Tidewater (TDW) 3 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Dee, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tidewater First Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to West Gotcher, Senior Vice President for Strategy, Corporate Development and Investor Relations. ahead. go Please

Kneen; Good Quarter Dee. the and to Commercial CEO, welcome this Rubio; Officer, Thank our and Earnings morning, Conference First Chief Quintin and President XXXX by Piers on Chief Call. Tidewater's Financial morning Sam Middleton. you, Officer, our everyone, our I'm call joined

today's the plans to other make are risks any There recent materially we'll comment call, are SEC at factors that today's tdw.com conference that XX-Q these we implied call. and available XX-K expectations. may statements sec.gov. documents refer that are stated performance forward-looking for by uncertainties and and most at making company's and on different our These from through details During website certain on during referring be that factors. or to cause the Form additional to actual Please our Form or are and our

both on you're the May any only this accurate at Also our we'll measures. in financial as earnings time Information the any found speaks no be A located today, can may present GAAP during tdw.com. to that information call, advised replay. of non-GAAP non-GAAP and reconciliation measures releases press call longer our website presented Therefore, of be GAAP at on of XXXX. financial XX, time-sensitive

And now with that, Quintin. call over I'll turn the to

Welcome First XXXX Quarter everyone. the Tidewater Call. to Good morning, Conference Thank you, West. Earnings

expectations. exceeded day outperformed meaningfully First and and expectations. our Both margin quarter gross revenue our rate utilization

performance the from a calendar typically given pleased slowest We of the perspective. year activity with as the are quarter first certainly an is

this which for later busier to regions, impacting our factors prepare our the year. drydock season seasonal schedule, of typical serves operating the front-load we work the of take advantage to few period in fleet a Given a

but cycle the day the quarter. on slow the seasonality. the rate calendar from of more This the The through seasonality growth. momentum rolling quarter offsets of handlers, rates it rate not quarter sequential the there, our fourth class expectations, exceeded this sequential each is but was classes strong Particularly overwhelming This than strength contracts with for higher day typical period effect. average the rate our first fourth regions Day class increased is third quarter still and across exceeded improvement only of exceeded composite quarter the in to consistent of during this a our year broad-based posting anchor class large about vessel up momentum first the vessel for XX%. with multiple rate was the

support and of seasonable, handlers primarily in quarters. typically the to movement periods the Large busy and mobilization third drilling most anchor and used more are rigs the second benefit favorable year,

continued the results leading-edge that persistently The new the quarterly of the quarter average printed first day handlers will first contracts quarter -- rolling supply and results also onto that indicate of large is tight to vessels all continue anchor also up rate. drive

subsequent additional we During the the million of open repurchased $XX.X of and $X.X first the million shares quarter, market. we quarter, on open the to market end the an shares of on repurchased

of million $XX.X their to market. in lieu compensation then just shares issuing employees associated equity that can employees with used open we so the cash those benefit they repurchases, of market the of vesting shares open the tax to the buy addition those In from into pay

themselves. that shares. of our to intrinsic repurchases allocation other both and share of So view weigh may the the we'll by relative capital We repurchases, used opportunistic to reduce share and cash other capital continue of million share of count year-to-date, the the shares XXX,XXX to value on $XX.X allocation against remain we've against present about opportunities opportunities, merits

have far, our capital. of use pursue but been We acquisitions, the value-added thus continue share to repurchases most

geographies. but America, companies for remains in acquisitions located we in North South focus and remain on all Our opportunistic

with a pleased build the on of offshore tightness lack first very business acceleration the are coupled pace with and the during during as optimistic remain activity. the of of we quarter, activity and opportunistic vessel persistent result continued in we the summary, supply the performance quarter first -- constructive we of In indicators the observed leading new

We free flow to into will generation, continue shareholder alternatives deploy and remain we'll focused capital driving on those maximize that cash value.

