Tidewater (TDW) 4 Nov 222022 Q3 Earnings call transcript

Good morning. My name is Colby and I will be your conference operator today. At this time I would like to welcome everyone to the Tidewater Q3 2022 Earnings Conference Call. [Operator Instructions]. I will now turn the call over to West Gotcher.

Colby. you, Thank and the everyone, XXXX. Tidewater's conference earnings Good and welcome X for X XX, months call morning, to ended September I'm Chief this CEO, joined of Sales and call our Piers President on and Middleton. Marketing, President our morning Vice Quintin Officer, Financial by our and Sam Rubio; Kneen; the

the make or that by to tdw.com other at any present longer sec.gov. with November any Form any and this is make press call measures. A reconciliation that and implied call, Therefore, are at additional These website call. today, on materially conference are through measures There time Please During XX-Q tdw.com factors we'll can the during expectations. XXXX. that in you're replay. available speaks referring may of and and to information comment of and as stated of Also time-sensitive the included details call only performance Information accurate GAAP recent at we'll over that, presented risks the today's and now call, we be I'll found advised both company's Quintin. most may SEC that non-GAAP turn forward-looking different from are release. during our to website these factors. to And non-GAAP yesterday's on GAAP financial financial X, certain our documents today's and statements be our uncertainties be that on for refer cause plans actual to on or XX-K our at no the

improvement XXXX the slightly our higher in strength free day and pleased of on our Call. generation. of XX.X%, which the profitability per market everyone, the business, its offshore active to nearly quarter, about momentum $X,XXX day talked a West. quarter say Good Thank X.X flow in welcome The about Conference by and the to meaningful as saw points. morning, I'm we quarter the third continued is cash up in during increased vessel that average most Earnings you, Tidewater indicator utilization rate percentage third

we we cycle activity It third a have $X,XXX global in day the and the about the average was to restrictions fleet-wide subsequent activity as $X,XXX. increased focus the day. This step months significant We to past security. global per up in and in over conflict the the up over up X over nearly supply up of by offshore the in actuated in per past based average during increased activity. the the typical average third past year the global pandemic quarter steadily entire the market demand of are in on increasing of day we that energy day. that the previously The over of quarter been And attrition year-to-date, has is discussed economic further quarter oil recall and increase and Ukraine set vessel last of by $X,XXX increase decision-makers as was was year rate have of now easing in second the rate emblematic rate benchmark day years several move year the tightening may vessel You that with up increase offshore passed additional discussing. began price

XX quarter, new contracts covering we into third vessels. the entered During XX

a of realize contract of continue allowing indicative pricing The first market. further contract in going from the quarter contracts months, that third a multiple at X those the our to momentum entered than OSV we contracts signed average entered higher day the follow-on quarter, contract. rate into during we short of upward us duration For was each today's approximately strategy during perspective into is duration which chartering to vessels materially the was

For third Total the $XXX.X quarter. million compared revenue the increased to million in to increased third XX% revenue $XXX.X second quarter. up quarter the meaningfully, to in compared quarter, the second

Looking was with XX.X% about margin revenue. the up approximately at we've rate The about the per of quarters day percentage vessel points from up XX% in XX year. the Vessel well X.X% cash average the increase level and active third sequentially vessel points driving this per up of remainder expanded to last was active target nearly sequentially. XX%, X.X basis, in increase percentage excess recent a utilization revenue on talked in quarter of in the

and in Our Europe/Mediterranean U.K. in fleet day led the the an XX% improvement rates sequential Mediterranean. way with

the this quarter prior considerably North the spot and improved of during level The activity decision the day the the about third XX Utilization realized were quarter. for We've play in Drilling meaningfully the the up of high a one XX% vessels which our usually a points is quarter, development quarter. region, market, XXXX. this to to bit market quarters in the up this rates realized remained increased in in North favorable given strategy Sea all-time proved talked to nearly where Vessel XX% quarter. more this the weather margin the in anchor cash Sea, in percentage in be handler third during from seasonally strong to XX%, sequentially twice margin than quarter segment, particularly also conditions. good robust,

