Standard secures term work for all five large PSVs

S.D. Standard Drilling (SDSD) has secured term contracts for all five of its large platform supply vessels (PSVs) with potential for entire winter coverage for all its large size vessels. 

Standard Drilling said on Tuesday that the company’s final available large PSV, the Standard Supporter, started its contract with Repsol on January 21 at levels well above operating cost.

According to the company, the one-well contract will last approximately 100 days.

This means that all five of the company’s large size PSVs are working on term contracts. Standard Drilling added that, if options are exercised, it secured winter coverage for all of its large size vessels.

Apart from the Standard Supporter, the company’s Standard Viking is working under a one-year firm contract with Peterson to mid-July 2019, including a one-year option at an increased rate.

The remaining three large vessels, the Standard Princess, Standard Supplier, and Standard Provider, are working under a firm contract with Allseas from September 30, October 1, and December 16, 2018, respectively.

The Standard Princess will end its contract on February 15 with a 2×1 week plus 15×1 day options at an increased rate. The deal for the Standard Supplier ends on the same day with identical extension options following the end of the contract.

As for the Standard Provider, the firm deal will end on January 29 after which Allseas has 6×1 week plus 15×1 day extension options.

Martin Nes, chairman of Standard Drilling, said: “It is a challenging winter market so keeping the vessels in operation is key and in line with the company’s strategy. We are now in a good position to meet what we think will be a better market when the spring season arrives.

“Considering the market that we have been in and based on our strategy to not charter out our large vessels on long contracts with low rates, we are satisfied with the utilization.”

The company added that the commercial terms of the contracts remained private and confidential but would in total give a positive EBITDA after management costs.

Also, the utilization for the large size PSVs was 90% in the fourth quarter of 2018 and 91% for the year 2018.

“Considering the market that we have been in and based on our strategy to not charter out our large vessels on long contracts with low rates, we are satisfied with the utilization,” Nes said.

Standard Drilling currently has ownership in 17 PSVs in total (in addition to FS Arendal that is on a one-year bare-boat contract that expires at the end of March 2019).

Five of these are wholly-owned large size PSVs working in North Europe while eight mid-size vessels are partly owned through a 25% ownership in Northern Supply AS. Of those eight, two are working on term contracts in the North Sea – including FS Arendal, four are working in the spot market, two are held in house for maintenance, while one vessel is in warm lay-up and actively marketed.

The utilization for the medium size PSVs in the fourth quarter 2018 was 81% and 89% for the year 2018.

As for New World Supply, where SDSD has an ownership of 34.4%, it has a fleet of four modern mid-size PSVs, after sale of two vessels in October 2018. All of the NWS vessels are in lay-up.