of Mexico, said it is looking to sell assets in the United States and planning international buys, to insulate it from regulatory uncertainties in the US Gulf.

"The regulatory environment in the US Gulf is too uncertain. It is better for us to go and buy jack-ups elsewhere, which are trading at its lowest since 2004," Chief Executive Randy Stilley said in an oil and gas conference.

"We see a number of potential acquisitions that are immediately accretive...in regions with foreseeable long-term demand."

With only three new major wells permitted since the Macondo well blowout in April, Stilley said lack of work would require his company to look at a new credit facility to meet working capital needs.

Seahawk, which spun out of Pride International PDE.N last year, has about 17 percent share of the Gulf jack-up market and is only behind Hercules Offshore (HERO.O).

For the third quarter, Seahawk expects an average of four-five rigs working at current average daily margin of about $14,000. It has a total of 20 available jack-up rigs, which are used in shallow-water drilling.

For July-September, Houston-based Seahawk sees cash burn -- the rate at which a new company uses up its cash resources or capital before producing a positive cash flow -- of about $10-$15 million.

Shares of Seahawk, which have lost 63 percent of their value since the BP well blowout on April 20, closed at $7.25 Wednesday on Nasdaq. (Reporting by Krishna N. Das in Bangalore; Editing by Vyas Mohan)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.