with XXXX. the active short the This during X% momentum improved segment the about was was due XX% in up from utilization period this remain Day interim quarter. about and caught continued between now day, essentially XX%. contracts same during XX% quarter level results of to $XX,XXX show to quarter Africa vessels a on pleased West We handful cash strong the with unemployment. drop sequentially to bullish of look in rates XXXX. are down margin from we as utilization ticked periods to per as during Vessel flat to

million in fleet to to continues cash the is be acquired this, the the OpEx acquired year and per progress in we cost West as XXXX. Asia but from realizing of will utilization remain when increased this of located in rebound SPO in region Pacific usual to expect region from realized, provide through half higher this OpEx additional margins discussed in and increases which, confident We this due will structure, consolidated Africa, operating XXXX. $XX synergies and the margin in we provide Nearly we've

to Turning region. our Middle East

years. excess average During X% the in rate to improved third cash Vessel $X,XXX anything seen by day. quarter, XX%, day margin we've well of over recent per was about in

is Although this a in the the more region fragmented the by vessel third was characterized substantial fairly day a on XX%, basis, which and progression in is specification modest group vessels. rate up nearly year-over-year day quarter a move which of nature lower market rates are

will as this have forward, have rates relocate only aggressive Looking positive the for years, growth will are Middle drive as those announced for principal also region the customers similar day for East, to growth reducing supply coming day not competing regions. for implications in the a this recently the but for other provide such regions Pacific. in This but induced plan regions other continue region, tonnage in will to in vessels Asia rate improvement which

XXXX. Average We vessel factors in about percentage points. X variety utilization as rate segment. contract commencing quarter X that by commencing late added in Americas came had We to the are that were the of few improved reactivate back ahead new that off utilization. a fleet active to beginning There a a sequentially, approximately to of the in X% the work we vessels Turning day the drove November. decreased in contracts reduction work

other work to undergo within regions we had off dry-dock Americas. and come mobilize of Additionally, a to vessels handful of the

for expect to as utilization trajectory this employment and of through continue XXXX. the well moderate quarter year upward an We functional the fourth the and remainder into to in

segment. benchmark to Lastly, the number were driven around resetting the rates of primarily by like new larger and rolling to our Day up new during quarter, Asia XX% day I'd turn in our PSVs region levels. rates to contracts to on Pacific a

seeing are now in line to in day other where rates push We regions. able we successfully have been larger PSVs to on rates

the costs $X totaled during SPO million, other G&A $XX.X approximately of transaction-related in million with with along acquisition professional quarter expense. fees million G&A which the expenses and includes SPO-related Our associated $X.X

Excluding million. rate Tidewater for pre-acquisition Tidewater of its to G&A legacy rate to run per is these compared run million. $XX.X $XX SPO of compares legacy million $X.XX pre-acquisition run items, quarterly rate million quarter G&A The $X of a G&A

in first a by sequentially. million benefit of to remaining on Free $XX.X G&A related cash $XX.X the the the a of quarter, the was realize our So to confident remain an target synergy compared acquisition annual expect million to synergies basis, to is $XX and G&A down improvement for $XX the cash of of We $XX.X the our of G&A quarter second to quarter the flow ability end million. SPO $XX in outflow million capture compared representing million million XXXX.

as and Over customers weren't prior working we had invested the timely. we've grew, in quarters, capital business some few that the paying

to the of Fortunately, slow remedy and customer now we've some able paying capital investment working the in moderating. is been issues

working our to to expect make balance In continue the investments grew to revenue fact, XX% do the receivable ended as quarter the continues We quarter second accounts business capital balance. although below necessary grow. sequentially, in

vessels reached However, we where is believe remain XXXX, vessels. the disposing a the We result the a includes cash entire reactivations in with basis. flow the conditions revenue a of X will growth of held-for-sale positioned We generate SPO proportional acquisition. our ended non-core confident part remaining business that we've in market to added the on as the that fleet point end vessel and free to quarterly quarter working which category, X by meaningful investment combination now will be of of

classified X as We also vessels have stacked.

