SUMMARY

Important information and risks regarding the merger: This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the merger and the other proposals being considered at the Hercules Meeting and TODCO Meeting, you should read this entire joint proxy statement/prospectus carefully, including the Risk Factors beginning on page 30 and the merger agreement, attached as Annex A. In addition, you are encouraged to read the information incorporated by reference into this joint proxy statement/prospectus, which includes important business and financial information and risks about Hercules and TODCO.

The Companies

Hercules Offshore, Inc. Hercules Offshore, Inc. provides drilling and liftboat services to the oil and natural gas exploration and production industry in the U.S. Gulf of Mexico and internationally. Hercules currently operates a fleet of nine jackup rigs and a fleet of 64 liftboats. Hercules provides these services to major integrated energy companies and independent oil and natural gas operators. Currently, six of Hercules’ jackup rigs are located in the U.S. Gulf of Mexico and the remaining two rigs are located in Qatar and India, respectively. Hercules owns an additional jackup rig that is currently undergoing upgrade and refurbishment and is being marketed for operations in international locations. Hercules owns 47 liftboats located in the U.S. Gulf of Mexico and 12 liftboats located in West Africa. In addition, Hercules operates five liftboats in West Africa which are owned by a third party.

Hercules common stock is traded on NASDAQ under the symbol “HERO.” Hercules’ principal executive offices are located at 11 Greenway Plaza, Suite 2950, Houston, Texas 77046, and its telephone number is (713) 979-9300.

TODCO. TODCO is a leading provider of contract oil and gas drilling services, primarily in the U.S. Gulf of Mexico and inland marine region, an area that TODCO refers to as the U.S. Gulf Coast. TODCO’s core business is to contract its drilling rigs, related equipment and work crews on a dayrate basis to customers who are drilling oil and gas wells. TODCO provides these services primarily to independent oil and gas companies, but also services major international and government-controlled oil and gas companies.

TODCO operates a fleet of 64 drilling rigs consisting of 27 inland barge rigs, 24 jackup rigs, three submersible rigs, one platform rig, and nine land rigs. Currently, 50 of these rigs are located in the United States with the remainder in Angola, Brazil, Mexico, Trinidad, Venezuela and other international locations. TODCO also operates through its wholly-owned subsidiary, Delta Towing LLC (“Delta Towing”), a fleet of U.S. marine support vessels consisting of 42 inland tugs, 19 offshore tugs, 36 crewboats and 55 barges along the U.S. Gulf Coast and in the U.S. Gulf of Mexico.

TODCO common stock is traded on the NYSE under the symbol “THE.” TODCO’s principal executive offices are located at 2000 W. Sam Houston Parkway, Suite 800, Houston, Texas 77042-3615, and its telephone number is (713) 278-6000.

Merger Sub. Merger Sub is a direct, wholly-owned subsidiary of Hercules and is formed as a limited liability company under the laws of the State of Delaware. Merger Sub was formed on March 16, 2007 solely for the purpose of effecting the merger. Merger Sub has not conducted any business operations other than activities incidental to its formation and in connection with the transactions contemplated by the merger agreement.

The principal executive offices of Merger Sub are located at 11 Greenway Plaza, Suite 2950, Houston, Texas 77046, and its telephone number is (713) 979-9300.

The Merger (see page 49)

Hercules and TODCO have agreed to combine their businesses pursuant to the merger agreement described in this joint proxy statement/prospectus, subject to stockholder approvals and other conditions. Under the terms of the merger agreement, TODCO will merge with and into Merger Sub, with Merger Sub surviving the merger as a direct, wholly-owned subsidiary of Hercules. The merger agreement is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference herein. Hercules and TODCO encourage you to read the merger agreement in its entirety because it is the legal document that governs the merger.

Risk Factors (see page 30)

There are risks associated with the merger and the operations of Hercules after the merger. These risks are more fully described in “Risk Factors,” beginning on page 30.

Risk Factors Relating to the Merger

Among the risk factors relating to the merger are the following:

Risk Factors Relating to Hercules Following the Merger

Among the risk factors relating to Hercules after the merger are the following:

Merger Consideration (see page 89)

At the effective time of the merger, the outstanding shares of TODCO common stock, on a per-share basis, will be converted into the right to receive merger consideration equal in value to $16.00 per share plus the product of (1) 0.979 times (2) the average closing price of Hercules common stock during a ten consecutive trading day valuation period ending on the fifth calendar day immediately prior to the effective time of the merger, or if the fifth calendar day is not a trading day, then ending on the immediately preceding trading day.

