I remain intently focused on the deepwater rig market, as even small changes in the already low deepwater rig count can have significant impacts on the OSV market. I am cautiously optimistic that we will likely not see the rig count drop below 13. Rigs have increased to 16 since last month, but forecasted analysis suggests that it is likely that three operating rigs will roll off of contracts and not be renewed within the next few weeks. This means the market will most likely be back to 13. Through the balance of the year we will likely see one more rig idled, but beginning at the end of this year and through all of next year, there are four rigs slated to commence new drilling programs in the Gulf. That only gets us back to 17 rigs by the end of 2021 but also builds the momentum moving into 2022 – and while beyond the end of 2021 is very difficult to forecast, these are good reasons to remain positive.

Additionally, we have seen a few recent long-term vessel requirements (1+ years) hit the market in support of activities that go well out into next year and beyond. Some of these requirements can easily support existing operating rigs and in those cases not create incremental vessel demand. However, it does mean that the respective rig will have activity for at least the next year. Of the vessels that have new or incremental activity, it is not yet certain that those requirements will come to fruition but any potential new vessel needs are positive signs.