of remaining the the possibility any evaluate vessels. will We reactivating of stacked

stacked $XXX,XXX However, COVID-XX off the dispose the quarter. remaining costs we lay of the $X.X second during quarter, otherwise quarter. continue in above slightly third sell to in quarter. associated were vessels to million the the held-for-sale Vessel expect fall. amounted Costs about to third with They fourth all or and

and very we third default X expect and the summary, are costs COVID-XX quarter stack disposed. pleased results. assets the for as held in with We off lay XXXX vessel In remaining costs vessels are essentially to sale the

vessel first. are and that typical robust believe performance profitability supply driving expect And activity and the do me to an in the the offshore factors we turn that, fourth in in profitability the let our within. for of to and in company's We market Piers fundamental markets XXXX. Although increases over the that tight some global seasonal business, continue with variation will quarter increasingly an overview the throughout call drive

morning, you, Quintin, Thank good and everyone.

have over to well we're upturn the take in well, most and X with our modern the fleet advantage the pressures are issues last Over we the vessel larger we've rates to talked push quarters, to effects see the vessels where today. XX market of months, HTSs the of starting PSVs the that about class and classes some we feel of a supply paying smaller vessel we are been of larger classes in lifts affecting really market. we as the rates of to able continuing why these larger to boats. old truth the the placed And this adage some seeing And our tide are OSV that all demand of drive day last now beginning supply-demand global rising whilst in

quarter. to in day $XX,XXX rates largest global the for increase the $XX,XXX and on PSVs X-year day rates upside, rates averaging market that the HTSs time quarter-by-quarter. the charter positive as on whole charter Clarksons we Research to in side, per rates Specifically, the for $XX,XXX compared positively impact All and per OSP pushing the quarter and a circa levels reporting compared is with shortness right direction have last supply to see per last at $XX,XXX X continued large day per day year demand indicators time

and to industry note you we we reporting we to that fleet for are how aligned driving PSVs Working where both will are regions through of as with tracks intent and deliver OSV meters with as matrices how can various market. and and more on handlers we our classes brake the changed the anchor are OSV so global the quarter, our This a tracking by the for of square internally starting the vessel have externally horsepower Europe. and some picture that we that clearer how

rate continue to medium to region a see the As projected XXXX, that currently had term. demand continue decline of GBP in of the day units about XXX,XXX medium last of by half our for securing meter end averaged per spot semi class in capacity impressive up and Sea in XX $XX,XXX which the to BHP of last We and And rate per to will a this strong from fleet demand QX our for some the operators term XXX we long mentioned largest very region per for square XX,XXX own in day record day XX day averaged we AHTS to $XX,XXX months. high $XX,XXX see for XXXX. day per slow in increasingly turn quarter quarter. QX per composite rates in movement all, XX Quintin the helped subs with North compared AHTSs, strong the class in plus we mentioned, the over quarter larger a to region PSV All very of $XX,XXX focused the rig plus in and large quarter, on

