Gulfmark Offshore Announces Additional Jones Act Newbuilds, and 300% Revenue Increase

Gulfmark Offshore released their Q2 operating results on Monday and at the same time, announced their intention to build two additional Jones Act platform supply vessels (PSVs) for the U.S. Gulf of Mexico.

Bruce Streeter, Gulfmark’s President and CEO, commented, “As we previously announced, we sold two U.S. flagged aluminum boats during the quarter for a gain of $3.7 million, and today we are announcing the planned sale of another 165 foot aluminum-hulled, U.S. flagged crew boat. We intend to continue to expand our U.S. flag construction program, and today we are announcing the construction of two additional Jones Act PSVs for the U.S. Gulf of Mexico. This will bring the total number of vessels under construction to 11, with seven vessels destined for the North Sea and international markets and four destined for the U.S. Gulf of Mexico.

The two PSVs will be built at BAE Systems with a total estimated cost of $96.0 million. These new ships will be of the newly designed 300 Class, and are 286-foot DP2 multi-service PSV’s. Delivery of the vessels will be in the fourth quarter of 2014 and the first quarter of 2015.

Mr. Streeter continues, “As indicated last quarter we plan on evaluating and investing in areas with high growth potential, and our latest capital commitments and fleet changes are consistent with our strategy to continue to high-grade our fleet in the U.S. Gulf of Mexico, where we forecast a strong deepwater market over the next several years.”

sea cheyenne gulfmark — Sea Cheyenne, one of Gulfmark’s 140-tonne bollard pull AHTS’, image: Keppel O&M

Financial Overview

Operating income increased by nearly $19 million which was an increase of approximately 300% over the prior quarter. Revenue also jumped 20% from the prior quarter and 8% from the second quarter of 2011. Direct operating expenses were on the high side of guidance, but in line with the higher operating tempo in the quarter.

Improvement occurred in all regions.

Drydocks and project-related expenses, although slightly lower than projected, were still above what we expect on a long-term basis. We expect that what we are doing this year will have a larger benefit in 2013 and beyond, and we continue to believe that revenue for 2012 will be stronger than 2011.

We continue to evaluate opportunities and have added to our new construction program while maintaining our strong balance sheet. We are positive on the near term and we have very high expectations for the future.