QUOTE AND NEWS
Bulk Transporter  Jul 2  Comment 
The Truck Renting and Leasing Association (TRALA) submitted comments to the Federal Motor Carrier Safety Administration (FMCSA) regarding its plans to mandate electronic logging devices (ELDs) in commercial trucks where drivers are required to...
Market Intelligence Center  Jun 27  Comment 
For a hedged play on Hornbeck Offshore Services Inc. (HOS), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the Sep. '14 $45.00 covered call for a net debit in the $42.74 area. That is also the break-even stock price for...
Cloud Computing  Jun 25  Comment 
BigRoad, a leading provider of fleet applications for trucking and motorcoach, and Sylectus, trucking's most powerful network and a business unit of Omnitracs Canada Inc., announced today a joint commitment to help fleets and drivers improve HOS...
Bulk Transporter  Jun 11  Comment 
National Tank Truck Carriers Inc was among the trucking industry groups commending the Senate Appropriations Committee on June 5 for adopting a solution proposed by Sen Susan Collins (R-ME) to address the unjustified changes to the restart...
Market Intelligence Center  Jun 9  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithm on Hornbeck Offshore Services Inc. (HOS) could yield about 6.06% (21.46% annualized, for comparison purposes only) in 103 days. Pair a long position in the stock with...
Market Intelligence Center  Jun 5  Comment 
For a hedged play on Hornbeck Offshore Services Inc. (HOS) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Sep. '14 $44.00 covered call for a net debit in the $41.62 area. That is also the break-even stock price...
Bulk Transporter  May 28  Comment 
The Federal Motor Carrier Safety Administration announced in the May 23 Federal Register that it received an application from the American Trucking Associations for an exemption from the 14-hour provision of the Agency's hours-of-service...
Market Intelligence Center  May 22  Comment 
After Wednesday’s trading in Hornbeck Offshore Services Inc. (HOS) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 6.15% or 18.54% (for comparison purposes only), while...
Market Intelligence Center  May 16  Comment 
Hornbeck Offshore Services Inc. (HOS) presents a trading opportunity that offers a 6.49% return in just 127 days. A covered call on Hornbeck Offshore Services at the $41.00 level expiring on Sep. '14 offers an assigned return rate of 6.49% or...
SeekingAlpha  May 9  Comment 
By Nate Costello: Hornbeck Offshore Services (HOS) focuses on providing advanced marine solutions to meet the evolving needs of the deepwater and ultra-deepwater energy industry in domestic and foreign locations.The Company provides marine...




 
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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