Election Procedures (see pages 93 and 94)

TODCO stockholders may elect to receive cash or shares of Hercules common stock as their merger consideration. TODCO stockholders desiring to receive a combination of cash and Hercules common stock may do so by making a cash election with respect to a portion of their shares and a stock election with respect to their remaining shares. The merger agreement contains provisions designed to provide substantially equivalent value for the consideration to be received for each share of TODCO common stock, at the time the calculation is made, regardless of whether a TODCO stockholder elects to receive cash, shares of Hercules common stock or a combination of cash and shares of Hercules common stock.

Because Hercules is delivering a fixed number of shares of Hercules common stock and paying a fixed amount of cash (subject to upward adjustment for any shares of TODCO common stock issued upon exercise of outstanding TODCO stock options or otherwise), TODCO stockholders cannot be certain of receiving the type of merger consideration that they elect. If the elections result in an oversubscription of the pool of cash or shares of Hercules common stock, certain proration procedures will be followed by the exchange agent to allocate cash and shares of Hercules common stock among TODCO stockholders. See “The Merger Agreement—Election Procedures,” and “—Proration,” beginning on pages 93 and 94, respectively.

Completion and Delivery of the Election Form (see page 94)

Election form: In a separate mailing, TODCO stockholders will receive an election form with instructions for making cash and Hercules common stock elections. TODCO stockholders should properly complete and deliver to the exchange agent their election form along with their stock certificates (or a properly completed notice of guaranteed delivery in lieu of the stock certificates or, in the case of shares of TODCO common stock held in book entry form, any additional documents specified in the election form). TODCO stockholders should not send their stock certificates or election form with their proxy card.

Election deadline: Election forms and stock certificates (or a properly completed notice of guaranteed delivery in lieu of the stock certificates or, in the case of shares of TODCO common stock held in book entry form, any additional documents specified in the election form) must be received by the exchange agent by the election deadline, which is 5:00 p.m., New York City time, on July 5, 2007. Once TODCO stockholders tender their stock certificates to the exchange agent, they may not transfer their shares of TODCO common stock until the merger is completed, unless they revoke their election by written notice to the exchange agent that is received prior to the election deadline.

TODCO stockholders who do not make an election: If any TODCO stockholder fails to submit a properly completed election form, together with stock certificates (or a properly completed notice of guaranteed delivery), prior to the election deadline of July 5, 2007, that stockholder will be deemed not to have made an election. TODCO stockholders making no election may be paid in all cash, all shares of Hercules common stock, or part cash and part shares of Hercules common stock, depending on whether the elections made by other TODCO stockholders result in an oversubscription of the fixed amount of cash or fixed number of shares of Hercules common stock.

Election through broker or nominee: If TODCO stockholders own shares of TODCO common stock in “street name” through a broker or other nominee and wish to make an election, they should follow instructions from the broker or other nominee holding their shares of TODCO common stock concerning how to make their election.

If the merger agreement is not adopted by TODCO stockholders, or the issuance of additional shares of Hercules common stock is not approved by Hercules stockholders, stock certificates will be returned by the exchange agent by first class mail or through book-entry transfer (in the case of shares of TODCO common stock delivered in book-entry form to the exchange agent).

Treatment of TODCO Stock Options and Other Equity Awards (see page 95)

The treatment of stock options, restricted shares, deferred stock units and deferred performance awards outstanding under the TODCO stock plans is discussed under the heading “The Merger Agreement—Treatment of TODCO Stock Options and Other Equity Awards,” beginning on page 95.

Recommendation of the Hercules Board of Directors (see page 54)

The Hercules board of directors has determined unanimously that the merger agreement is advisable and the transactions contemplated by the merger agreement, including the issuance of additional shares of Hercules common stock in the merger, are in the best interests of the Hercules stockholders, and has unanimously approved the merger agreement and the transactions contemplated by the merger agreement. The Hercules board of directors unanimously recommends that Hercules stockholders vote FOR the proposal to approve the issuance of additional shares of Hercules common stock in the merger.

