Seahawk Drilling, Inc. (fka HAWKQ)

[Enterprising Investor]

Asset Purchase Agreement Approved (4/05/11)

On April 5, 2011, the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division approved an Asset Purchase Agreement (the “Agreement”) between Hercules Offshore, Inc. (“Hercules Offshore”) and its wholly owned subsidiary, SD Drilling LLC (collectively with Hercules Offshore, “Purchasers”), and Seahawk Drilling, Inc. (“Seahawk”) and certain of its subsidiaries (collectively with Seahawk, “Sellers”), pursuant to which Sellers agreed to sell to Purchasers, and Purchasers agreed to acquire from Sellers, all 20 of Sellers’ jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code (the “Acquisition”).
The purchase price for the Acquisition will be funded by the issuance of approximately 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk’s Debtor-in-Possession (“DIP”) loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The assets to be acquired will consist of 20 jackup rigs located in the U.S. Gulf of Mexico and related equipment, accounts receivable, cash and contractual rights. Assumed liabilities will be limited to specific items, such as accounts payable, with all other liabilities retained by Seahawk.
As previously reported, Hercules entered into the Agreement on February 11, 2011. Closing is subject to other conditions as provided in the Agreement. Assuming such conditions are achieved, we anticipate closing of this transaction to occur on or about April 20, 2011.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on February 15, 2011.

http://sec.gov/Archives/edgar/data/1330849/000095012311033009/h81207e8vk.htm