The WorkBoat Composite Index closed out 2013 by gaining 4.5 percent. The 77-point gain in December boosted the Index’s overall increase in 2013 to 386 points, or over 27 percent. This follows 2012 when the Index gained 12 percent.
The Philadelphia Oil Service Index was also up over 27 percent in 2013, helped by strong demand in the U.S. Gulf. At the Cowen and Company Third Annual Ultimate Energy Conference held in New York in December, Craig Muirhead, vice president and treasurer for Hercules Offshore Inc., was bullish on the Gulf for 2014. Houston-based Hercules, which owns and operates one of the largest jackup rig and liftboat fleets in the world, has seen continued improvement in its Gulf of Mexico backlog.
Hercules has seen day rates improve for its fleet of Gulf jackups. The average revenue per day for its Gulf of Mexico fleet was $85,000 in the third quarter, said Muirhead. “Today it’s about $100,000.” The improved day rates will be reflected in the company’s earnings throughout 2014.
At what point do rigs from other regions start migrating back to the U.S.?
Muirhead said he doesn’t see that happening. A lot of the rigs initially left the U.S. Gulf because they could get higher long-term day rates elsewhere. “But the international markets are still very strong. The largest markets for jackups, Middle East, Southeast Asia, West Africa, Mexico, all are working full out. They are short of rigs, they are looking to add capacity to those markets and increase their rig count.”