Hornbeck liquidity outlook little changedCompany News // August 3, 2017
Hornbeck Offshore has announced its second quarter results, which indicate that although it has sufficient cash to continue operations through 2019 it remains unable to make payments on its Senior Notes that are due in 2020 and 2021 respectively.
As of 30 June 2017, the company's total liquidity (cash and credit availability) was US$328.5 million, comprising US$124.8 million of cash and US$203.7 million of availability under a new credit facility, which represents an increase of US$44.4 million, or 16%, from the end of the first quarter.
As of 31 March 2017, the company's total liquidity was US$284.1 million, comprising of US$209.1 million of cash and US$75.0 million of availability under an old credit facility.
The company projects that, even with the currently depressed operating levels, cash generated from operations together with cash on hand and availability under the new credit facility should be sufficient to fund its operations and commitments at least through 31 December 2019.
"However," said Hornbeck, "absent a significant recovery of market conditions such that cashflow from operations were to increase materially from projected levels and/or further management of its funded debt obligations, the company does not currently expect to have sufficient liquidity to repay the full amount of its 5.875% Senior Notes and 5.000% Senior Notes as they mature in fiscal years 2020 and 2021."
Hornbeck said the recently completed credit facility was the "first step" in addressing the maturities of its unsecured notes, but said it remains "fully cognizant" of the challenges currently facing the offshore oil and gas industry and continues to review its capital structure and assess its strategic options.