Seahawk Drilling plans to soar to international status within a few years. COO Kurt Hoffman talks with April Terreri about the shallow-water drilling company.
Less than a year ago Seahawk Drilling spun off from Pride International, one of the largest international offshore drilling contractors. As a newly formed stand-alone, publicly traded company, Seahawk Drilling became one of the largest shallow-water drilling contractors in the Gulf of Mexico, with a fleet of 20 jackup rigs focused primarily on shallow-water operations for natural gas development.
“Seahawk operates in depths of 200 to 300 feet on the Gulf of Mexico shelf, with natural gas drilling accounting for 80 percent of our drilling operations and the remaining 20 percent of our business involved in drilling for oil,” explains Kurt Hoffman, senior vice president and COO of the Houston-based company.
Within the next two to three years, Seahawk Drilling will look different from the company it is today. With a clean balance sheet, Seahawk is ready to begin its flight to become an international drilling contractor. “We have a 100 percent presence in the Gulf,” Hoffman says, “but we want to become more than one-dimensional by searching for international drilling opportunities that historically have strong fundamentals for the shallow-water jackup business, such as in the Middle East, West Africa and India, to name a few.” He adds that the company is currently evaluating several options.
Hoffman notes the attraction in these international locales is that national oil companies are owned and operated by the governments of the respective countries. “National oil companies have a longer business view that relates to longer-term contracts for us, which creates additional value for our shareholders.”
Current drilling operations in the Gulf of Mexico have been adversely affected by the moratorium imposed by US Interior Department for contractors with rigs operating in water depths greater than 500 feet, as well as for shallow-water contractors like Seahawk whose clients are now required to comply with tighter safety rules for shallow-water wells, as mandated by the Minerals Management Service (MMS), the US offshore oversight agency.
Hoffman admits that the number one challenge facing the company and the industry now is the BP blowout incident that is seriously affecting every company in the industry. “Although we’ve been told that shallow-water drilling—defined by the government as less than 500 feet—is excluded from the six-month deep-water drilling moratorium, we know that the government is forming new rules and regulations that will affect shallow-water drilling as well. All our customers who already had permits to drill in the Gulf of Mexico are now going to have to go through a re-permitting process under the new MMS guidelines and regulations. This could cause a 45-day to 60-day delay in our customer’s ability to receive a drilling permit.”
The rippling effect of this will have serious negative impacts on the overall economy. “This will impact not only the workers on the rigs but the boat and helicopter companies that supply the rigs and the shore-based infrastructure like restaurants, hotels and trucking,” warns Hoffman. Another concern of an extended moratorium is that drilling contractors and oilfield service companies would be forced to deploy their assets outside of the US Gulf of Mexico. “I cannot urge the government enough to get the new regulations in place as quickly as possible so we can all continue our operations and in the process save thousands of jobs and continue expanding employment opportunities in the Gulf,” states Hoffman.
With today’s 24-hour news cycle focused relentlessly on the BP oil spill caused by an explosion more than two months ago, the question of safety is on everyone’s minds. “Our industry has never had a bigger spotlight on it than it does today,” says Hoffman. “Safe and efficient operations are the foundation upon which we operate. Safety of our people and our equipment—as well as environmental safety—are aspects of our business that we monitor on a daily basis.”
For example, he points out that the blowout preventers for deep-water rigs are submerged and rest on the ocean floor, whereas preventers for shallow-water operations are located on the rig in full view. “So you can see them, touch them, inspect them and test them on a regular basis.” Monthly safety statistics are reported to the International Association of Drilling Contractors (IADC), the worldwide drilling organization whose mission is to foster responsible standards, practices, legislation and regulations that provide for safe and environmentally sound drilling operations. “I’m proud to say that Seahawk Drilling does a very good job in managing our safety culture.”
Customer service is a key fundamental toward the continued success of Seahawk’s growth, Hoffman explains. “We want to be able to differentiate our services by demonstrating that we operate safely and efficiently. We want clients to choose Seahawk because they believe that we bring them the best value to meet their objectives.” www.seahawkdrilling.com
