Tidewater Expands Crewboat Division
Tidewater has committed up to $100 million to a program that will bring 21 crew and fast crew/supply vessels into its fleet by the year 2003. This fleet expansion will come from a combination of acquiring 12 existing vessels and building nine new vessels. Seventeen of the boats are to be large traditional crewboats, with the balance of the program committed to the construction of four new state-of-the-art, Tidewater-designed "Fast Supply" hybrids that blend the speed of a crewboat with the capabilities of a supply vessel. Six of the vessels costing $31 million have been previously disclosed.
Currently, Tidewater's crewboat division, the division that has generated the Company's highest rates of return over the last 10 years, has 18 crewboats deployed in the Gulf of Mexico with another six deployed off the United States West Coast. Most of the vessels delivered under this program will work in domestic waters; however, several will be deployed for work in international areas.
The keystone of the crewboat expansion program is centered on the signing of a definitive agreement with Crewboats, Inc., a privately-held, leading independent provider of crewboat services in the Gulf of Mexico, for the purchase of all 10 of its vessels larger than 135 feet in length. Additionally, Tidewater will assume new-build contracts from Crewboats, Inc. calling for the delivery of four 162-foot vessels to be delivered in May and August of 2002 and May and September of 2003. Closing is scheduled for September 28, 2001.
The balance of the expansion program is comprised of four Tidewater-designed 175-foot "Fast Supply" hybrids that will be built by C&G Shipyard of Mobile, Alabama. They are to be delivered beginning in October 2002 with final delivery in October 2003. Two additional existing 155-foot vessels have been purchased recently and added to the working fleet. A final 135-foot vessel is under construction at Breaux Bros. Shipyards and is scheduled for delivery in January 2002.
"This program will quickly take Tidewater to the forefront of being a meaningful provider of crewboat services," commented Chairman, President and Chief Executive Officer William C. O'Malley. "Just as our ongoing deepwater vessel expansion program has allowed us to address a growing customer need, this expansion will likewise do the same for us in our crewboat division. We expect to fully fund this expansion program with internally generated cash flow, utilizing our existing credit facility only on a short-term basis as needed." O'Malley continued, "While we remain fully committed to all facets of the new-build and expansion program we announced and initiated in early 2000, which was further enhanced by today's announcement, we believe it is prudent to defer any additional capital investments beyond this program at this time."