Gulf of Mexico takes another possible hit


                    

Hercules Offshore Drilling Rig Partially Collapses Off Louisiana Coast

Reuters  |                                                                                      Posted: 07/24/2013  1:00 pm EDT

hercules offshore drilling rig

This photo released by the Bureau of Safety and Environmental Enforcement shows natural gas spewing from the Hercules 265 drilling rig in the Gulf of Mexico off the coast of Louisiana, Tuesday, July 23, 2013. No injuries were reported in the midmorning blowout and there was no fire as of Tuesday evening at the site, about 55 miles off the Louisiana coast in the Gulf of Mexico. (AP Photo/Bureau of Safety and Environmental Enforcement)
 

HOUSTON, July 24 (Reuters) – A shallow-water Gulf of Mexico  drilling rig has partially collapsed off the coast of Louisiana  after catching fire because of a ruptured natural gas well, U.S.  regulators said on Wednesday.
The U.S. Bureau of Safety and Environmental Enforcement said   beams supporting the derrick and rig floor on the Hercules  Offshore jackup rig had crumpled over the rig  structure.
A third firefighting vessel was en route to the scene,  though no sheen was seen on the water’s surface during  overflights conducted on Wednesday morning, the regulator said.
The fire ignited shortly before 11 p.m. CDT on Tuesday (0400  GMT). The Walter Oil & Gas-owned well had ruptured hours earlier  as Hercules worked to prepare it for production. The well  released natural gas, but no oil, according to BSEE.
No one was on board when the rig caught fire, BSEE said.      Hercules said 44 people were evacuated after the rupture and no  injuries were reported. The rig is in 154 feet (47 m) of water  about 55 miles (88.5 km) south of the coast of Louisiana.
Hercules said earlier on Wednesday that the company was  working to plug the well.
It might drill a relief well, which would intersect the  ruptured well and provide another avenue for cement to plug it,  Hercules said.
BSEE said it directed privately held Walter Oil & Gas to  prepare to move a second jackup rig to the scene, possibly to  drill the relief well.
Hercules shares have slipped since the accident, erasing  about $83 million from the company’s market capitalization.
BSEE has tightened safety regulations for offshore oil and  gas operations since the BP Plc 2010 deepwater blowout  and oil spill that spewed more than 4 million barrels of crude  into the Gulf. It took BP nearly three months to cap that  ruptured well, which was ultimately killed and plugged by way of  a relief well.
A jackup rig has legs that can be extended to move the hull  above the surface of the water. Unlike floating rigs in deeper  waters, the legs on jackups reach the sea floor.
Analysts at CapitalOne Southcoast, an investment bank in New  Orleans, noted that the jackup market remains very tight, so “if  the rig suffers major damage, this should have a positive impact  on day rates.” They also noted that Hercules has rigs in storage  that could be used to replace the damaged one.
Analysts at Cowen and Company, another investment bank, said  the fire-damaged rig contributes about 4 percent to the  company’s earnings, and could be a total loss. Hercules has 18  of 35 jackups currently active in the Gulf, the analysts said

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