Barclays Maintains an 'Underweight' on Hercules Offshore (HERO); GOM Dayrate Improvements Continue

Barclays maintains an 'Underweight' on Hercules Offshore (NASDAQ: HERO) price target of $3.00.

Barclays analyst says, "Outlook Improving, but Structural Challenges Persist. Dayrates in the GOM shallow water market continue to improve due to: 1) increased permitting; 2) improved economics from liquid rich wells' 3) rigs leaving the region; and 4) the timely consolidation of Seahawk. International demand has improved, and HERO has good relationships with key customers that will be requiring incremental units in the coming years. However, the continued bifurcation between new and older equipment coupled with an influx of newbuilds will likely cap international dayrates. Furthermore, heightened safety scrutiny in the GOM will likely exacerbate downtime for older units."

"We are adjusting our 2011 - 2013 estimated loss per share to $0.68/sh (from $0.65/sh), to $0.50 (from $0.55), and to $0.35 (from $0.40), respectively, largely reflecting improving jackup dayrate assumptions."

For more ratings news on Hercules Offshore click here and for the rating history of Hercules Offshore click here.

Shares of Hercules Offshore closed at $4.04 yesterday.

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