across handler in highly to we per commitments a high in BHP remain side, over QX beyond, have classes. day the XX% fleet such rate in rig XX% large well Across X,XXX but edge meter an a QX region rates with market up up going XXXX The the rises rising to class this of region. in as a seen rates class in Moving leading been rates day XX for market, fix $XX,XXX contracts per customers' translate including cross-section XXXX of to the Middle OC they will it per the day. making OSVs anchor vessel have region in for seen QX to edge to per XXXX continent, are XXX try XXXX, per now Quintin's $XX,XXX XXXX plus XX,XXX class by region Even we tenders whole for QX remained $XX,XXX Petrobras of and continued from of forward, in across for quarter with per AHTSs significant calling PSV, $XX,XXX per for XX% OSV smallest, demand go-forward to region per the in still $XX,XXX of with marketplace, $XX,XXX day the up have in rate the we a $X,XXX which of QX fractured day continued XXXX, the months, rig in classes Since our into good all in by classes continue QX, lack class in should competitive third is end jumping in classes vessel of to PSV, driven on In Activity BHP and sure in count have the and our OSV QX anchor from uptick across in indicates has supply classes. square by composite pushed forward saw all some Similarly, testament both our rate driven in leading of push day tighten continues quarter in during on concerns during disciplined in by per which with basis. per which, QX day smaller handler, in region asset a excess up always day and pace region, this whole XXXX. $X,XXX day for the to increase earlier in a day With XXXX day the PSVs. our X,XXX includes all from in the in In day. the we Africa. the pushed boding rates team to several of from class, have to to vessel which XXXX composite we Americas, across the commencement they sub square Brazil activity XXXX. part by last $XX,XXX they but XX% day X,XXX and have the rising India, East, for the rises rates of large of QX quarter the class being in excess about XXXX as QX in of meter to vessel point, XXX $XX,XXX by floating to

the market, volatile closed at which ton in indicator XX% increase the day levels, AHTS As auction coming Petrobras per underlying levels a lowest bid XXX a requirement year-on-year for roughly the X-year in of equated an reverse $XX,XXX quarter, similar XXXX. during in strength the from rate to the with

our the a of to of XXXX rate classes months, most day fleet all across of from is push $XX,XXX team up QX OSV on rates and class fleet Americas BHP the in While XXXX smaller team rates with day QX day. XXXX a PSVs in high day in achieved XX excess prior leading-edge XX,XXX our QX QX in the day day composite per the QX XX% $XX,XXX in over $XX,XXX rates XXXX with range. moving AHTS to the drove class the fleet $XX,XXX in PSVs, again, in composite quarter square of per rates sub-XXX per up for meter XXXX, Likewise, per day of leading-edge from day day up $XX,XXX

Lastly, Asia Pacific. in

Quintin we season. day region starting movement pickup our start terms regions. the of projects monsoon significant to region won't compared rate kick up in QX seeing XXXX to probably off in other see we when start of you region the the post As movement traditionally, we in now catch until mentioned, feel are the seeing really to of But

market rose to per $XX,XXX BHP our the QX in QX, composite day are with right the Overall, of day X,XXX Similarly, up of pleased leading-edge in meter XXXX. in QX class region. $XX,XXX our Quintin, team's increased PSV, XX% over square And per team very the positive of the to Sam. in AHTS day fleet large and in of mentioned market, $XX,XXX in our as and XXX per from to continued X,XXX class by to XXXX, subsequent rates XXXX $XX,XXX Thank excess per fully XXXX. we for we with plus for And rates I'll that, leading-edge continued per continue $X,XXX that with to quarters expect in XX% into excess move day smallest rates $X,XXX hand in day how QX for For level QX has the direction day day the momentum XXXX of per rates outperformance to with region. day throughout you. from

My primarily to and to make you, XXXX. financial I discussion and now Thank of comparing you discuss the will Piers, quarter points everyone. focus the quarter second these our results current morning, that key some results like through results. would good take on quarter-to-quarter up

As noted or our $X.XX of release income operational continue reported an perspective, to diluted press we in filed we From $X.X yesterday, million share. net revenue generate quarter-over-quarter. meaningful per

and Our Compared the third is same of of to $XXX from to last increases XXXX. for from XX.X% throughout utilization sequentially second is rate This increase quarter vessels. is that benefited $XXX.X approximately full a acquisition, quarter close million. quarter Utilization to quarter also in SPO each with quarter rate or XXXX year, QX. company. million XX.X% of utilization of XX% the $XX of higher increased significant million. effect The SPO the day organic sequential active compared uplift the day increase revenue was a revenue the the the result This and the