The Hercules board of directors unanimously recommends that Hercules stockholders vote, FOR the election of the three Class II director nominees, FOR the approval of the amended and restated Hercules Offshore 2004 Long-Term Incentive Plan and FOR the adjournment of the Hercules Meeting, if necessary or appropriate, to solicit additional proxies.

Recommendation of the TODCO Board of Directors (see page 57)

The TODCO board of directors has determined unanimously that the merger agreement is advisable and the transactions contemplated by the merger agreement are in the best interests of the TODCO stockholders, and has unanimously adopted and approved the merger agreement, the merger, and the transactions contemplated by the merger agreement. The TODCO board of directors unanimously recommends that TODCO stockholders vote FOR the proposal to approve and adopt the merger agreement and FOR the adjournment of the TODCO Meeting, if necessary or appropriate, to solicit additional proxies.

Stockholders Entitled to Vote; Vote Required for Approval (see pages 41 and 45)

Hercules

Record date: Hercules stockholders can vote at the Hercules Meeting if they owned shares of Hercules common stock at the close of business on May 30, 2007, which is referred to as the Hercules record date. On the Hercules

record date, there were 32,331,434 shares of Hercules common stock outstanding and entitled to vote at the Hercules Meeting, held by approximately 84 stockholders of record. Hercules stockholders may cast one vote for each share of Hercules common stock that they owned on the Hercules record date.

Vote required: The affirmative vote of the holders of a majority of the votes cast by Hercules stockholders entitled to vote at the Hercules Meeting, at which a quorum is present, is required to approve the issuance of additional shares of Hercules common stock pursuant to the merger agreement, to approve the amended and restated Hercules Offshore 2004 Long-Term Incentive Plan and to approve the adjournment of the Hercules Meeting, if necessary or appropriate, to solicit additional proxies. For the election of Directors (Hercules Proposal No. 2), the three nominees receiving the most votes in favor from the shares having the voting power present in person or represented by proxy will be elected. Abstentions and broker non-votes will not be counted either in favor of or against approval of the proposals at the Hercules Meeting.

Quorum required: For purposes of conducting the Hercules Meeting, the holders of at least a majority of the shares of Hercules common stock issued and outstanding and entitled to vote at the Hercules Meeting will constitute a quorum. Abstentions and broker non-votes will be counted in determining whether a quorum is present at the Hercules Meeting.

Your vote is very important. You are encouraged to vote as soon as possible. If you do not indicate how your shares of Hercules common stock should be voted, the shares of Hercules common stock represented by your properly completed proxy will be voted as the Hercules board of directors recommends and therefore FOR the issuance of additional shares of Hercules common stock in the merger, FOR the approval of the amended and restated Hercules Offshore 2004 Long-Term Incentive Plan and FOR the adjournment of the Hercules Meeting, if necessary or appropriate, to solicit additional proxies.

TODCO

Record date: TODCO stockholders can vote at the TODCO Meeting if they owned shares of TODCO common stock at the close of business on May 30, 2007, which is referred to as the TODCO record date. On the TODCO record date, there were 57,766,193 shares of TODCO common stock outstanding and entitled to vote at the TODCO Meeting, held by approximately 294 stockholders of record. TODCO stockholders may cast one vote for each share of TODCO common stock that they owned on the TODCO record date.

Vote required: A majority of the outstanding shares of TODCO common stock entitled to vote must be cast in favor of the approval and adoption of the merger agreement for it to be approved. Therefore, your failure to vote, your failure to instruct your broker to vote your shares, or your abstaining from voting will have the same effect as a vote against the merger. The adjournment of the TODCO Meeting, if necessary or appropriate, to solicit additional proxies is determined by a majority of the votes cast, without regard to broker non-votes or abstentions.

Quorum required: For purposes of conducting the TODCO Meeting, the holders of at least a majority of the shares of TODCO common stock issued and outstanding and entitled to vote at the TODCO Meeting will constitute a quorum. Abstentions and broker non-votes will be counted in determining whether a quorum is present at the TODCO Meeting.

