8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): May 31, 2016

HERCULES OFFSHORE, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-37623	56-2542838
(State of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)
9 Greenway Plaza, Suite 2200 Houston, Texas		77046
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (713) 350-5100

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

In connection with previously disclosed discussions to negotiate an agreement with respect to a potential recapitalization, business combination or other alternative strategic transaction with respect to Hercules Offshore, Inc. (the “Company”), the Company entered into confidentiality agreements (the “Confidentiality Agreements”) with certain holders of the Company’s first lien indebtedness and certain stockholders of the Company. The Company is making the disclosure herein in accordance with the terms of the Confidentiality Agreements, which require, upon the occurrence of certain events as specified therein, the public disclosure of all material non-public information provided pursuant to the Confidentiality Agreements (the “Cleansing Materials”).

The inclusion of the Cleansing Materials in this Current Report on Form 8-K, including the information in Exhibit 99.1, should not be regarded as an indication that the Cleansing Materials reflect current estimates or expectations, beliefs and assumptions of management about prospects for the Company’s business, changes in general business or economic conditions, or any other transaction or event that has occurred or may occur or that was not anticipated at the time the information was prepared. The Cleansing Materials likely do not reflect either current results or future performance. The Cleansing Materials were prepared for use in discussions with certain holders of debt and equity of the Company, and for other management decisions and are subjective in many respects. The Cleansing Materials are included herein only because they were provided under the Confidentiality Agreements and are contractually required to be disclosed by the Company. The Cleansing Materials were not prepared with a view toward public disclosure. The information included in Exhibit 99.1 was prepared for disclosure under the Confidentiality Agreements and does not reflect any subsequent events and adjustments, including adjustments customarily made in year-end balance sheets, including any asset impairments, debt reclassifications and other matters.

The information in the Cleansing Materials is dependent upon assumptions with respect to commodity prices, production, development capital, exploration capital, operating expenses, availability and cost of capital and performance as set forth in the Cleansing Materials. Any financial projections or forecasts included in the Cleansing Materials were not prepared with a view toward public disclosure or compliance with the published guidelines of the Securities and Exchange Commission (the “SEC”) or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present the Company’s financial condition in accordance with accounting principles generally accepted in the United States. The Company’s independent accountants have not examined, compiled or otherwise applied procedures to the projections and, accordingly, do not express an opinion or any other form of assurance with respect to the projections. The inclusion of the projections herein should not be regarded as an indication that the Company or its representatives consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. Neither the Company nor any of its representatives has made or makes any representation to any person regarding the ultimate outcome of the Company’s proposed restructuring compared to the projections, and none of them undertakes any obligation to publicly update the projections to reflect circumstances existing after the date when the projections were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error.

As previously disclosed by the Company on the Form 8-K filed on May 27, 2016, the Company and certain of its U.S. domestic direct and indirect subsidiaries (together with the Company, the “Debtors”) on May 26, 2016, entered into an agreement (the “Restructuring Support Agreement”) with an ad hoc group of lenders (each an “Ad Hoc Group Member”) representing approximately 99% of the obligations outstanding under the Credit Agreement entered into on November 6, 2015, among the Company and certain of its subsidiaries, as guarantors, and Jefferies Finance LLC, as administrative agent and collateral agent, and the lenders party thereto.

The Restructuring Support Agreement sets forth, subject to certain conditions, the commitment to and obligations of, on the one hand, the Debtors, and on the other hand, each of the Ad Hoc Group Members (and any successors or permitted assigns that become party thereto) in connection with a controlled wind down of the Debtors’ operations pursuant to a pre-packaged plan (the “Plan”) to be filed under Chapter 11 of the United States Bankruptcy Code. Under the terms of the Restructuring Support Agreement, the Company is required to commence solicitation of votes to accept or reject the Plan by May 31, 2016. Accordingly, on the date hereof, the Debtors commenced such solicitation. Copies of the Plan, the related disclosure statement and the exhibits and attachments to those documents may be found at http://cases.primeclerk.com/herculesballots.

