Richie

Hercules Offshore: Getting to Know a Hero

As to your last point ($100 - $150 oil), the US will certainly enter a sustained recession (especially given our other current problems). If we go into recession, the rest of the world will as well, as we are the world's buyer of last resort. Demand for all commodities from all countries will diminish. Oil, gold, copper, zinc etc. will drop dramatically in price. That will also discourage the ag sector and the production of ag sources of energy.

Today, this country is not in a position to live with oil at over $100. It won't happen, because we cannot afford to allow it to happen.

Hercules Offshore: Getting to Know a Hero

!) Hero hasn't been above its 50 DMA (other than for one day last week) many weeks.

2) Hero's not a multinational, eventhough they offer their services all over the world --- so their revenues and profits are recorded in the dollar, which you correctly observe is in a state of collapse.

3) Much of the drilling by HERO is for Nat Gas. The markets perceive (rightly or wrongly) that we have a glut of Gas so Hero's rigs, boats and services will continue to operate at only about 70% of capacity --- well below the levels of a year ago.

I own a ton of HERO shares. I hope that there are other, stronger reasons to own it than those you have proposed. ie, The idea that oil will trade at a sustained price of $100 -$150 per barrel is off the wall. At that price, the economies of the world will be so far into recession (depression) that demand will totally collapse and so will the price!

Hercules Plus Todco Equals One Powerful Company

You have found what is perhaps the most prized merger of (near) equals in the shallow water drilling industry. The combination has explosive potential, even though usage as well as day rates are down YOY marginally. HERO will now dominate shallow water drilling in the Gulf.

The one problem I see is the massive "Naked Short" position in HERO's shares. I'm not sure how long these manipulators can keep the stock's price down. Does anyone have any input as to how the arbs ultimately resolve their short position --- or do they just eat their losses when/if a deal is finally consumated???