From Houston (BN): The slowdown in Gulf of Mexico drilling is starting to have real impact.

HERCULES OFFSHORE, a shallow-water drilling and marine services contractor, announced it is cold-stacking four rigs in the GoM after a Q3 loss of more than $88mn. Hercules also reportedly plans to lay off more than 300 employees.

The cold-stackings have been mentioned publicly, but not the layoffs. Hercules CEO John Rynd cited the consolidation of EPL into Energy XXI and Apache properties into Fieldwood as cutting demand for Hercules’ rigs in the GoM, where its business is centred.

Utilisation fell to less than 70% in last quarter from more than 90% in the same period last year. Moreover, uncertainty due to the recent sharp drop in oil prices has clouded the outlook for business, Rynd said. He hoped for more clarity on operator plans by February.

As of February, Hercules owned 38 jackup rigs, owned or operated 24 vessels and employed 2,200 people, but 12 rigs and one vessel already had been cold-stacked.

From the North Sea (NT): For the first time since it was partly privatised in 2001, STATOIL has reported an after-tax loss.

In the third quarter, its operating profit was cut by more than half to NOK17 bn, leading to a net loss of NOK4.8bn ($695mn). With Helge Lund having just left, it was left to acting CEO Eldar Sætre to offer an explanation for the poor performance – lower prices, deferred gas sales and writedowns of onshore assets in Canada and exploration assets in the Gulf of Mexico and Angola.

Production, at 1.829mb/d, was only marginally down on the same period 2013, despite the divestment of some producing assets and natural decline. But oil prices fell by 8% over the period.

On the plus side the company made another big gas discovery off Tanzania and an oil discovery in the Grane area, brought two ‘fast-track’ projects into production, brought a compressor onstream on the Kvitebjørn field which will increase recovery by 220mmboe and introduced low-pressure production on Kristin which will yield an extra 160mmboe.

Offshore