The information included in this Form 8-K under Item 7.01 and Exhibit 99.1 attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that Section, unless the registrant specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Form 8-K are forward-looking and are based upon the Company’s current belief as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities that the Company plans, expects, believes, projects, estimates or anticipates will, should or may occur in the future are forward-

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looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in commodity prices for oil and gas, operating risks, liquidity risks and the Company’s ability to continue as a going concern, political and regulatory developments and legislation, and other risk factors and known trends and uncertainties as described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC. For a more detailed discussion of risk factors, please see Part I, Item 1A, “Risk Factors” of the Company’s most recent Annual Report on Form 10-K and Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016 for more information. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in the forward-looking statements. The Company assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Certain Projections and Financial Information furnished under Item 7.01

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HERCULES OFFSHORE, INC.
Date: May 31, 2016	By:	/s/ Beau M. Thompson
		Beau M. Thompson
		Senior Vice President, General Counsel and Secretary

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Exhibit Index

Exhibit Number	Description
99.1	Certain Projections and Financial Information furnished under Item 7.01

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EX-99.1

Exhibit 99.1

Summary of Bidder Interest

	Latest Bid	Comments
	>   $470mm(1)(3) (excl. Saudi fleet)
Bidder A	•    $250mm equity(2)	>   Transferability of Highlander contract key requirement of bid
	•    $220mm cash
	>   $423mm(3)
Bidder B	•    $250mm take-back debt	>   Transferability of Highlander contract key requirement of bid
	•    $173mm cash
Bidder C	>   $450mm	>   Majority of funding not accounted for
	•    $450mm cash
	>   $375mm(3)
Bidder D	•    $341mm in cash	>   Bid does not include Highlander
	•    $33mm in stake in SPV

Note: All bids exclude $12mm of professional fees.

(1) Excludes Hercules 260.

(2) +/- 10% collar.

(3) Excludes Hercules 208, 267 and liftboats.

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Hercules Offshore, Inc. - Strategic Review Process Projections⁽¹⁾ 5/2/16

$000	2016E			2017E			2018E			2019E
Income Statement
Revenues	$	238,085		$	450,628		$	526,032		$	592,448
Operating Costs		210,485			294,299			324,035			334,257
Gross Profit		27,600			156,330			201,997			258,191
General & Administrative		42,901			41,109			41,749			43,075
EBITDA		(15,301	)		115,220			160,248			215,115
Depreciation and Amortization		33,036			45,500			58,601			75,548
Impairment of PP&E		—			—			—			—
Operating Income		(48,337	)		69,720			101,647			139,567
Interest (Expense)		(52,596	)		(52,800	)		(52,854	)		(52,909	)
Other Income (Expenses)		2,088			378			350			0
Pretax Income		(98,845	)		17,298			49,142			86,658
Income Tax (Expense)		(6,606	)		(13,374	)		(14,105	)		(15,341	)
Income (Loss) from Continuing Operations		(105,451	)		3,924			35,037			71,317

(1) The projections included in the Cleansing Materials were created by management and used in connection with a strategic review process as, among another things, an aid for potential buyers in evaluating HERO’s future business prospects. Additionally, these projections were provided to certain holders of debt and equity. Note: Information contained herein is based on accounting principles generally accepted in the United States and certain non-GAAP financial measures and is not indicative of current fair market values.

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Hercules Offshore, Inc. - Strategic Review Process Projections⁽¹⁾ 5/2/16

$000	2016E			2017E			2018E			2019E
Balance Sheet
Current Assets
Cash and Equivalents(2)		207,583			178,541			188,871			252,949
Restricted Cash (Hercules)		—			—			—			—
Accounts Receivable, Trade		89,067			122,986			131,420			158,305
Accounts Receivable, Other		1,889			1,889			1,889			1,889
Prepaid Expenses & Other		7,328			7,361			7,494			7,494
Deposits		14			14			14			14
Other Current Assets Held For Sale		—			—			—			—
Total Current Assets		305,880			310,791			329,688			420,652
Gross Fixed Assets		703,518			765,718			847,148			907,298
Accumulated Depreciation		(36,628	)		(76,428	)		(129,102	)		(198,485	)
Net Fixed Assets		666,890			689,290			718,046			708,813
Deferred Drydocking		2,364			2,664			2,976			3,300
Cash Designated for Debt Retirement/Debt Financing		—			—			—			—
Other Assets		28,197			23,435			18,619			13,747
Total Other Assets		30,561			26,099			21,594			17,047
Total Assets	$	1,003,331		$	1,026,179		$	1,069,329		$	1,146,512
Current Liabilities:
Accounts Payable		37,454			51,358			54,720			55,727
Insurance Note Payable		0			0			0			0
Other Accrued Liabilities		60,207			60,957			61,332			61,707
Total Current Liabilities		97,661			112,315			116,052			117,434
Deferred Tax		0			0			0			0
Other Liabilities		12,464			10,681			8,899			7,117
Long-Term Debt		433,436			438,199			443,015			447,887
Common Stock		(125	)		(125	)		(125	)		(125	)
APIC Conversion Feature		589,015			590,305			591,647			593,042
Retained Earnings		(129,120	)		(125,196	)		(90,159	)		(18,842	)
Total Equity		459,770			464,984			501,362			574,075
Total Liabilities & Stockholders’ Equity	$	1,003,331		$	1,026,179		$	1,069,328		$	1,146,512

