Join our crew and become one of the 109,235 members that receive our newsletter.

Hornbeck Offshore to Sell Downstream Tug and Tank Barge Fleet

Hornbeck Offshore to Sell Downstream Tug and Tank Barge Fleet

gCaptain
Total Views: 146
July 22, 2013

HOS’s Erie Service. Photo courtesy Hornbeck Offshore Services

Louisiana-based Hornbeck Offshore Services (NYSE: HOS) announced Monday that it has entered into an agreement to sell the company’s downstream segment fleet of tugs and tank barges to Genesis Marine, LLC, an affiliate of Genesis Energy L.P. (NYSE:GEL), for a total consideration of $230 million.

Hornbeck says that the proceeds of the transaction, including a $23 million deposit from Genesis, will be used for general corporate purposes, which may include for the acquisition, construction or retrofit of vessels.

The vessels included in the deal are Hornbeck’s active fleet of nine ocean-going tugs and nine double-hulled tank barges, which transport crude oil and refined petroleum products, principally serving refineries and storage terminals along the Gulf Coast, Eastern Seaboard, Great Lakes and Caribbean.

“Given the substantial pending growth in our Upstream fleet over the next few years as a result of previously announced newbuild and retrofit programs and any incremental organic or acquisitive growth that may arise, we believe that the timing is right to divest of our non-core Downstream segment in order to strategically focus our energies on our Upstream core business,” said Chairman and CEO Todd M. Hornbeck.

“Due to the recent recovery in Downstream market conditions since the financial collapse of 2008, we were able to monetize our active TTB fleet at what we believe to be a very fair price – above our original investment in these assets – and believe that the redeployment of that capital in our Upstream business will unlock value for our shareholders. Our ability to enter into this agreement is a testament to the excellent operational track record and quality of our valued Downstream workforce that we and Genesis are fortunate to have in our future.”

Genesis Energy says that the acquisition complements and further integrates into the company’s existing operations, including their Genesis Marine inland barge business (comprised of 50 barges and 23 push/tow boats), crude oil and heavy refined products storage and blending terminals and as well as our crude oil pipeline systems.

Genesis said that the acquired barges have an average age of approximately eight years, are double-hulled and fully compliant with the requirements of the Oil Pollution Act of 1990. Eight of the nine barges are equipped with vapor recovery. Meanwhile, eight of tug boats have been rebuilt and put into service since 2005, Genesis said.

“We are very pleased to have the opportunity to expand our marine transportation capabilities through the acquisition of these ocean going vessels which complement our inland waterway operations as well as our other crude oil and heavy refined product assets,” said Grant Sims, Chief Executive Officer of Genesis. “There is a significant overlap in existing customers, and we look forward to working with Hornbeck to facilitate a seamless transition for our collective customers and employees.”

The transaction expected to close by the end of the third quarter of 2013.

Hornbeck and Genesis say that at closing they plan to enter into transition service agreements in order to ensure a smooth transition of operations and services for both employees and customers.

HOS company currently owns a fleet of 76 vessels primarily serving the energy industry and has 23 additional high-spec Upstream vessels under construction for delivery on various dates through 2016.

Tags:

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 109,235 members delivered daily straight to your inbox.

gCaptain’s full coverage of the maritime shipping industry, including containerships, tankers, dry bulk, LNG, breakbulk and more.