Your vote is very important. You are encouraged to vote as soon as possible. If you do not indicate how your shares of TODCO common stock should be voted, the shares of TODCO common stock represented by your properly completed proxy will be voted as the TODCO board of directors recommends and therefore FOR the adoption of the merger agreement and FOR the adjournment of the TODCO Meeting, if necessary or appropriate, to solicit additional proxies.

Opinions of Financial Advisers (see pages 60 and 66)

Opinion of Hercules’ Financial Adviser

In connection with the merger, Hercules’ financial adviser, Simmons & Company International, which is referred to as Simmons & Company, delivered a written opinion dated March 18, 2007 to the Hercules board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the Hercules stockholders of the consideration to be paid by Hercules in the merger.

The full text of Simmons & Company’s written opinion, dated March 18, 2007 is attached to this joint proxy statement/prospectus as Annex B. Holders of Hercules common stock are encouraged to read the opinion carefully in its entirety for a description of the procedures followed, assumptions made, matters considered and limitations on the scope of the review undertaken. Simmons & Company’s opinion was provided to the Hercules board of directors in connection with its evaluation of the consideration to be paid by Hercules in the merger, does not address any other aspect of the proposed merger and does not constitute a recommendation to any holder of shares of Hercules common stock as to how the stockholder should vote or act on any matter relating to the merger.

Opinion of TODCO’s Financial Adviser

TODCO engaged Citigroup Global Markets Inc., which is referred to as Citi, to act as TODCO’s financial adviser in connection with the proposed merger. On March 18, 2007, Citi rendered its opinion as to the fairness, from a financial point of view, as of that date and based upon and subject to certain matters stated in the opinion letter, of the consideration to be offered in the merger to TODCO stockholders.

The full text of the written opinion of Citi, dated March 18, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/prospectus as Annex C, and you are encouraged to read the opinion in its entirety. Citi’s opinion was provided for the information and assistance of the TODCO board of directors in connection with its consideration of the merger, and the opinion does not constitute a recommendation as to how any holder of shares of TODCO common stock should vote or make any election with respect to the merger.

Directors and Executive Officers of Hercules After the Merger

The following individuals are expected to be the members of the Hercules board of directors following the merger:

Class II Directors with term expiring in 2010

Class I Directors with term expiring in 2009

Class III Directors with term expiring in 2008

For more information on these individuals see “Directors and Executive Officers of Hercules After the Merger,” beginning on page 119 and “Proposals Being Submitted to a Vote of Hercules Stockholders at the Hercules Meeting—Hercules Proposal No. 2: Election of Directors—Board of Directors,” beginning on page 121.

The following individuals are expected to be the executive officers of Hercules following the merger:

All of the executive officers listed above are currently executive officers of Hercules, except for Mr. Crowley, who is an executive officer of TODCO. Additionally, certain other executive officers of TODCO may become non-executive officers of Hercules following the merger.

Ownership of Hercules After the Merger

Based on the number of shares of TODCO common stock outstanding on March 18, 2007, Hercules would issue approximately 56.6 million shares of Hercules common stock in the merger, representing approximately 64% of the outstanding shares of Hercules common stock if issued as of the same date on a diluted basis. Those amounts will be adjusted upwards depending on the actual number of shares of TODCO common stock outstanding at the effective time of the merger, which will increase if TODCO issues any shares in accordance with the terms of the merger agreement, such as the exercise of options to purchase TODCO common stock. Consequently, Hercules stockholders, as a general matter, will have less influence over the management and policies of Hercules than they currently exercise over the management and policies of Hercules.

Share Ownership of Directors and Officers of Hercules

As of the record date, the directors and officers of Hercules and their affiliates beneficially owned and were entitled to vote approximately 2,780,486 shares of Hercules common stock, collectively representing approximately 8.6% of the shares of Hercules common stock outstanding and entitled to vote on that date.

Share Ownership of Directors and Officers of TODCO

As of the record date, the directors and officers of TODCO and their affiliates beneficially owned and were entitled to vote approximately 581,819 shares of TODCO common stock, collectively representing approximately 1.0% of the shares of TODCO common stock outstanding and entitled to vote on that date.

Interests of Executive Officers of Hercules in the Merger (see page 76)

The Hercules board of directors has authorized salary increases for three of its executive officers contingent upon completion of the merger. Under the terms of the merger agreement, certain executive officers of Hercules are expected to deliver waivers of the change of control provisions of their respective employment agreements and equity awards that would otherwise be triggered by the merger.

