Earlier this year, Hornbeck Offshore Services, Covington, La., acquired four OSVs from Aries Marine, Lafayette, La. In mid-July, Houston-based operators GulfMark Offshore and Tidewater Inc. agreed to a $1.5 billion merger.

On Monday, GulfMark received an unsolicited merger proposal from New Orleans-based Harvey Gulf International Marine (HGIM). Now GulfMark has a decision to make.

All of this activity is pushing day rates higher, which could finally boost the deepwater offshore service vessel industry after it took a nosedive following a collapse in oil prices beginning in 2014.

“Three to four months ago, I would have told you that the larger OSVs, 300 feet and up, would get day rates of anywhere between $7,000 to $12,000, maybe $15,000. Now I think the rates have shifted so that those boats will have rates of $15,000 to $25,000 over the next few quarters,” said Richard Sanchez, senior marine analyst with IHS Markit-MarineBase, Houston. “More consolidation reduces the bidders, and we’re already down to a narrowing field. You also have fewer boats in the spot market, with owners holding onto their boats for the [longer] term market contracts.”

Sanchez said he thinks the GulfMark-Tidewater deal will go through. “That makes more sense,” he said. “Either way, it’s a major consolidation.”

Companies with contracts and multiple stacked boats are swapping out vessels of the same size and abilities to keep down expensive drydocking costs. Meanwhile, there are some short, near-term drilling activities that are set to begin later this year in the Gulf of Mexico, Sanchez said. “There is some talk about two rigs parked in the Canary Islands that would be part of two-year jobs, but there is some question as to whether the operators have their ducks in a row.”

Given the hypothetical scenario of the combined GulfMark-Tidewater acquiring HGIM, Sanchez said, “That actually might make some sense. Harvey really hasn’t been pushing its boats internationally for quite some time. They’re more a Gulf of Mexico company, and that would give Tidewater a bigger presence in the Gulf. And that would raise day rates significantly.”

Tidewater, GulfMark and HGIM all emerged from bankruptcy this year. "That's another good reason why that combined company would make sense," said Sanchez. "They're all clean, no debt.

While activity in shallower water is hit and miss, “There are some mom and pop operators out there with one or two boats that I expect are doing quite well,” said Sanchez. “I can’t imagine that their boats have much overhead, and that’s a big help.”

Ken Hocke has been the senior editor of WorkBoat since 1999. He was the associate editor of WorkBoat from 1997 to 1999. Prior to that, he was the editor of the Daily Shipping Guide, a transportation daily in New Orleans. He has written for other publications including The Times-Picayune. He graduated from Louisiana State University with an arts and sciences degree, with a concentration in English, in 1978.