Hercules Offshore Inc, stung by slumping demand for drilling services in older Gulf of Mexico oilfields, said on July 23 it plans to file for creditor protection in about three weeks and emerge several months later with a restructured balance sheet.

The small company, which rents out jackup rigs to drill shallow water wells that tend to yield less than giant deepwater ones, has been struggling for months because of an oversupplied rig market and slumping oil prices that have forced producers to slash spending.

In November it cut 15 percent of its workforce, or 324 jobs, and last month started talks with creditors for an orderly bankruptcy filing.

Hercules said on July 23 it has support for the filing from holders of over two thirds of its collective outstanding debt. It added that the prepackaged process will reduce the time it spends in bankruptcy protection, which it hopes to leave early in the fourth quarter.

The company's balance sheet lists $266 million in current assets and $1.35 billion in current liabilities.

Hercules shares were down 5.8 percent at 15.35 cents on July 23. It posted a second-quarter net loss of $88.3 million, compared with net income of $6.6 million in the same period a year ago.

Offshore