Houston-based Hercules Offshore is announcing the shut down of 5 more Gulf oil rigs as the price per barrel of crude remains at its lowest point in 5 years.
This is the company’s second wave of rig closures since oil prices began to drop late last year in response to a glut of product on the market.
Hercules announced its plan to write off upwards of $117 million in asset value in the 4th quarter of 2015, referring to the rigs as “non-marketable assets” in government regulatory filings with the BOEM.
Just last October, Hercules announced, in addition to closing 4 rigs, that it would be laying off 324 offshore workers in order to ease payroll costs and get them through this period of oversupply.
Unfortunately, with oil prices remaining under $50 per barrel and no signs of an immediate recovery on the horizon, firings are likely to continue for the foreseeable future.
As has happened in the past, oil companies will take whatever steps their executives deem necessary in order to preserve profits and weather the storm of low oil prices.
In the meantime, while companies work to protect themselves, offshore workers–the men and women who put their lives on the line each and every day to help make our country’s economy stronger– and their families will be the ones who suffer most.