Hornbeck Offshore CEO and Chairman Todd Hornbeck expressed optimism today during his company’s 2013 earnings call. He noted an increase of $43.7 million in upstream operating income reflecting a 48 percent increase over last year’s figures.
“Overall, the top-line story was strong and consistent marketing conditions for our vessels,” noted Hornbeck. Conditions were particularly solid within their multi-purpose supply vessels (MPSVs), which achieved 100 percent utilization in the fourth quarter prompting the company to order the conversion of one of their 310-class OSVs currently under construction into an MPSV.
Hornbeck notes that this vessel will be outfitted with a 150-ton active heave compensated crane, which they have in stock, and is due to be delivered by the end of this year. Hornbeck notes that this new vessel will feature a helideck, accommodations for 70 and support two work-class ROVs.
This new STX Marine-designed vessel will have slightly less subsea heavy lift capability than the two other MPSVs under construction at Eastern Shipbuilding which both feature 250 ton cranes.
Based on the current vessel delivery schedules, Hornbeck plans to own and operate five, seven, and nine MPSVs as of December 31, 2014, 2015, and 2016, respectively.
The Offshore Market
Besides MPSVs, Hornbeck also notes OSV day rates have improved across the board and now average above $27,0oo per day, a 16 percent year-on-year increase. Their new HOSMAX vessels, they note, are earning in the low-to-mid $40k’s per day.
Looking ahead Hornbeck notes his market view hasn’t changed and is seeing a pickup in demand for his company’s services. At the moment, he notes that there are 41 deepwater drilling units in the Gulf of Mexico (GoM), plus 2 in the yard. By the end of the year, he expects around a dozen rigs will enter the GoM, including a few departures. Within the supply boat market, around 12 vessels will likely leave the GoM, 7 of which will be Hornbeck-owned.
With a possibility of up to 50 floaters in the Gulf of Mexico by the end of 2014, “I’m not seeing a deterioration for drilling,” added Hornbeck.
In the international market, Hornbeck notes increased demand of his company’s vessels. He notes a recently signed contract for a HOS 370 MPSV in the Black Sea, a five-vessel OSV charter contract off Mexico, and a HOS 240-class vessel for use in the Mediterranean in the next quarter. He also mentions that 3 additional charter are likely to be announced in the near term.
Hornbeck adds that his DP-1 equipped vessels will be marketed for international opportunities.
A considerable amount of interest has also been shown toward floating hotels for the upstream sector. The HOS Achiever will be mobilized for use as a flotel and a HOSMAX 300-class will be converted for use as a flotel by the end of this year.
Hornbeck Offshore’s fleet newbuild program currently consists of four 300-class OSVs, five 310-class OSVs, ten 320-class OSVs and five 310-class MPSVs.
Hornbeck notes that production delays from the shipyard has pushed back the projected delivery dates on their HOSMAX OSVs by 45 days each resulting in a loss of company revenue of $3.7 million. The delays were due to insufficient labor resources and shipyard supply chain issues, however “overall, I’m happy with the progress of the newbuilds,” commented Hornbeck. “With 24,000 total construction days in our newbuilding program, this is only a 2 percent increase. The delays are manageable.”