By Houston Business Journal

Hercules Offshore Inc. says idle rigs in the Gulf of Mexico are costing the Houston company $150,000 a day.

Appearing on CNBC Monday morning, Hercules (NASDAQ: HERO) John Rynd called attention to the fact that only one shallow water drilling permit has been issued since June 18, and the ⿿unofficial⿝ shelf moratorium means his company has about 250 employees on idle rigs.

⿿We currently have 48 marketed rigs in the Gulf of Mexico and there⿿s 14 idle,⿝ Rynd told CNBC. ⿿By this September, you can have 70 percent of the Gulf of Mexico shallow-water jack-up fleet idle due to no permits.⿝

The continental shelf drilling in the Gulf is mostly gas, and it does not fall under the federal governmentâ¿¿s deepwater moratorium. Even so, the newly formed Bureau of Ocean Energy Management, Regulation and Enforcement has only issued one permit in the last five weeks, Rynd said. From January to April of this year, before the April 20 Deepwater Horizon explosion, the organization â¿¿ then known as the Minerals Management Service â¿¿ issued 87 permits. Since May, about a week after the Deepwater Horizon sank and the extent of the spill was becoming evident, the total number of permits issued fell to 18.

Rynd said if things donâ¿¿t change by September, layoffs will be necessary to save the company. But layoffs are troublesome for more reasons than the obvious. For one, thereâ¿¿s no guarantee those employees will come back to Hercules when drilling resumes, which means training less experienced crews, Rynd said, which costs more money and could impact safety.

Copyright 2010 American City Business Journals
Copyright 2010