Hornbeck-Leevac To Build Eight New Vessels
Hornbeck-Leevac Marine Services, Inc. announced that its Board of Directors has approved a new vessel construction program for its wholly-owned subsidiary, Hornbeck Offshore Services, LLC. This is the Company's third such program since its inception five years ago - the first two were seven and six vessel programs, respectively. The current plan is to build eight additional state-of-the-art, deepwater offshore supply vessels ("OSVs"), with construction of four 240-ft. DP-2 Class vessels to commence as soon as a definitive agreement has been signed with the selected shipyard. The Company has signed a letter of intent for the first four vessels with one of the shipyards currently constructing vessels for Hornbeck and, therefore, anticipates prompt contract execution. All of the first four vessels are expected to be delivered by the end of 2003, with the first vessel due out in June 2003. Construction costs for the first four vessels will be funded by current cash and projected free cash flow from operations. The Company also has available an undrawn revolving credit facility, which it does not expect to use to fund the first four vessels. Hornbeck is currently seeking price bids from shipyards for the last four vessels.
Todd M. Hornbeck, the Company's President and Chief Executive Officer commented, "We have recently experienced a significant level of increased bidding activity for a wide variety of applications in the deepwater Gulf of Mexico and several international deepwater sectors. Our assessment of the visible demand for deepwater tonnage indicates a need for more equipment in mid to late 2003. Since the majority of our existing equipment is, or soon will be, contracted long-term, we believe now is the time for us to build more vessels with our proprietary design. The fact that we can do so out of currently available sources of liquidity made this an easy decision for our Board. Our in-house team of naval architects and engineers has improved, yet again, on our most versatile vessel to date, the 240-ft. DP-2 Class, in creating the type of equipment that the market is telling us it will need to serve the expanding worldwide deepwater market."
Hornbeck Offshore Services currently operates a fleet of ten recently constructed, deepwater offshore supply vessels, with three more under construction and scheduled to be delivered by August 2002. These world-class vessels were specially designed for the deepwater to maximize available deck space, supply capacities and pumping rates, while minimizing customer costs through increased operating efficiencies.