Matthew Rigdon, Executive VP and COO

Since June, the deepwater OSV market in the US GOM has continued to soften. The count has fallen by another two rigs leaving the current, active deepwater rig count at 13. The number of deepwater OSVs that have been idled also increased by 7 during Q2. Given the outcome of Q2 and with seven deepwater vessels being stacked, we are beginning to see increased layoffs throughout the industry.

d1159ce6-0250-4ec4-8de6-12e11ca7f2f2I am cautiously optimistic that we have hit the bottom of deepwater rig activity. Through the remainder of this year, the rig count should remain static with an uptick in activity beginning towards the end of the year and into 2021. WTI prices have remained above $40 over the past month which remains within the profit margin for many large companies. Furthermore, we have seen a handful of deepwater OSV charter requirements hit the market for work beginning toward the end of this year and into next year. This helps support the idea that rigs will be returning to work and that there will be an uptick in general deepwater activity and drilling production support work. Many companies continue to indicate their long-term commitment to drilling in the US GOM and that they remain focused on the US GOM as a region for increasing their proven reserves.