Offshore Natural Gas Rig Burning in Gulf of Mexico

24/7 Wall St.

Yesterday afternoon, Hercules Offshore Inc. (HERO) reported a problem at a natural gas well in the shallow waters of the Gulf of Mexico about 55 miles offshore of Grand Isle, La. All 44 workers on the platform were evacuated safely yesterday.

Last night the well caught fire and continues to burn today, and a slight sheen of oil was seen dissipating on the surface. The federal Bureau of Safety and Environmental Enforcement (BSEE) has sent a firefighting boat to the scene according to a report from the Associated Press.

The platform was not producing natural gas at the time it began leaking, but Hercules Offshore was completing a sidetrack well, which is a new entry to an existing well bore and is sometimes used to fix a problem in the original bore. The well is owned by Walter Oil & Gas.

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Earlier this month another old, non-operating rig was evacuated in the Gulf of Mexico. At that well, workers were plugging a well first developed in the 1970s in preparation for abandonment. That well is owned by Talos Energy, a joint venture of Apollo Global Management LLC (APO) and Riverstone Holdings.

Shares of Hercules Offshore are down about 5.5% in early trading this morning, at $7.27 in a 52-week range of $3.35 to $7.96.

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