The WorkBoat Composite Index had its worst month of the year in July, shedding 146 points. The 7.6% loss represents only the second down month of the year for the Index. For the month, the only company to gain ground was Northrop Grumman. The other 30 issues were in the red.
Operators also lost 7.6% with Cal Dive, Tidewater, Gulfmark Offshore, Oceaneering International, Hercules Offshore and Transocean all posting double-digit losses in July.
However, oil service operators are optimistic going forward. During his company’s quarterly earnings call in July, Todd Hornbeck, CEO of Hornbeck Offshore Services, said, “We firmly believe that we are transitioning into a sustained up cycle.”
In Gulfmark’s earnings call, also in July, Quintin Kneen, president and CEO, said the U.S. Gulf of Mexico was the bright spot in the second quarter with utilization of the company’s OSVs just over 90%. Average day rates for the quarter in the U.S. Gulf was $25,000 per day “for the first time ever and it appears to be going even higher,” he said. “So the tightening that we have been looking forward to in the U.S. Gulf of Mexico seems to be here.
“The U.S. Gulf of Mexico got stronger, faster than we anticipated on the first quarter call, mostly from a utilization standpoint,” Kneen told analysts. “We saw a $500 per day pick up in the day rate, which we were forecasting, but utilization was almost 6 percentage points higher than we were expecting. We continue to anticipate the second half of 2014 to be strong, and we’re still anticipating the year-over-year increase in average day rate with U.S. Gulf of Mexico of up to 15 percent.”
— David Krapf