And me and over for financial call the let outlook. West with that, back turn our commentary to additional

you, context program. on our repurchase To some share provide Thank additional Quintin.

of allocation an allocation We amount trade on million are capacity. the permissible opportunities. repurchase market, our capital philosophy remaining maximum by our beyond has repurchase provides flow outstanding the generation pleased our of combined value authorization existing shares the that represents where repurchase our of free This date, capacity. share The agreements. incremental been last $XX.X relative share and additional competing current $XX.X our to of authorized shares Board and Directors capital governed debt announced for million with authorization cash announce share capital program our intrinsic authorized . has authorization, To to the structure under from debt or our our authorized

a guiding the the and consistent. capital we philosophy capital steps us allocation a Our our believe establish cyclical long-term capacity. of a to additional more to allow structure, is capital shareholder of flexibility business is appropriate and for an principles which evaluate structure return reaching point our to capital remain debt for current at for there complexion will Irrespective of debt structure, opportunity

rigorous we most to We value each opportunity will of relative look capital. our of pursue in remain merits the the at uses accretive evaluating

cash about addition, remain decision we In mindful allocation make. for a quarters in maintaining our capital balance any will a of line of we X clear net to sheet sight position

to busier as quarters the see of approach supply improvement about persistent quarter, year and day continued with into entered the quarter day. first term through during nicely contracts activity of we continued as to anticipate in progress the months. leading-edge to We XX improve year. tightness leading-edge average rate momentum $XX,XXX continue the rates an duration in will chartering given the day the We During that per we we X vessel increasing

can that We confident rate on $X,XXX to remain year-over-year improve average approximately day by we basis. per day a achieve

$X.X our of revenue we year reiterate billion gross to guidance billion of remainder of margin. full $X.XX XXXX, Looking and XX% to the

unplanned we through the slightly mobilization the second step-up fourth revenue of in QX strength As year, to meaningful pull in and a third in the of continued performance the quarter some to now and few vessels quarter quarter. increase maintenance some and revenue forward still the in second a quarter. the to the into progress anticipate we in We revenue better-than-anticipated due drydocks, anticipate

expansion maintain QX to our points the margin QX we gross rate Similarly, gross expectation QX to up due factors about of but described, in in relatively enter and of margin XXXX. anticipate continued margin fourth in expect well the margins expansion XX% of exit previously in X quarter. stronger flat we is us expected as what market in even an be Setting for percentage

at classes remainder Our with opportunities with to the anchor the days million the revenue of of PSVs of the handlers of backlog year. for remainder of about sits having XX% our of vessel available currently repricing throughout remainder the contract $XXX the exposure year, and largest XXXX, contracted for most

turn commercial landscape. Piers the With the for overview of that, to call an over I'll

and Thank everyone. you, West, good morning,

strong, the regions we market drive expected upturn little a our rest year demand incremental about with for This will the remains for the the investment of in out I XXXX. outlook out look in talk what the additional beyond and of project are as continue to OSV quarter, ongoing Overall, each seeing we into XXXX. to

for few for far, based And has was in so further outlook the as away move in with tightness reflected years. exacerbate that contracts the tight up about short-term period, see to day this limitations over average been in remaining XXXX. which on space, same new has vocal reflected XXXX any furthermore, QX length we the QX our the current balance the the rate the While market, global our to And we've the pushing $X,XXX this supply the per again, compared OSVs X-month positively charter been XXXX. fleet by we OSV QX for our very in our from almost additional by in been chartering to rates day of fleet in our need strategy will saw QX composite no last supply-demand

Sea regions in the a year, the little with which up to North of months for various not is market few our pick PSV first has and slow starting been through Europe. QX. The Working spot unusual

they on with stronger was have term QX market make year of cover the in periods business, in demand both offset to through the coming charters U.K. the and sure PSVs, by and necessary that busy over summer the side QX. the for However, the Norwegian sectors early to the and

now are for the that XXX,XXX number On year. anchor above the drydock handlers we remainder in per strong QX, large rates which were handlers bodes and larger activity the in support saw anchor our region. Senegal, the large plan well indications anchor XXXX, and day to hitting with reported in projects of increased of predominantly requires Angola, for in of GBP delayed start In drilling for in by the we mark schedule PSVs XXXX during QX busy even and the Namibia Africa, region, our which had with the the led a handlers,

in we slowdown drilling and second restarting of Africa. in into in XXXX in move expect countries rigs force the XXXX. again region see QX into demand to We We as the different in full as drilling some half repositioned out

some with the short-term East, in Middle slowdown, in Saudi the news see demand the specifically related we Kingdom. work may Arabia, In to recent

we countries any as supporting experience Saudi Kingdom ongoing we that from slowdown However, demand in requirements continue more reduction from near-term than rig Arabia. expect in that the count the offset see well region projects we a in will may already as to from significant contractors the other

they with as already into as fill by this in The regions. affected call, our we others tightening been a might other fixed further vessel tight still the of through requirements. to a Mexico had Brazil in with demand already tonnage from of U.S. mentioned Brazil, on expect limited of relatively last quarter been Petrobras have to world fleet as XXXX, majority the Act in in of s***** QX. slowly remains soft being we some requirements And see new the with strong, in Jones the number But Gulf Americas, region. by dip demand led areas haven't long-term try our their In

