USA: Hornbeck Announces Major Expansion of Its Newbuild Program

Hornbeck Offshore Services, Inc. announced yesterday, on Feb. 6th,  the expansion of its fifth OSV newbuild program by four vessels, as well as its intentions to ultimately build up to eight Jones Act-qualified MPSVs as a subset of its growing OSV newbuild program to service the subsea construction and IRM market that is expected to expand significantly in the GoM beginning in 2015.

The first two vessel commitments to be reconfigured as a new class of domestic MPSVs will be based upon the HOSMAX 310 vessel design, with expected delivery in the second and third quarters of 2015. These new U.S.-flagged, Jones Act-qualified MPSVs will include an IMO Special Purpose Ship (SPS) code-ready class notation, a 250-ton heave-compensated knuckle-boom crane, helideck, moonpool and accommodations for 73 persons, and will be suitable for two work-class ROVs.

With respect to the other two vessels announced today, the Company is currently evaluating various alternatives and is in the process of finalizing its plans to either exercise its next two options to build additional HOSMAX 320 OSVs for delivery in the first and second quarters of 2015; or (in lieu of building those vessels) construct additional new Jones Act-qualified MPSVs. Assuming the Company opts to build two additional HOSMAX 320 class OSVs, the aggregate incremental cost of the four additional vessels announced today will be approximately $260.0 million (roughly $85.0 million per MPSV and $45.0 million per OSV), before construction period interest; and will expand the Company’s on-going newbuild program to a total of 24 vessels.

The Company’s fifth OSV newbuild program would then be comprised of four 300 class OSVs, six 310 class OSVs, twelve 320 class OSVs and two 310 class MPSVs.

Assuming the Company builds two MPSVs and two new OSVs, the aggregate cost of the Company’s fifth OSV newbuild program, excluding construction period interest, is expected to be approximately $1,160.0 million, of which $498.8 million, $327.6 million and $59.0 million is expected to be incurred in 2013, 2014 and 2015, respectively. From the inception of this program through December 31, 2012, the Company has incurred $274.6 million, or 23.7%, of total expected project costs, including $87.5 million that was spent during the fourth quarter of 2012.

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Shipbuilding Tribune Staff, February 7, 2013