Tidewater to acquire marine vessel fleet from Ensco unit

Feb. 21, 2003
Tidewater Inc. signed Thursday a definitive agreement to acquire all 27 of the oil field support vessels owned by Ensco Marine Co., a unit of Ensco International Inc. of Dallas for $79 million.

By OGJ editors

HOUSTON, Feb. 21 -- New Orleans-based Tidewater Inc. signed Thursday a definitive agreement to acquire all 27 of the oil field support vessels owned by Ensco Marine Co., a unit of Ensco International Inc. of Dallas for $79 million.

Ensco said it will record a one-time pretax gain of $5 million for the sale.

"Given our focus on expanding the size and capability of our offshore rig fleet," said Carl F. Thorne, Ensco chairman and CEO, "we determined that this capital would best be deployed in that arena where we have a stronger presence and greater investment return opportunities."

Ensco's fleet comprises five anchor-handling towing-supply vessels, six 220-ft "stretched" platform supply vessels, 13 standard towing supply vessels, and three utility vessels, according to Lehman Bros. Inc. analyst James D. Crandell. "This acquisition reduces the need for Tidewater to build new vessels for the Gulf of Mexico to replace its 'bread-and-butter fleet," he noted.

The average age of the fleet is 19 years, according to a research note released by Jefferies & Co. Inc., New York.

Seventeen of the 27 vessels being acquired are working now, or a 63% utilization rate, said Lehman Bros. analyst Angeline M. Sedita. "Peak utilization of 91% for the fleet occurred in 1997 before falling to the mid 60% range by 2000," she said. "Given the overall soft boat market, it would not have been economic for Ensco to upgrade additional vessels in order to find work," Sedita added.

The transaction is expected to close early in the second quarter.