quarter, with Australia go Australia that XXXX. to Pacific, should through will Lastly, signed new the in off in of Asia support several activity contracts QX way the were up demand in in current in all drilling the the kick Taiwan region and key into and drivers

that out positive XXXX, continued out pleased organized which further going increase other very how region bodes several broader right we market end XXXX, XXXX, to see getting also for starting all the the and Looking the way the to we're and drilling into with expect NOCs to through of momentum in to we're of starting Overall, well direction in activity forward. the QX, XXXX. region move has into continue fully in year the to the

hand you. And with Thank I'll over Sam. that, to

Thank Piers, the will XXXX. I'd morning, the quarter At financial of this to time, first like focus results good to XXXX take compared and discussion you quarter-to-quarter primarily quarter on My everyone. through results. of you, of our fourth

noted to quarter Active of quarter first generated quarter of our or from X.X%. for $XX,XXX utilization revenue. net increase main $XX,XXX QX. we Average rates XXXX, was the the yesterday, million current for of day quarter million $XXX.X release in $XX share. $XXX.X XX.X% quarter filed As the an in per in $X.XX XXXX, reported at the fourth of unchanged day increase X.X% we of million in first the XX.X% by the per driver day was the press in per revenue increased compared in the to in quarter, essentially income In which fourth and

increased margin margin than increased The Adjusted to million in as in in quarter XX.X% day Our the there, weakness. QX. EBITDA first compared more QX. is QX $XXX million in effect. $XXX.X The weakest the but to traditionally due quarter our its million offset rate Gross positive compared average was seasonality in to QX the the seasonal year mainly from still fiscal gross in result for to percentage QX. is million was QX $XXX.X $XXX.X XX.X%

into $XXX.X operating Vessel due region, million the our environment. operating compared $XXX.X to Australia higher to quarter higher QX. for costs were increase cost vessels is as is crew in The several which we costs primarily million transferred

cost in the that we in costs The consumption and our incurred addition, costs incurred mobilization crew also first In day compared fuel training higher increase days day increased operating drydock marketed fourth higher-than-normal quarter operating and vessel the to quarter. increased in the period. to per $X,XXX we in per $X,XXX

we for reported gross quarter, continue in of most sold our remainder and and the billion based $X.XX In XX%. mentioned billion as on to fleet As our total active estimate quarter be we of on revenues compared in of costs. vessels. from to QX, $XX.X look margins We of to and vessel on sale net the generated the operating vessels these due X million to $XX.X $XX to proceeds recent of of the revenue year, million $X.X first the sales, income a to be by operating gain increased range previously, to forecast, we XXXX gains million increase primarily net offset an and $XX.X million partially for higher the

million, for due costs primarily personnel higher $XXX,XXX G&A QX $XX.X to costs. first the quarter than was higher

costs we approximately to million drydock $XX being cost to days In drydock million the is about expect incurred For X%. of in going the a still this year, compared $XX.X of days, In million, we first incurred to the year compensation. and quarter, the we see our This the year QX, heaviest. G&A in X,XXX with -- XX affected more in heavy stock half than be by we QX. million which still noncash utilization deferred be includes $XX.X $XXX the drydock quarter, first

expenditures is the water QX, In be capital installations, Drydock system million. expected $XXX upgrades. related year and we also IT million $XX.X ballast costs full DP for modifications, incurred treatment to XXXX vessel to in

attributable year QX. generated flow million $XX XXXX, to quarter, flow free more approximately full generated operating cash the was is expect which For We cash capital to million in cash primarily activities. expenditures. free we million from incur this $X.X The in of $XX.X

$XX.X Our was our in in more vessel million $XX.X sales capital expenditures offset by than proceeds. million