Interests of Directors and Executive Officers of TODCO in the Merger (see page 76)

In considering the recommendation of the TODCO board of directors with respect to the merger agreement, TODCO stockholders should be aware that certain members of the TODCO board of directors and certain of TODCO’s executive officers have interests in the transactions contemplated by the merger agreement that may be different from, or in addition to, the interests of TODCO stockholders generally. These interests may include, among other things, the following:

The TODCO board of directors was aware of these interests and considered them, among other matters, in making its recommendation. See “The Merger—Recommendation of the TODCO Board of Directors and Its Reasons for the Merger,” beginning on page 57.

Voting Agreements and Lock-up Agreements (see page 79)

TODCO: Under the terms of the merger agreement, each executive officer of TODCO is expected to execute and deliver to Hercules an agreement that each executive officer will vote any and all shares of TODCO common stock owned by him at the TODCO meeting in favor of the merger. Each executive officer of TODCO who will be employed by Hercules after the merger is expected to execute and deliver to Hercules a “lock-up” agreement under which the executive officer agrees not to sell shares of Hercules common stock for 90 days from and including the date the merger becomes effective.

Hercules: Under the terms of the merger agreement, LR Hercules Holdings, LP and each executive officer of Hercules are expected to execute and deliver to TODCO an agreement that LR Hercules Holdings, LP and each executive officer of Hercules will vote any and all shares of Hercules common stock owned by him, her or it at the Hercules meeting to approve the issuance of shares in the merger. LR Hercules Holdings, LP and the Chief Executive Officer and President of Hercules are expected to execute and deliver to TODCO a lock-up agreement under which each agrees not to sell shares of Hercules common stock for 90 days from and including the date the merger becomes effective.

Listing of Shares of Hercules Common Stock; Delisting and Deregistration of Shares of TODCO Common Stock (see page 81)

Hercules will use its reasonable best efforts to cause the shares of Hercules common stock to be issued in the merger pursuant to the merger agreement to be approved for listing on NASDAQ, subject to official notice of issuance, at the effective time of the merger. Approval of the listing on NASDAQ of the shares of Hercules common stock to be issued in the merger pursuant to the merger agreement is a condition to each party’s obligation to complete the merger. If the merger is completed, shares of TODCO common stock will be delisted from the NYSE and deregistered under the Exchange Act.

Appraisal Rights in the Merger (see page 109)

Under the terms of the merger agreement, including the equalization and proration provisions, if any TODCO stockholders who elect to receive stock are required to accept cash (other than cash in lieu of fractional shares of Hercules common stock) in the merger in exchange for their stock election shares, appraisal rights will be available to all TODCO stockholders. It is not clear, however, whether appraisal rights will be available under Delaware law if no TODCO stockholders who elect stock are in fact required to accept cash (other than cash in lieu of fractional shares of Hercules common stock) in the merger in exchange for their stock election shares. TODCO stockholders who wish to seek appraisal of their shares are in any case urged to seek the advice of counsel with respect to the availability of appraisal rights.

If appraisal rights are available, the shares of TODCO common stock outstanding immediately prior to the effective time of the merger and held by a holder who has not voted in favor of the adoption of the merger agreement and who has delivered a written demand for appraisal of his or her shares in accordance with Section 262 of the DGCL, will not be converted into the right to receive the merger consideration, but the holder will be entitled to seek an appraisal of his or her shares under the DGCL unless and until the dissenting holder fails to perfect or withdraws or otherwise loses his or her right to appraisal and payment under the DGCL. If, after the effective time of the merger, a dissenting stockholder fails to perfect or withdraws or loses his or her right to appraisal, his or her shares of TODCO common stock will be treated as if they had been converted as of the effective time of the merger into the right to receive the merger consideration into which “no election shares” have been converted, subject to the right of Hercules to treat the shares as cash election shares and to pay only cash for the shares, without interest or dividends thereon. The full text of Section 262 of the DGCL is attached to this joint proxy statement/prospectus as Annex D.

