Hornbeck Starts Newbuild Program
Hornbeck Offshore Services signed a definitive agreement with LEEVAC Industries, LLC, for the construction of the first four vessels of their recently announced eight-vessel newbuild program. The contract provides for the delivery of all four of the 240-ft. DP-2 class deepwater offshore supply vessels during the second half of 2003. Aggregate construction costs for the first four vessels, before allocation of construction period interest, are expected to be approximately $53.0 million. As previously reported, the Company plans to fund these costs with current cash and projected free cash flow from operations. The Company will also have available an undrawn revolving credit facility, which it does not expect to have to use to fund the first four vessels. Hornbeck is currently seeking price bids from shipyards for the last four vessels.
Hornbeck has also contracted the 265-ft. class HOS Brimstone, currently scheduled for delivery in early June 2002, to one of its existing customers. Upon delivery, the vessel will immediately commence service under a one-year time charter, with two one-year renewal options, with a large international exploration and production company. The Company has had two of its other offshore supply vessels supporting this customer's deepwater exploratory drilling activities in the Gulf of Mexico since April 2000.
Todd Hornbeck, President and CEO, stated, "While we designed our 240-ft. class and 265-ft. class vessels primarily for deepwater drilling applications, all of our last three delivered newbuilds have gone into specialty work. With the contract of the HOS Brimstone, we will now be able to demonstrate the special capabilities that, we believe, make our 265-ft. class design uniquely suited for ultra-deepwater drilling support."