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Bulk Transporter  Dec 17  Comment 
Following passage of Cromnibus last weekend, the American Trucking Associations thanked Congress--particularly Senator Susan Collins (R-Maine)--for the common sense fix to two unjustified provisions of the current hours-of-service restart rules in...
Bulk Transporter  Dec 10  Comment 
It’s all hands on deck as National Tank Truck Carriers and the other councils that are part of the American Trucking Associations press their argument that the hours of service regulation’s 34-hour restart rule is fatally flawed and should be...
Automotive World  Dec 4  Comment 
The US Congress has announced plans to increase truck driver Hours of Service (HOS), which has been described by safety advocate groups as a move that will result in more highway deaths and injuries The post Hours of Service increase causes...
Market Intelligence Center  Oct 29  Comment 
After closing Tuesday at $28.85, Hornbeck Offshore Services Inc. (HOS) presents an attractive opportunity to get a 5.68% return in just 142 days, which is an annualized return of 14.59% (for comparison purposes only). To enter this trade, sell one...
SeekingAlpha  Oct 17  Comment 
By Rochelle Jenks: Hornbeck Offshore Services (NYSE:HOS) provides transportation and services to the off-shore drilling industry, primarily in the Gulf of Mexico. Deepwater drilling is a beast unto itself in the oil and gas industry. The offshore...
TheStreet.com  Oct 6  Comment 
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. aTheStreet Ratings quantitative algorithm...
Market Intelligence Center  Sep 29  Comment 
After closing Friday at $34.65, Hornbeck Offshore Services Inc. (HOS) presents an attractive opportunity to get a 4.60% return in just 82 days, which is an annualized return of 20.46% (for comparison purposes only). To enter this trade, sell one...




 
TOP CONTRIBUTORS

Hornbeck Offshore Services operates offshore supply vessels (OSVs), multi-purpose support vessels (MPSVs), and a shore-base facility. The company makes money by providing logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the US, Gulf of Mexico, and select international markets.[1] With increased regulation following incidents in offshore drilling in the Gulf of Mexico (GoM) such as the Deepwater Horizon oil spill by BP (BP), Hornbeck has been forced to diversify its business line from traditional upstream GoM based operations.

Business Growth

Hornbeck comprises of two business units:

  • Upstream operations primarily use OSVs and MPSVs. OSVs serve as exploratory and developmental drilling rigs, whereas MPSVs serve the same purposes except are significantly larger and more complex.[2]
  • Downstream operations provides services for the domestic tank barge industry, which is centered around service for marine transportation of crude oil, petroleum products and petrochemicals. The largest domestic market in this industry is on the East Coast.[3]

Trends and Forces

Following Deepwater Horizon, Government Regulations in the GoM has Tensed Tremendously

Most of HOS's operations are center around the Gulf of Mexico (GoM), but following BP's oil spill in the Deepwater Horizon incident, government regulations concerning offshore oil drilling particularly in the Gulf of Mexico have heightened, thereby influencing the bottom line for companies like HOS. In particular, the US government, through OPA 90, assigns liability to each responsible party for oil removal costs and a variety of public and private damages. Since HOS operates as a support group for oil drilling operations in the GoM, the company is likely to be liable to some extent should incidents occur in the GoM again.

HOS Operates in a High Fixed Costs Industry Making it Difficult to Shift in Demand

The industry in which HOS operates under incurs high levels of fixed costs through its OSV and MPSVs, which are unable to be easily changed regardless of level of business activity. These high costs especially hurt in times of low productivity due to reduced demand. Further weather interruptions such as during Hurricane Season causes significant negative effects as HOS continues to incur costs regardless the equipment is at bay or out at sea.

Competition

HOS competes with other offshore drilling support companies such as:

  • Tidewater (TDW) provides offshore supply vessels and marine support services to the offshore energy industry through the operation of offshore marine service vessels.[4]
  • Seacor Holdings (CKH) owns, operates, invests in and marketing equipment, in the offshore oil and gas, industrial aviation and marine transportation industries.[5]
  • GulfMark Offshore (GLF) provides offshore marine services primarily to companies involved in the offshore exploration and production of oil and natural gas.[6]




References

  1. HOS Business Description
  2. HOS FY2010 10-K, Pg 9
  3. HOS FY2010 10-K, Pg 10
  4. TDW Business Description
  5. CKH Business Description
  6. GLF Business Description
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