Hercules Cuts Over 300 Offshore Jobs

By MarEx 2014-11-05 14:53:00

Hercules Offshore plans to lay off 324 offshore Gulf of Mexico workers, roughly 15 percent of its workforce, because of a decline in business. The company suffered an $88.6 million third quarter loss on October 23.

The Houston-based drilling rig contractor sent a letter to the Texas Workforce Commission last week, saying the company would lay off the employees on or about December 31, 2014. The loss of jobs is related to Hercules’ closure of four offshore oil rigs in the GoM.

The affected employees received formal notice of the job cuts, and the cuts are likely to be permanent. The employees laid off mainly disembark for travel to the rigs from the company's docks in nine locations – in Louisiana and Texas.

Hercules’ President and CEO stated that the company's business outlook may not improve until sometime next year. The Houston Chronicle deemed this “one of the industry's most pessimistic responses yet to falling crude prices.”

Lower crude prices have forced oil companies to pull back on offshore drilling. U.S. benchmark crude fell $1.76 to $78.78 a barrel on Monday. Oil companies generally face more pressure from investors to start paring back their most expensive operations when oil prices fall.