A report by Fitch Ratings agency has forecast more bankruptcies among offshore oil drilling companies, to follow the example of Houston-based Hercules Offshore, which filed for Chapter 11 in June.
Fitch’s report identifies Hercules, which underwent severe financial restructuring, as a herald of things to come among what it calls “challenged high yield (HY) offshore drillers”.
The industry has been hit by a perfect storm of shrinking oil prices and oversupply of rigs, says Fitch, leading many to mothball rigs and lay off dozens, even hundreds, of staff. But those corrective actions may not be enough, as Hercules found out.
Fitch Ratings is one of America’s three nationally recognised statistical rating agencies (along with Moody’s and Standard and Poor’s) as designated by the Securities and Exchange Commission (SEC).