Safe Concordia; Source: Prosafe

Prosafe sees new opportunities for its vessels as tender activity for 2024 and beyond heats up

Offshore accommodation provider Prosafe is optimistic about the demand outlook for 2024 and beyond, thanks to a substantial boost in tendering activity for this period. As a result, the vessel owner is anticipating higher day rates and fleet utilisation in the future.

Safe Concordia; Source: Prosafe

Prosafe recorded revenues of $21 million in 2Q 2023, compared to $60.9 million in 2Q 2022 while its EBITDA was a loss of $9.8 million in 2Q 2023, compared to a profit of $22.8 million in 2Q 2022. The decrease is mainly caused by a lower utilisation rate with three vessels in operation in Brazil for the whole or parts of the quarter and costs related to new contract preparations on Safe Concordia and Safe Notos.

The vessel owner explains that the 2023 North Sea market demand is weak with one active high-specification semi-submersible unit due to a lack of commissioning work in Norway and larger UK maintenance and modification work, potentially due to the windfall tax. On the other hand, the company observes strong and improving demand in Brazil and the Gulf of Mexico throughout 2023.

Furthermore, Prosafe is seeing a significant increase in tender activity and awards for 2024 and beyond with improved earnings, utilisation, and increased day rates. The firm highlights that the favourable medium- and long-term demand outlook is supported by four new Petrobras tenders in Brazil and recent contract awards in the North Sea, Africa, and Australia, which are further tightening supply.

The company’s hopes of a further rise in day rates are fuelled by a significant increase in day rates on the latest Brazil tenders. Prosafe also expects additional tenders in the UK North Sea and Brazil for contracts beginning in 2024 and 2025.

Reese McNeel, Prosafe’s Interim CEO, commented: “We have seen substantially increased tender activity in the past months across all regions for 2024 and beyond. With significant investments, a new management team, and improved outlook, we expect improved earnings, utilisation, and increased day rates to come.”

One of the firm’s semi-submersible vessels recently started its 330-day contract with an undisclosed company in the U.S. Gulf of Mexico.