$XX,XXX day. the QX SPO from quarter out in of Vessel activity marketed SPO day addition $XX.X vessels in contributed QX. and costs the was the approximately in As $XXX operating for nicely increased Vessel per $XX.X Legacy increase costs. in the and by rates gross day from mobilizing operating million million $XX,XXX XX% million, the $X,XXX improved as in the in was new driven margin the quarter. vessels quarter contracts. increased an for increase to had third X.X% cost of vessels principally second operating several mentioned, Overall, per XX%, to up day of quarter we per to day QX, per from

expected, is effect from increase the the As we absorb this an SPO of QX as full fleet.

fleet. associated decrease we we the continue see going realizing identified However, cost as SPO expect to forward with synergies

$XXX,XXX $XXX,XXX per amount which million, net our sold this X $XX we proceeds on net day As a and recorded In of vessel. gain quarter, will on for cost substantially. expense operating the vessel targeted a of is reduce synergy our once -- reminder, vessel the realized,

revenue expense improvement fleet in impairment We for capacity to at charged utilization income from and reviewed higher QX, $XX.X We We counts full additions for to $X.X from rates quarter. by the generated million SPO related also down million as perform operating inventory higher slightly quarter, driven each physical G&A was resulting expense inventory $XX.X obsolescence. of $XX.X QX. the an day the year a QX. entire higher million and million, operated the quarter from slightly of

basis, SPO quarter in an included already which line our expenses would with of compared about included decrease per over associated was the costs of legacy approximately well million, million synergy in $X entities, which $XX and rates to quarter $X.X of million G&A the million third to run acquisition SPO QX. the with million. with transaction On $X.X $X.X annual expense million associated in below The a slightly in third quarter. half G&A this $XX equate of target is

anticipate realizing achieve synergies G&A the QX by the XXXX. continue and end success We synergy the remainder of to of

expense acquisition. decrease QX, the We bringing includes fees full and close G&A transaction professional in which to year million, to other to expect costs $XXX SPO related our continue to cost

also dry X%. compared $XX once $XX.X the our complete. In deferred million achieve quarter, dry few a million an for run utilization by million costs In integration SPO associated and QX. of been the days, $XX.X which dock which approximately Our of dry this the impacted quarter rate quarter, we reactivations, XXX is docks QX year included dry is dock regularly with dock vessel the to negatively annual goal heaviest has in scheduled vessels to incurred due to fleet. we incurred

in total $X.X quarter, capital approximately QX, incur bringing the million costs incurred dock in to expect also XXXX. In we in the for $XX million about We year expenditures. the $XX dry to million full

XXXX CapEx to expect year about full for $XX the We be million.

requirements to and We technology continue executing initiatives. modifications contract vessel new related

our of packs Free have million the collections. an receivable is has year. $XX.X In quarter, additional cash CapEx from increased projects flow -- battery increase as accounts which overall additional which been $XX.X added, due to this in primarily QX, million was for increased such addition,

generate accounts As increase anticipated, a leading modestly as increase, working that receivable, our in but quarter. free QX We quarter-over-quarter. the to continues with to we balance to held we increase to where in revenue even on flows a the working begin capital for cash have In XXXX, capital reclassifying decrease sheet revenue strong reached point sale. will investment during equipment began did we normalize, assets property should vessels our believe from

XX through X We this QX, XXXX, at value have since had run vessels program. a At the we for $X.X end held of sale million. of vessels

quarter, During of we vessel the $XXX,XXX. X proceeds third for sold

now During the to SPO of received quarter, we working on adjustment regions. the agreed and a million. would final to the the of capital performance focus payment the $X.X I on acquisition like

of for million the million quarter quarter vessels average compared The in million increase quarter, which in of region $X.X XX%, region X from the to in Our reported Active XX% down which for the XX from an income reported of operating was QX in prior Americas utilization QX $XX quarter. operating of of in $X region XXXX. operated was the to $XX.X compared income revenue QX. The million QX. was