Conditions to the Completion of the Merger (see page 98)

A number of conditions must be satisfied or waived, where legally permissible, before the proposed merger can be consummated. These include, among others:

Neither Hercules nor TODCO can assure you when or if all or any of the conditions to the merger will be either satisfied or waived or whether the merger will occur as intended.

Regulatory Approvals Required for the Merger (see page 79)

Although the merger was subject to review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the applicable statutory waiting period under the Act was terminated on May 29, 2007.

No Solicitation (see page 104)

Under the merger agreement, neither Hercules nor TODCO is permitted to solicit, initiate, encourage or facilitate the making of any inquiries regarding any other acquisition proposal.

However, before receipt of the requisite approval by their respective stockholders, Hercules or TODCO may engage in negotiations with a third party making an unsolicited, written acquisition proposal, provided that:

In addition, before receipt of the requisite approval by its stockholders, respectively, the board of directors of either Hercules or TODCO may withdraw its recommendation or declaration of advisability of the merger agreement if the board of directors determines in good faith that a failure to change its recommendation would reasonably be expected to be inconsistent with its fiduciary duties to Hercules stockholders or TODCO stockholders, respectively, subject to payment of the termination fees set forth in the merger agreement.

Termination of the Merger Agreement (see page 105)

The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger by mutual written consent of Hercules and TODCO. Either party (except as otherwise indicated) will also have the right to terminate the merger agreement upon the occurrence of any of the following:

See “The Merger Agreement—Termination of the Merger Agreement and Termination Fees,” beginning on page 105.

Termination Fees and Expenses (see page 107)

Under the merger agreement, Hercules may be required to pay to TODCO a termination fee of $30 million if the merger agreement is terminated under specified circumstances, and TODCO may be required to pay Hercules a termination fee of $70 million if the merger agreement is terminated under specified circumstances. In addition, Hercules or TODCO may be required to pay the other party an expense reimbursement fee of $5 million if the merger agreement is terminated under specified circumstances. See “The Merger Agreement—Termination of the Merger Agreement and Termination Fees—Termination Fees and Expenses,” beginning on page 107.

Material U.S. Federal Income Tax Consequences of the Merger (see page 83)

The merger is intended to qualify as a reorganization under Section 368(a) of the Internal Revenue Code for U.S. federal income tax purposes. The U.S. federal income tax consequences of a reorganization to an exchanging TODCO stockholder will depend on whether the TODCO stockholder receives only shares of Hercules common stock, only cash, or a combination of shares of Hercules common stock and cash in exchange for its shares of TODCO common stock.

Please refer to “Material U.S. Federal Income Tax Consequences,” beginning on page 83 of this joint proxy statement/prospectus for a description of the material U.S. federal income tax consequences of the merger. Determining the actual tax consequences of the merger to you may be complex and will depend on your specific situation. You are urged to consult your tax adviser for a full understanding of the tax consequences of the merger to you.

Tax Sharing Agreement (see page 80)

Following the merger, Hercules will be bound by the amended and restated tax sharing agreement between TODCO and Transocean, TODCO’s former parent prior to its initial public offering, that is described in TODCO’s Form 10-K, as amended, for the year ended December 31, 2006, which is incorporated herein by reference. Under the tax sharing agreement, Hercules will be required to make significant payments to Transocean upon completion of the merger and may be required to make significant payments following the merger.

Accounting Treatment (see page 81)

Hercules prepares its financial statements in accordance with accounting principles generally accepted in the United States of America, which is referred to as GAAP. The merger will be accounted for using the purchase

method of accounting. As discussed under “The Merger—Accounting Treatment,” on page 81, based upon the terms of the merger and other factors, such as the composition of the combined company’s board of directors and senior management, Hercules is considered to be the acquirer of TODCO for accounting purposes. Therefore, Hercules will allocate the purchase price to the fair value of TODCO’s assets and liabilities at the acquisition date, with the excess purchase price being recorded as goodwill. Under the purchase method of accounting, goodwill is not amortized but is tested for impairment at least annually.

