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Will Hornbeck Offshore Stock Break Through $4.00 Level?

Vladimir Zernov profile picture
Vladimir Zernov


  • I discuss the fundamental situation for OSV companies in the Gulf of Mexico region.
  • Fundamentals remain challenging.
  • Any upside above $4.00 will likely be short-lived in absence of positive fundamental changes.

I’ve been following Hornbeck Offshore (HOS) for quite some time now. This offshore support vessel (OSV) provider is focused on serving the U.S. Gulf of Mexico and is fighting an uphill survival battle. Unlike its peers GulfMark Offshore (GLF) and Tidewater (TDW), Hornbeck Offshore did not file for bankruptcy and continues negotiations with its creditors in order to extend maturities of debt.

So far, these negotiations did not include equitization of debt, so there’s a big chance that the common equity will survive going forward. I’ve already written about the company this year (here and here), so I won’t repeat basic facts and won’t rehash Q4 results. Instead, we’ll look into the future as all offshore drillers have already provided their quarterly results and fleet status reports, so we can assess the situation in the U.S. Gulf of Mexico and Hornbeck’s chances to improve its position.

Let’s look at the U.S. Gulf of Mexico floater market as we head into the end of the first quarter. Infield Rigs shows that 25 floaters are currently working in the U.S. Gulf of Mexico. We’ll assess the situation company by company since I believe that most readers are quite familiar with offshore drilling companies and it will help them see the big picture for the offshore support vessel industry, which provides services to drillers.

The biggest player in the Gulf right now is Transocean (RIG), which has drillships Deepwater Poseidon, Deepwater Pontus, Deepwater Conqueror, Deepwater Proteus, Deepwater Thalassa, Deepwater Asgard, Deepwater Invictus, Discoverer inspiration and Petrobras 10000 working there.

Deepwater Asgard was recently awarded a three-well contract plus a one-well option and is expected to work until at least June 2018. Petrobras 10000 is working until July 2018 and then heads to Brazil to work for Petrobras (PBR) until August 2019.

Ensco (

This article was written by

Vladimir Zernov profile picture
I'm a trader who trades both short-term and long-term. I started my career as a day-trader for a trading firm, but then turned to longer time frames and went on my own to manage my portfolio. I use technical analysis as well as fundamental analysis in my research.

Analyst’s Disclosure: I am/we are long RIG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I may trade any of the above-mentioned stocks.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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