GulfMark Offshore Announces Six Vessel, $140 Million New Build Program

GulfMark Offshore has reached an agreement to build six new 10,700 BHP Anchor Handling, Tug Supply (AHTS) vessels for a total cost of approximately $140 million. The vessels are of a new design developed with the builder and incorporate Dynamic Positioning 2 (DP-2certification) and have a large carrying capacity anticipated to be in excess of 2,700 tons. Keppel Singmarine Pte, Ltd. will build the vessels in Southeast Asia, with the first vessel to be delivered in the third quarter of 2007 followed by one each quarter thereafter until the final delivery in the third quarter of 2008. Construction costs related to this program will be funded from cash flow from operations supplemented as necessary by the Company's existing credit facilities.

Bruce Streeter, President and Chief Operating Officer of the Company, commented: "These vessels are the culmination of over 18 months of planning and are designed to respond to the growing demand created by increased oil and natural gas development activities as well as the new construction of drilling rigs. The timing of our new vessel deliveries is scheduled to coincide with the completion dates for the new construction, high specification jackup and floater rigs that are due to peak in late 2007 through 2008. We have worked with a number of suppliers and the shipyard to optimize capacities as well as flexibility of the vessels, all designed around a safe operating platform. This design incorporates a four-engine configuration thus creating the most cost-efficient solution for our customers' towing and transportation requirements.

"These vessels are being built to meet the growing demand of our customer base in Southeast Asia and we anticipate many of the vessels will remain in the region. The new vessels, however, are capable of being used in other regions of the world where mid-sized AHTSs are required. These vessels incorporate the knowledge base we have gained over the last decade in building and acquiring over 20 new vessels from European, American and southeast Asian shipyards and we believe will provide our customers the ultimate efficiency in performing both anchor handling and supply functions. We are also pleased that Keppel Singmarine, who successfully completed our two new vessels that went to Mexico earlier this year, will be building these new ships and we have confidence in their capability to deliver them on time and budget.

"We fully expect that once all of the vessels are delivered they will add approximately $25 million annually in contract EBITDA(1) based on our projections of dayrates and utilization in the region. These vessels, when coupled with the newly delivered Sea Intrepid and its sister vessel due to be delivered in the first half of 2006, will reduce the average age of our fleet in Southeast Asia by nearly 40%. Certain of the vessels in this group have equipment specified to meet defined criteria of our customers in the region. These vessels are further examples of our ability to add the capacity and dimension to our business through the timely building of new vessels, attractively priced acquisitions and managed vessels."

With the addition of these new AHTSs to the fleet, it will bring the fleet of owned vessels to 56 in 2008 when the last vessel is delivered. Without additional changes, at the conclusion of this expansion, the fleet would be comprised of 56 owned and 10 managed vessels.