States costs increases XX QX. of The in rates to vessels mix vessel applies $XX,XXX day attributable the a crew increased Caribbean. operating income crew in related United from to per higher due from was to -- back from to in costs, operating to day reactivation primarily and However, decrease $XX,XXX as

loss operating SPO operating region the vessels influenced $XXX,XXX full operating by of this prior result operate the addition down additional to the $X.X to quarter quarter, the SPO average at of region million to quarter the quarter revenue vessels. of revenue in X The increase of an utilization in third compared of to vessels QX, XX increase compared by $XX.X driven XX.X% region region. reported were vessels profit in the million compared Asia increased Active the revenue. of the in in in increases $XX.X For to QX. was Pacific as XX.X% third QX. also income million the a reported The effect quarter compared in an The

as day by day XX% day to were rates contracts push QX to when day increases in administrative in operating partially per to addition, per general $XX,XXX offset revenues and improved costs. In by compared and costs Higher in QX rates continued have $XX,XXX we expire.

As mentioned previously, be the of moving beneficiaries the of synergies will one Asia forward. targeted Pacific region the

an the The $X,XXX revenue loss profit operating operating The quarter this the primarily the of in to higher increase reported in QX. $XXX,XXX to X due increased income operations. rates in and X day of approximately XX% operating compared $XXX,XXX percentage of as third QX, For improved an was day third to in in segment compared vessel revenue, reported the driven million million in $X,XXX $XX.X region region heavy was region quarter dock by day of of $XX.X quarter, points to April. operated to compared in Middle vessels QX. vessel compared quarter. SPO at to XX% East than improvement per in vessel the QX by quarter in to full per the QX added the a the SPO dry higher less X regions. QX. rates which utilization X prior Day vessels, was to X -- The XX in Active the

compared million operated The utilization compared operating Our QX. XX% over considerably $XX.X in the XX% Europe at an Active $XX.X XX saw and increase in increased from to QX. of in QX Mediterranean region was income region which QX. income increase to QX. operating $XX.X million of in vessel reported X to quarter, million million vessels revenue compared $X.X of in We to

day to We also saw a significant uptick in average day QX. in $XX,XXX rates day compared per to $XX,XXX per

in XXXX. in the point, rates XX% by day day reference anchor higher rate positively rate QX we the significant beginning that a QX and typically QX off region. emphasizes from due resulting realized quarter, the to the day growth by year, see revenue, the the was operate were QX the the and from our some we so was for supply day since increase operating in in day income may As increased in In mainly year. normal toe rates in which impacted the The in drop is segment quarter the Day have seasonality higher increase handling $XX,XXX, the improvement this in XXXX rates. quarter rates of strongest driven shipped in period.

revenue Active from compared region $XX.X operating was in XX% market of decreased slightly income improve in million million The million more $XX.X have we X average X West XX% to The increase million in operating as QX QX, steadily in for to at Revenue QX has to operated Our $XX.X $X.X QX. in reported in income on Africa straight continued QX. quarters. for seen vessels utilization QX to SPO resulting the additions. compared QX. region of from

increased anticipate in regions, costs income legacy decrease to we in and the rates the from quarter an revenue QX. are in resulting the from QX resulted day day SPO pleased $XX,XXX vessel we operating However, $XX,XXX to higher newly effect in increase or of effect with The in XXXX. QX both from We previously the of revenue encouraged to day along increase rates, day of full in quarter-over-quarter In additions. Tidewater summary, And per lay underutilized vessels to continued in see costs SPO from of positive increase higher per and stacked COVID-related signs driven are day to acquired by continue of reactivation vessels all through off market remainder our activity. rates. a see

to end see with COVID-related see we 'XX over remainder With forward virtually expect moving indicators and We issues. of encouraged Quintin. it back anticipate and XXXX. related the modest the to I'll turn that, remain lay costs off We for the leading by into XXXX costs very of to

quarter's On meaningful I what uplift. remainder XXXX a expressed into would want the call, see Thank confidence of and last I some the half to XXXX. XXXX you, our of provide back Sam. we for that closing, In of mention

strong On and the heels of a we're remainder view fourth the what seeing on more third quarter positive. in our the is XXXX incrementally of quarter,

classes having For is vessel backlog continually revenue our across the of remainder a PSVs, $XXX improving million. all split at fairly of evenly with our market. the most XXXX, cover to Contract our stands exposure largest

