My understanding from the executive of Tuscany is that they never received any prior notice of problems either operational or safety concerns. Only a request for a component for one of the rigs that was not even in the contract but even at that, Tuscany indicated that they would look at the cost of purchasing it and send it a long as "an extra one"

Of course HRT is not happy, they have to put on a sad face to support their blatantly immoral deed of defaulting on a four year contract for two very specialized, extremely costly ($25 million EACH) very early on in the agreement because their initial drilling results were dry as a bone. Did they replace them and keep drilling.....not likely.

HRT is poorly managed and appears to have a very poor culture and low ethics.

If and when the company gets the credit restructured with a $200 million debenture and a $75 million revolver, the annual interest payment will be ~$20 million as opposed to the $52 million interest and principal payment under their current arrangement. That will alow them to show significant net profit after tax as well as EBITDA and cash flow. They would not have to worry about principal for 5 years and can work on paying off their revolver in the mean time and building a nice cash balance as well as grow the rig count by 10 to 20 rigs depending on the market conditions. They will also be able to "grow into the debt level" by increasing revenues and EBITDA over the next five years.

They have also received an offer for the $50 million heli-rigs but was too low to act on. There are not a lot of these type of rigs avaliable in the world and if they continue to market them actively, someone somewhere will have a need for them and give them a more acceptable offer. Or, one of the South American E&Ps may want to do some elephant hunting in their more remote exploration blocks.

Stay tuned...