Overcapacity information:
I have copies of a few analyst reports. They may be outdated, but here is my info. I would like help in completeing and updating this study.
July, 1997: Furman Selz claims that overcapacity in 1970s and early 1980s was due to fragmentation in industry with mom and pop outfits in the GOM contributin to much of the problem. Also cite tax laws as a culprit.
They state that 2 at boats per rig, 60 new boats are needed to cover new rig entering the market. With ave age of fleet at 18 years is high causing more boats to retire, but high day rates offsetting the trend a bit. In summary, they estimated 140 boats over 3 years needed to be built. 80 for replacement and 60 for new rigs. Interestingly, they do not mention how many boats are being built, nor comment on whether or not too many are. But by looking into it, and recommending HMAR and TMAR in the report, one assumes that things are OK. They mention that TDW has retired an average of 20 boats per year over the past 3 years.
Raymond James - May 97: They also mention the irrational, fiancially unsound overcapacity builds in 70s-80s and mention that the fleet is in the hands of more sophisticated owners and that tax laws do not favor speculative boat builds, as in the past. Hope so!
DLJ - Sept 1996: Mentions that at that time 160 drilling rigs and 32 platform workover rigs in GOM with 270 boats servicing them. And 18 supply boats were on order. (That's 270/192 = 1.4 boats per rig -- so maybe the 2 boats per rig is high?)
They show a graph of worldwide supply/towing vessles which shows the fleet going from 1500 worldwide in 1990 to 1200 in 1996. That's very good to see!
This site shows current rigcount.
offshore-data.com
This shows 171 rigs now vs 162 a year ago in GOM -- so I assume we are counting the same rigs as mentioned in the DLJ paragraph (above). So we have 5.5% more drilling rigs now. I wonder how many more platform workover rigs are in the gulf ( whatever they are)?
That's my data -- meager as it is -- it gets us started.
Summary:
FS says that 60 boats are needed over 3 years for new rigs and 80 for replacements. DLJ says that 18 were on order. Data shows a 10 rig increase which is 14-20 boats right there -- which agrees with FS number of 60 new boats needed over 3 years for new rigs. Things seem consistant between the numbers, so we accept the 80 boats needed for replacement and believe that 140 boats over 3 years are needed. That's 45 per year. I also heard that the new rigs are designed more efficiently and may require lower boat/rig ratio. So maybe we want 40 boats per year for steady state?
My understanding is that more of the GOM has been made available and auctioned for drilling. Is this true? Is rig count going to increase more significantly or at same rate or level out? Comments please! (My 40 boat requirement assumes the same rate of increase in rigs as in the past.)
Would like to get an update of the new build count from somewhere. Remember that Mr. Hvide's Dec 22 letter states that "workboats are in tight supply, and newbuildings are targeted toward the fast-growing deepwater segment of the market." So if we were to find out the newbuild number for the boast builders, we would have to separate the deep water boats from GOM boats.
Whoever can dig up boat build numbers, please post them. I know of Halter Marine (HLX) and Edison Chouest as boat builders. Who knows of others?
Does anyone have update of analyst reports? |
