Crying wolf? Oil companies that fought the drilling moratorium will survive

FORTUNE -- The moratorium on deepwater drilling in the Gulf of Mexico in the wake of the Deepwater Horizon oil spill ended back in October of 2010. Since then, the two companies, Ensco and Hornbeck (HOS (HOS)),that sued the government, fearful of the damage the moratorium could do to their businesses, are poised to recover.

All oil companies can technically drill in the Gulf again, after Secretary of the Interior Kenneth Salazar lifted the moratorium, which began in May of 2010, in October. The government just issued its first deepwater drilling permit since the BP (BP) disaster to Noble Energy on February 28. Offshore operators were vocal that the moratorium would hit them hard, but now, nearly a year later, did the moratorium really affect some of its most vocal opponents?

Offshore service companies Ensco and Hornbeck both sued the U.S. government when the moratorium was issued, claiming it was illegal. When the moratorium held, both companies took a financial hit, and both scrambled to survive.

Moratorium tug-of-war

Hornbeck, a company that operates transport vessels in the gulf, sued the government on June 7, after Salazar issued the moratorium on May 28. Judge Martin Feldman, a Louisiana judge for the United States District Court, upheld the lawsuit, claiming that the government's classification of deepwater drillers was arbitrary-it included any operators working below 500 feet.

In response, the government issued a new moratorium on July 12 that applied to any operator who would need the piece of equipment called a blowout preventer, which was one of the pieces of equipment that failed on the exploded Horizon rig, owned by Transocean and operated by BP.

Still not good enough, according to offshore services company Ensco, which sued the government following the second moratorium, claiming the terms were still too wishy-washy.

But the lawsuits didn't re-start the drills. The U.S. government didn't issue a single new permit for deepwater drilling after the BP Macondo spill until February 28, when the Department of the Interior gave Noble Energy a permit to drill off the coast of Louisiana in 6,500 feet of water.

Financial fallout

So the Gulf is back in business. That doesn't necessarily mean that companies in the oil industry will see a flood of deepwater permits, but oil services industry experts do expect a slow rollout.

That should be fine for keeping Ensco and Hornbeck afloat. Certainly both companies have felt the financial squeeze during the drilling ban. Ensco reported a net income of $134.3 million for the fourth quarter of 2010, compared to a net income of $210.2 million during the same period in 2009. Hornbeck reported similarly disappointing financial results. The company's net income for the fourth quarter of 2010 was $2.6 million, down from $9.3 million during the same time last year.

Still, despite their troubles, it's unlikely that either will face irreparable damage.

Hornbeck's balance sheet is strong, says Jeffrey Spittel, an oil services analyst at Madison Williams and Company.

"They could survive this for quite a while," Spittel says, though it will be tough for the company to increase shareholder value with too many idle drills. Still, "it's more of a problem for investors and stock price than it is for the future of the company."

Hornbeck is frustrated, Spittel says, because by all other accounts, it should be raking in money in the Gulf-it's an easy drilling environment and the price of oil has rocketed to about $105 per barrel.

Survival strategies

Instead, Hornbeck has had to shut down operations on many of its ships to tide the company over. Because the Gulf is Hornbeck's bread and butter, it has leveraged its relationships with other operators there to keep strong contracts despite the moratorium.

Ensco has been more mobile. Like Hornbeck, the company shifted many of its ships to non-drilling operations. But it also moved more ships to the coasts of French Guiana and Brazil. The cost of them moving didn't significantly hurt the business either, according to Matt Beeby, the vice president and senior analyst of the energy group for Global Hunter Securities.

Ensco has an advantage in the industry, Beeby says. "These rigs are among the most capable in the global fleet." As a result, he adds, "they've done a very good job of keeping their rigs active," since operators have still wanted to contract their high-quality rigs for non-drilling activity in deepwater.

Soon, Ensco plans to buy oil services company Pride International for $7.3 billion. Pride is well established in Africa and Brazil, and also has a top-notch fleet of deepwater vessels, Beeby says. The merger would make Ensco the second largest offshore drilling company following Transocean.

Even Transocean, one of the companies most directly tied to the spill, escaped lasting damage. Based on the language of the reports that have come out, it looks like there's very little likelihood that Transocean will be legally tied to any of the costs associated with the exploded well, says Thaddeus Vayda, the managing director of oilfield services & equipment equity research for Stifel Nicolaus.

"The reason that drillers have the relationship with their customers that they do is because they are not paid to take risks associated with the well itself," he says. Besides, the language in Transocean's contract with the Deepwater Horizon rig is unusually explicit about how the operator is responsible for the costs of well failure, Vayda says, meaning that while Transocean will probably have to face lawsuits, its involvement with Macondo won't significantly damage its business, or probably even its share price.

So while the Macondo spill left its mark on the players involved, namely BP and Transocean, the firms most responsible for the mess, and the ensuing moratorium hurt many others in the oil industry, drilling is back. Oil prices are high, and demand doesn't seem to be going away. Companies that have made it this far will likely be fine -just as soon as they get the permits to drill.