Payment of Dividends (see page 114)

Hercules: Hercules has not paid any cash dividends on its common stock since becoming a publicly held corporation in October 2005, and does not intend to declare or pay regular dividends on its common stock in the foreseeable future. Instead, Hercules generally intends to invest any future earnings in Hercules’ business. Subject to Delaware law, the Hercules board of directors will determine the payment of future dividends on Hercules common stock, if any, and the amount of any dividends in light of any applicable contractual restrictions limiting Hercules’ ability to pay dividends, Hercules’ earnings and cash flows, Hercules’ capital requirements, Hercules’ financial condition, and other factors the Hercules board of directors deems relevant. Hercules’ senior secured credit agreement restricts, and the new facility expected to be entered into in connection with the merger will also restrict, Hercules’ ability to pay dividends or other distributions on its equity securities.

TODCO: Other than the special cash dividend of $1.00 per share of TODCO common stock paid in August 2005, no other cash dividends have been paid on shares of TODCO common stock. The merger agreement generally provides that TODCO may not declare, set aside or pay any dividend prior to the effective time of the merger or the termination of the merger agreement.

Financing of the Merger (see page 113)

In order to finance some or all of the cash portion of the merger consideration, Hercules expects to incur incremental indebtedness of up to $1.1 billion. In order to fund such amount, Hercules intends to enter into a new syndicated secured term loan facility of up to $1.1 billion and a $150 million revolving credit facility to be arranged by UBS Securities LLC. Under the Bank Facilities Commitment Letter between Hercules and UBS dated March 18, 2007 (as amended to include Amegy Bank National Association, Comerica Bank, Credit Suisse, Deutsche Bank AG, Jefferies Finance LLC and JP Morgan Chase Bank, N.A.) and subject to the conditions set forth therein, Hercules, UBS and the other lenders expect to enter into the facility upon the closing of the merger transaction, so long as it occurs prior to October 31, 2007. Hercules expects to use the proceeds of the facility to also repay in full and terminate Hercules’ existing senior secured term loan facility and refinance TODCO’s revolving credit facility. If the merger is not consummated, Hercules will not enter into the facility and its existing facility will not be terminated. Hercules’ obligation to complete the merger is not conditioned upon Hercules obtaining financing.

Comparison of Rights of Hercules and TODCO Stockholders (see page 116)

Both Hercules and TODCO are incorporated under the laws of the State of Delaware and, accordingly, the rights of the stockholders of each are currently, and will continue to be, governed by the DGCL. If the merger is completed, TODCO stockholders will become stockholders of Hercules, and their rights will be governed by the DGCL, the certificate of incorporation of Hercules and the bylaws of Hercules. The rights of Hercules stockholders contained in the certificate of incorporation and bylaws of Hercules differ from the rights of TODCO stockholders under the certificate of incorporation and bylaws of TODCO, as more fully described under the section entitled “Comparison of Rights of Hercules and TODCO Stockholders,” beginning on page 116 of this joint proxy statement/prospectus.

Other Matters to be Considered at the Hercules Meeting

Hercules has determined to combine its special meeting and annual meeting of stockholders to reduce proxy statement and meeting costs and to reduce the burden on Hercules stockholders of otherwise having to vote in two meetings. Hercules stockholders are being asked to consider and vote on the following four proposals in addition to the issuance of shares of Hercules common stock in the proposed merger:

See “Proposals Being Submitted to a Vote of Hercules Stockholders at the Hercules Meeting,” beginning on page 121.

SUMMARY HISTORICAL FINANCIAL AND OPERATING INFORMATION OF HERCULES

The following table shows selected summary historical consolidated financial data for Hercules as of December 31, 2006, 2005 and 2004, for the years ended December 31, 2006 and 2005 and for the period from July 27, 2004 (inception) to December 31, 2004. The selected summary historical consolidated financial data for each of the periods presented is derived from Hercules’ audited financial statements that are not included herein. The selected historical consolidated financial data as of March 31, 2007 and for the three months ended March 31, 2007 and 2006 is derived from Hercules’ unaudited consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for these periods. Operating results for the three months ended March 31, 2007 and 2006 are not necessarily indicative of the results that may be expected for the full year.

You should read the following data in connection with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements set forth in Hercules’ Quarterly Report on Form 10-Q for the period ended March 31, 2007, and Annual Report on Form 10-K, as amended, for the year ended December 31, 2006, where there is additional disclosure regarding the information in the following table. See also the pro forma information set forth elsewhere in this prospectus regarding the proposed merger with TODCO. Hercules’ historical results are not necessarily indicative of results to be expected in future periods.