(1) The projections included in the Cleansing Materials were created by management and used in connection with a strategic review process as, among another things, an aid for potential buyers in evaluating HERO’s future business prospects. Additionally, these projections were provided to certain holders of debt and equity.

(2) The cash balance as of May 26, 2016 was $275.6 million, which does not include the Highlander escrow account. Note: Information contained herein is based on accounting principles generally accepted in the United States and certain non-GAAP financial measures and is not indicative of current fair market values.

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Hercules Offshore, Inc. - Strategic Review Process Projections⁽¹⁾ 5/2/16

$000	2016E			2017E			2018E			2019E
Cash Flow Statement
Cash Flows From Operating Activities:
Net Income		(105,451	)		3,924			35,037			71,317
Depreciation and Amortization		33,036			45,500			58,601			75,548
Stock Based Compensation Expense		1,290			1,290			1,342			1,395
Deferred Income Taxes		32			—			—			—
Amortization of Deferred Financing Fees		—			—			—			—
(Gain)/Loss on Asset Sale		(78	)		—			—			—
Impairment of Property and Equipment		—			—			—			—
(Gain) on early retirement of debt		(1,645	)		—			—			—
Other		4,788			4,762			4,817			4,872
Changes in Working Capital
Accounts Receivable		(25,465	)		(33,919	)		(8,434	)		(26,885	)
Prepaid expenses and other		4,613			(33	)		(133	)		—
Other Operating Assets		203,426			4,762			4,817			4,872
Accounts Payable		(6,162	)		13,904			3,361			1,007
Other current liabilities		(6,694	)		750			375			375
Insurance note payable		—			—			—			—
Other Liabilities		9,182			(1,782	)		(1,782	)		(1,782	)
Cash Flow From Operating Activities		110,872			39,158			98,000			130,718
Cash Flows From Investing Activities:
Marketable Securities		—			—			—			—
Capital Expenditures		(234,410	)		(62,200	)		(81,430	)		(60,150	)
Acquisitions		—			—			—			—
Drydocking Costs		(1,991	)		(6,000	)		(6,240	)		(6,490	)
Proceeds from Asset Sales/Insurance		280			—			—			—
Deposits (Restricted Cash)		2,052			—			—			—
Investments		—			—			—			—
Cash Flow From Investing Activities		(234,069	)		(68,200	)		(87,670	)		(66,640	)
Cash Flows From Financing Activities:
Principal Payments		—			—			—			—
Issuance of Debt		—			—			—			—
Issuance of Equity		—			—			—			—
Financing Costs		—			—			—			—
Cash Designated for Debt Retirement		—			—			—			—
Other		—			—			—			—
Cash Flow From Financing Activities		—			—			—			—
Net Change in Cash		(123,197	)		(29,042	)		10,330			64,078
Beginning Cash Balance		330,780			207,583			178,541			188,871
Ending Cash Balance		207,583			178,541			188,871			252,949

(1) The projections included in the Cleansing Materials were created by management and used in connection with a strategic review process as, among another things, an aid for potential buyers in evaluating HERO’s future business prospects. Additionally, these projections were provided to certain holders of debt and equity. Note: Information contained herein is based on accounting principles generally accepted in the United States and certain non-GAAP financial measures and is not indicative of current fair market values.

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