This for We plan will offshore as Commercial all up staying stands and cash strategy continues our of XXXX, revenue move supply improvement into chartering drive XXXX. it activity allow by generation shareholders. continued at appears that, open in customers committed from Colby, last with to what, and ultimately we we to fundamentals. will quarter. on day attractive take million $XXX accrue our As of flow and advantage plan questions. up remaining for in leg for another backlog sure million to be momentum And accounts, $XXX continued that our up rate earnings demand will to

[Operator Instructions].

Your comes first Fredrik line of from Clarkson the Stene question from Securities.

performance flow cash very -- wise strong on and just Congratulations wise. both -- on a quarter,

we're your I saying potentially shorter that improvement of to So terms into edge you kind on rate on chase that strategy to leading or wanted bit contracting be the to you really day a keep properly contracts most but a across seeing dive around not now basis. chase want play to able markets

in fleet So short-term previous I strategy, faster move the around day into to in put some versus much comments Are we be forward was give the trying and that are second upcycles wondering, see for year improvement you've that the as your seen seen of well? you fast able a to full that now quarter to that would how perspective and we've just move -- able guidance on across chartering you what the to rate given able quarter? how third typically

on sync perspective, to -- a look very and well, ask see as then in going what to I'm lean into for Piers going classes have over you my beyond. outlook give really Obviously, 'XX we I'm and all and up. as and hopefully, perspective his vessel we look we bullish Well, the they'll

short we're XXXX. I going into us vessels, for XXXX. imagine very to that's continue charter successful throughout so been -- larger And continuing And on the and particularly to that's

vessel As illustrated, larger is in tightness the up under that. just rates Piers the the market naturally bringing category in

just the particular. category deck PSV square So meter under XXX in

advantage we're what And closely, there. actually watching can to lean again, we that see out as too. into may so chartering take as back that of And subgroup and certainly that well category we the of just momentum market long

lean vessel, we you We a that the fleet bit think of substantially a every think than contracting better some little and tugs lower right? into bit smaller dry the are I'll to fleet, longer a XXX disproportionately But and put is end we some ago. years a PSVs, do older more had But X have look what and certainly of conventional difficult vessels, because to our those just I X have greatest as to vessel fleet little is not work. I there

So let industry. knowledge on me hand real it over to Piers detailed because he's that got some

Yes.

Quintin lean vessels, majority less is of think fleet lower-spec shorter slightly at I Just We've to we the obviously contracts. now a we've higher But into to longer, reiterate, older, the spec. as of gone been on mentioned. sort able our much have

believe to around pushed the able they push room to have short been possible, a as everywhere. the optionality we really. is to as something that's much focus customers is rate market our -- which for the of But it's to at that's globally as last years, well come think continue I opportunity doing We that. had and an push moment, back. as stay in the lot frankly, into us to which And there's we've continue ultimately, on contracts rises, And improving. XXXX. opportunity best keep they've more doing as shorter-term been they've Our to for that side something we've way strategy the go on saying, not we'll as the And understand X that

base. agree strategy, push they they something our which a customer certainly accepting it. And So that's with around matter, on to from it's is to focus to it our we're But initial or they're whether coming to continue but doing. be back going seem not some different

a rate here. just on That's helpful. side the final And follow-up day super

on the seasonality But I typically comment on way the you there's still could of positive that very as during think you quarter. and some I first terms -- be in fourth think well? but And forward.