SUMMARY HISTORICAL FINANCIAL AND OPERATING INFORMATION OF TODCO

The following table shows TODCO’s summary historical consolidated financial data as of and for each of the five years ended December 31, 2006. The summary historical consolidated financial data for each of the five years ended December 31, 2006 are derived from TODCO’s audited financial statements that are not included herein. The selected historical consolidated financial data as of March 31, 2007 and for the three months ended March 31, 2007 and 2006 is derived from TODCO’s unaudited consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for these periods. Operating results for the three months ended March 31, 2007 and 2006 are not necessarily indicative of the results that may be expected for the full year.

You should read the following data in connection with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements set forth in TODCO’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, and Annual Report on Form 10-K, as amended, for the year ended December 31, 2006, where there is additional disclosure regarding the information in the following table. See also the pro forma information set forth elsewhere in this prospectus regarding the proposed merger with Hercules. TODCO’s historical results are not necessarily indicative of results to be expected in future periods.

SUMMARY UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

The merger will be accounted for under the purchase method of accounting, which means the assets and liabilities of TODCO will be recorded, as of completion of the merger, at their respective fair values and added to those of Hercules. For a more detailed description of purchase accounting see “The Merger—Accounting Treatment,” beginning on page 81.

The summary unaudited pro forma condensed combined financial information presented below reflects the purchase method of accounting and is for illustrative purposes only. The summary unaudited pro forma condensed combined information may have been different had the companies actually combined. The summary unaudited pro forma condensed combined financial information does not reflect the effect of asset dispositions, if any, or revenue, cost or other operating synergies that may result from the merger, nor does it reflect the effects of any financing, liquidity or other balance sheet repositioning that may be undertaken (except for the financing directly related to the merger) in connection with or subsequent to the merger. You should not rely on the summary unaudited pro forma condensed combined financial information as being indicative of the historical results that would have occurred had the companies been combined or the future results that may be achieved after the merger. The following summary pro forma unaudited condensed combined financial information has been derived from, and should be read in conjunction with the “Unaudited Pro Forma Condensed Combined Financial Statements,” and related notes beginning on page F-1.

UNAUDITED COMPARATIVE PER SHARE DATA

We present below per common share data regarding the income and book value of Hercules and TODCO on both historical and unaudited pro forma condensed bases and on a per share equivalent unaudited pro forma condensed combined basis for TODCO. We have derived the unaudited pro forma condensed combined per share information from the unaudited pro forma condensed combined financial statements presented elsewhere in this document. You should read the information below in conjunction with the financial statements and accompanying notes of Hercules and TODCO that are incorporated by reference into this document and with the unaudited pro forma condensed combined information included under the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements,” beginning on page F-1.

COMPARATIVE HERCULES AND TODCO

MARKET PRICE DATA AND DIVIDEND INFORMATION

Hercules common stock is listed on NASDAQ under the symbol “HERO.” TODCO common stock is listed on the NYSE under the symbol “THE.” The following table presents closing prices for shares of Hercules common stock and TODCO common stock on March 16, 2007, the last trading day before the public announcement of the execution of the merger agreement by Hercules and TODCO, and May 30, 2007, the latest practicable trading day before the date of this joint proxy statement/prospectus.

The following table also shows the merger consideration equivalent proposed for each share of TODCO common stock, on a fully-diluted basis. These illustrative values are calculated by first multiplying the closing price of Hercules common stock on those dates by 0.979, which is the total Hercules common stock consideration in the merger per share of TODCO common stock. To this, we added $16.00 per share, which is the total cash consideration in the merger per share of TODCO common stock.

Because the total stock consideration in the merger is fixed at 0.979 per share of TODCO common stock, the value of the total merger consideration to be received by TODCO stockholders will fluctuate based on the market price of Hercules common stock. We urge you to obtain the market prices for Hercules common stock and TODCO common stock before you vote. TODCO stockholders may elect to receive cash, Hercules common stock or a combination of both in the merger. However, the merger agreement contains provisions designed to cause value per share received by TODCO stockholders to be substantially equivalent. See “The Merger Agreement—Merger Consideration,” beginning on page 89.

See “Comparative Market Prices and Dividends,” beginning on page 114 for additional market price information.