Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Lazlo Pierce who wrote ()	6/15/1998 9:27:00 PM
From: Teddy	Read Replies (1) of 95453

NEWS Snips from Offshore Data Teddy's note: Hi everyone, sad to see so many of you still own stocks in this horrible sector. Even worst to see that some of you are thinking of buying more: 35% or 40% more down side, then six months of going side ways. Anyway, i found this little snip in today's Offshore Data. Read it. U.S. GULF: The Gulf of Mexico's fleet of 338 supply vessels is feeling the impact of lower crude oil prices with the decline in the number of working rigs forcing at least a dozen boats off charters. Available boats are tied up at docks along the Gulf Coast, and owners know that future charters will be at lower day rates compared to the last charter under which the vessels worked. Day rates are sliding to the low-to-mid-$7,000 range for new charters of 180-foot workboats. A month ago, rates were around $8,300 a day for the same type of vessel. The boat market is afloat with rumors and speculation about why the rates are falling, with a great deal of finger pointing at some owners willing to lower rates in order to maintain high vessel utilization. Vessel owners recognize that rates were due for a correction after steadily climbing close to the $9,000 a day level earlier this year. The resulting market is one in which supply vessel owners are fighting for market share, and doing whatever it takes - lowering day rates - to keep vessels fully utilized. Workboats supporting jackup operations in shallow waters will continue to be impacted the most because of the expected declining rig count over the next few months. Most workboat owners are clearly worried that the downward spiral in utilization and day rates will continue for some time. Owners are "battening down the hatches" and preparing to ride out the down cycle. There is speculation that a few of the planned new supply vessel orders might be canceled. Edison Chouest Offshore may shift orders placed earlier with Ingalls Shipbuilding to company-owned facilities in Louisiana. Chouest said Ingalls is attempting to renegotiate the vessel prices, which may force Chouest to move the orders to its own yards in LaRose, Houma and Shreveport.

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