Seahawk becomes first Gulf of Mexico drilling company to file bankruptcy due to offshore drilling moratorium
The first off-shore drilling company in the Gulf of Mexico to declare bankruptcy has blamed the government-imposed standstill for a shortage of shallow-water permits following the summer’s massive oil spill. Texas-based Seahawk Drilling, the second-largest shallow-water driller operating in the Gulf, announced it had filed for bankruptcy Friday and would be selling its remaining assets to Hercules Offshore.
The asset sale through Chapter 11 is valued at $105 million.
According to the press release announcing the sale, the company’s liquidity and revenue stream “have been adversely affected by the dramatic slowdown in the issuing of shallow-water permits in the U.S. Gulf of Mexico following the Macondo well blowout.”
Chief Executive Randy Stilley said that while the outcome is best for the company’s stakeholders, “I think it is important to note that Seahawk was forced to seek strategic alternatives only after an unprecedented decline in the issuance of offshore drilling permits following the Macondo blowout.”
Democratic Sen. Mary Landrieu of Louisiana called the bankruptcy an “economic nightmare.”
“I have repeatedly said that the administration’s excruciatingly slow release of oil and gas permits will cause job losses,” Landrieu said in a statement. “How many more rigs have to leave and how many more businesses have to close before it realizes the havoc the de facto moratorium is wrecking on the Gulf Coast?”
Landrieu went on to say that although the shallow-water industry was not part of the moratorium, the regulations have made it “very difficult” for anyone to conduct business in the Gulf.
Seahawk is headquartered in Houston. The company’s shares are publicly traded on the NASDAQ stock market as HAWK.
The Obama Administration has had a back-and-forth position on offshore drilling. Earlier this month, a U.S. District Court judge ruled the administration acted in contempt by pursuing a moratorium after another judge previously struck it down. In March of 2010, President Obama expanded access to offshore drilling. That action was reversed in May after the oil rig explosion in the Gulf.