Matthew Rigdon, Executive VP and COO

Recently, I’ve covered the aging fleet of Jones Act qualified deepwater OSVs operating in the US Gulf of Mexico and the implications it will have on the overall OSV market as demand continues to rise. In recent conversations about future vessel demands has focused on possible new build vessels. Given the cost of new construction today, it is extremely unlikely that any new vessels will be built on speculation alone. Furthermore, it is even less likely the any US vessel owner could secure financing to construct such a vessel without securing long-term contract for charter by a blue-chip client. It’s not surprising that we’re finally seeing activity indicating that operators in the deepwater are considering requests for quotations (RFQs) to build new deepwater OSVs against firm contracts. 
In the last few weeks, JOO has received a request for information (RFI) from a reputable shipbroker that is working on behalf of an unidentified operator. This RFI requests indicative charter rates for a new deepwater OSV build for various charter terms ranging from five to ten years. Additionally, the estimated construction costs, as well as financing terms, must be provided to allow the operator to better evaluate whether or not they wish to issue a formal RFQ which could be issued to the market as early as middle of next year. 
Whether or not an RFQ is actually issued, just the RFI alone supports higher valuations of existing vessels and higher charter rates for those vessels. It is especially promising for the youngest OSVs in the Jones Act fleet given the reactivation of old vessels that has occurred over the last several months. It certainly is positive for JOO given the relatively young age of our fleet.