quarters? So about materially still the is day impact way any it, going upwards? weakness over going particular how that seasonal, it to next should move Is to we call average X rates think potential

and North really XXXX. continue handlers, into for we as talking I specifically anchor tight about Sea we market but the HTSs don't to go very see a

to some market into anchor year, saw be with tight Sea seasonal little will the rises. go see there but I a down a North to we sure rate expecting very QX go slow you as fully for tends bit, mean, I'm handlers. record So we're last rates -- impact,

see continue well. as We expect into as -- XXXX to that we that to see go

next from comes Your Evercore the question line of from James West ISI.

going right conversations, for curious productive the amount the East oil offshore. watching getting in of particularly capacity, focused to somewhat the gas, come I this, in we're lot which client right announcements a and quite market of to both is rigs for from increased And is on and and market. your vessel an suspect unprecedented left seen the happening now, off you've of snatched support thing of same So Middle

to urgency I'm and showing in market region hear so that is are opportunities that they're curious the into if over in guys providing what And seeing sense for you of what of well kind rolling the rig kind as the vessel of market Tidewater? that's

tell you just back I'll Well, from come that. Piers what

going I'm it hand him. to So over to

Yes. Sure.

So yes. we're --

the our which -- tenders back in on of also a of which is amount Aramco, as also under we've think, LNGC significant India, are this. Middle as coming mentioned, driven in we region Aramco Qatar seeing a well. what out well East the activity previous coming falls seeing of in by I been There's lot we're of in So well, terms call in as

mean, to the demand want or the activity to the of us to So a to allow rig able is all going that of find which going different yes, going as only lot in all well. discussion, terms to a that's rates, not but they they're we seem to be vessels of push there's a lot mentioned to activity. whether support I be

a on asking everything there to sure if of demand not I'm lot. a hold there's they're asking they're lot potential going lot the that of and a to they're activity well yes, for for. get So vessel able of side as

So but that's well. a that certainly as focused it's moment on at ourselves, positive very -- the a we for see an as we're thing area

assets, the mean, do, of than a that better providers? of what you hear. to asset to of much historically I a the much That's lot has as Middle seriousness lot of the been lend is a not vessels given guess, from East, quality they NOCs only well important. that performance for for is the lend more you Okay. but better great Tidewater a Does in than and hearing becoming competition? local -- want Middle has And services, I put some that. the given rigs scarcity more not the that position Eastern And and But does -- I'm known becoming then

compared got downturn specification owner got Absolutely. least group market happened vessels and lot generally at We fragmented talked those is than the to more Sea about the neglected being of a lower what a that North average and And even the during neglected. vessels, vessel Brazil.

those the very and types so repair has high. equipment for And down on of other failures been vessels

with too. in in invest best for continually feel vessels great work we our region technology we in the been we able call the like to So Saudi we're Aramco continually operating. the on to spec in we've vessels. And invest position to the been a develop others because and able what We've

helps definitely substantially. out yes, it So us

from Your of Stene next Fredrik question comes line from Clarkson Securities. the

briefly touch on M&A to wanted Just well. as

already, synergies play think see do starting cost in end you progressed SPO the the with but you've think churning you vessels you're having older mentioned acquisition, I come what some still well market that that those out with current to out. environment. we're you're And

in on I role be starting what more side. here? markets within bit think M&A hand both done general here? And is there get are SPO a equity still Are the your the also to second things and traction the to

done. that think is there position. And are we a be more to in Well, I definitely great

focused use to delivered, investment. put work. in the got fact, in point on at on got I'm some return And very -- could -- this currency. a believe great equity We've balance I we cycle have obviously that okay? to We so we've sheet We're where a

to And to yes, there's so the to doing us we're a it. from able that the industry. do next be but where these now of But in participate to ongoing lot for we done still our looking very clean we're deal. integration be SPO on point appropriate And up about none excited the vessels. distraction it's a have talked with that is call, the pricing at We the on

execute we into to forward remainder looking go as XXXX of able So and through to the being 'XX.

back no remarks. I time. further this to now the closing Quintin over call turn are for at There questions will

you, thank Well, Colby.

We will update you March. again in

So thank you. Goodbye.

This conference concludes call. today's

You now disconnect. may