Low Prices Put Oil Driller in Chapter 11

     (CN) – Low oil prices and oversupply forced Hercules Offshore drilling company to file for Chapter 11 bankruptcy protection, and industry watchers believe more bankruptcies are coming.
     Hercules Offshore and more than a dozen affiliates filed for bankruptcy on Aug. 13 in Delaware, listing more than $1.2 billion in debts to U.S. Bank alone.
     Hercules, based in Houston, has laid off hundreds of workers this year, faced with low prices and a glut of drilling rigs in the Gulf of Mexico and elsewhere – its own and competitors’.
     The “fracking revolution” in oil drilling has driven oil prices to their lowest rate in six years, and drillers can no longer rely on backlogged orders for more drilling work, Fitch Ratings service said.
     Operating an offshore rig can cost as much as $500,000 a day. Leasing a rig alone can cost more than $100,000 a day, though that price has dropped as the market tumbled. Hercules said in financial reports that it has been losing money and has cut the number of its rigs’ operating days by more than half since 2013.

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