Trico Marine Services (TMAR) Message Board

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Gold/Mining/Energy : Trico Marine Services (TMAR)

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To: Mark who wrote (49)	2/23/1998 11:13:00 PM
From: JZGalt	Read Replies (1) of 1153

CC Notes: Company sees all ranges of equipment experiencing increased day rates. Margin was stated to be 60% EBITA (should check). Acquisition of Saevik will be 30-35% or revenues and cash flow and is only included in one month of the 1997 fiscal year. Saevik equipment is relatively new (5 years average) and state of the art with good management in place. They feel they got a bargain from the tone of voice. Trend is toward larger vessels -> longer term contracts. 35-40% of revenues are already under long term contract at Saevik. 1-30 days spot market is extremely high right now in north sea which explains the relatively high number reported in the 1997 earnings for that area. Rates in north sea expected to be lower than reported in 1997 as more vessels are locked up under longer term contracts vs. being utilized on day rate schedules. They expect rates of 13.5k/day to be average day rate for 1998 in North sea area. I believe the rate in the 1997 report was 14.5k. Contract renewal - in north sea strong with customers trying to lock up new contracts years before they expire on specialized vessels and larger vessels. Company looks to expand in north sea and other areas of world are looking at Saevik equipment which is relatively new and state of the art and suitable for the roughest seas and deep water. Long term debt and cash flow is allowing them to be in a flexable position they feel. Consolidation outside of the Gulf of Mexico has not occured to any large degree. Company owns a repair facility for above the waterline repair to minimize cost when boat comes off contract or in for inspection. Drydock times in 1998 are exceedingly long because in addition to the work necessary, they are using the time in drydock to upgrade the vessels (extend length) and also upgrade equipment on vessels to state of art. Next time the boat is in drydock, the costs are considerably less (50% less in some cases) since a major overhaul has just been performed. 12 vessels coming out of drydock in first quarter _all_ have jobs at $8500+/day which is above the current rates. 80% utilization rate reported in 4th quarter or 1997 was due to heavy drydock schedule. 25%-33% of the entire fleet rotates thru every year. Current utilization (which includes drydock time) is 84-85% level and should stay there for at least until the end of the first quarter. After that the utilization will approach a maximum of 88-92% in 1999. New ships coming out are 1 in July and 1 December in Gulf of Mexico. 1 in Norway in March and 1 in Brazil also in March in addition to one swath vessel (crew boat). Discussions with Michael Price group has been typical Q&A no big deal. Company continues to look at options which are in the long term best interrests of the company. Stock buyback has been discussed but is not currently being persued. Of their fleet 95% service drilling rigs, only 5% service platforms in the Gulf of Mexico. Brazil is deep water servicing 1500-4000 ton vessels and deep water drilling is expected to absorb new builds around the world. Venezula 10 billion drilling program with 4 groups expected to start over the next 10-18 months is expected to further tighten supply of shelf capable vessels which the company indicated has not yet been thought of in the general press.

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