In a report issued Wednesday morning, Cowen analyst J.B. Lowe reiterated his Outperform rating and $9.50 price target on Hercules OffshoreHERO
, saying the fire on its 265 platform presented a solid buying opportunity. The fire, which caused shares to drop significantly on Tuesday's session, is expected to yield $47 million in book value insurance proceeds. The damaged 265 rig contributes roughly 4 percent of the company's EBITA for 2014, and could be deemed a total loss. Lowe also stated that the removal from the Gulf of Mexico jackup would be a positive for jackup rates in the future. As a side note, Hercules currently has 18 of 35 active jackups in the Gulf of Mexico. Following the news Hercules shares fell sharply, and have since recovered, remaining down 5.20 percent to $7.29 midway through trading Wednesday.
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