We $X.X quarter, were taxes million as grow during compensation. on throughout continues vesting stock $XX.X higher of quarter additional million paid tax we payments increase filed tightly paid shares quarter to spent market. million share increased in prior increased returns to capital million year, shares $XX.X The grow open of the in spent were will an Cash revenue the prior the increase first final investment but is revenue. end tax of the this for in million shares made the because Working as due in to activity, taxes the as receivables as capital the but $X.X the to possible. quarter. manage compared Working year behalf of the we with will We relating of issuing lieu authorization QX. purchased and repurchase our announced stock $XX.X on in subsequent employees in cash buyback the under first to also

number used Year-to-date, the market, we $XX.X the of by in and have reduced to million has XXX,XXX shares. shares cash that approximately account of reduce the

cash the performance We accelerate. continues to improve as our to expect to continue business flow

to regions. like now the of on focus the I'd performance

vessel $XX.X in X.X% drydock decrease due rates operating QX per higher to revenue Day QX. The X.X in higher Active $XX unplanned transfers utilization operating operating income for driven to lower lower $XX.X QX. due to from quarter of region, primarily to fewer by reported per region the fewer in XX.X%, the region Americas slightly X compared number to operating $XX,XXX in QX income activity. which utilization for operating percentage the million other operated XX than QX. to income due an of day million to costs compared of points million to was was repairs was the from The vessels revenue the in $XX.X The region and reported the of Our quarter, X in $XX,XXX to the resulting for increase than drydocks. due vessels in decrease quarter day QX increased regions. in million

we $XX.X million reported quarter, on million prior QX The vessels increased XX by significantly XX.X% in to moved higher of profit the million million and day operating the to vessels was The days operated XX.X% compared $XX.X Average from QX. per Asia compared quarter QX due an day higher operating QX. QX to slightly $XX.X into the in immobilization average region per of which in to QX. slipped the couple region $XX,XXX reported in compared up active profit $XX.X day the region an revenue of vessels, For to from to Utilization rates quarter. of activity Pacific first first in drydock in in the as area. mainly a $XX,XXX XX% X

the due The the income in to by increase vessels was higher to partially the due increase costs the operating operating revenue, X to region. offset in added

to reported revenue $X.X reported the of first an QX. to compared profit compared quarter, steady Middle the For an and million vessels, region operated quarter-over-quarter $X.X in first operating quarter. The of region prior million in X quarter region of $XX.X QX. East than the million million profit The $XX.X XX in the remained operating fewer

XX.X% Day sorry, QX the quarter -- QX. $XX,XXX I'm close utilization slightly to Active per in utilization rates The day helped QX. The in in increased in to to level. in to from $XX,XXX maintain prior day revenue and decreased increased rates QX XX.X% day compared increase per

decreased unplanned income costs training primarily increase to and in costs. the to due crew operating due However, operating higher-than-normal repairs

Mediterranean $XX.X QX operating of Europe million in QX. to profit operating reported and $XX.X of region million in Our compared income

we a QX, in in in activity the area. see Typically, drop

$XXX,XXX $XX.X utilization, $XX,XXX higher QX percentage increase day decreased approximately an typical day drydocks day saw decrease only million saw by due to unplanned our million $XX,XXX QX to $XX.X Despite the Utilization we helped from outpace day per maintenance and in in we QX. revenue rates seasonality as points QX. to compared days. X rates decrease XX.X% in to by to per in XX% in However, from in

depreciation quarter the costs was essentially revenue XX in region operating same mainly profit QX. flat. the driven as the in remained vessels quarter, as operating The lower by costs for operating and operated and increase The

million in in QX. XX million in average in fewer on $XX.X $XX.X incurred drydock saw very XXX the per The contributed region continue million to million of the compared utilization. Africa days increased rates operating increase The to Revenue to compared in $XX,XXX XX.X% of strong. region from region profit in to QX. West QX. remains QX as XX $XX which in reported QX in income QX by in QX to XX.X% QX, this vessels from area Our impressively utilization mobilization increase to to increase drydocks we in operating profit the days increased same XX.X% lower costs market $XX.X from fewer day operated The in quarter. for to QX. quarter, a Active day XX.X% increase operating Day of the number lower coupled in due primarily in from the per operating $XX,XXX resulted and QX. QX higher with The as revenue,

In QX utilization indicators summary, with more than seasonality. to this cash day we are increase free are on our due encouraged through and the focused We lower offset results observed and we remain rates the pleased profitability. but of QX leading generation by in effects flow in seasonality, normally typical solid this period the results. the the quarter, we remain will and has

over turn I'll it that, to With Quintin. back

And All Sam. let's right. up it for ahead and open Dee, you, go thank Well, questions.

[Operator Raymond Instructions] of first the from from Rollyson And James. your comes line question Jim

the given seasonally seasonality especially are I'm leading-edge But leading-edge busy how quarters, given is typical. the year, keep Quintin, the kind seasonal should rate kind rate the way just the kind to over rates cetera? balance normal during obviously, they et which, think pretty on of improvement I up when what doing, setting curious of X the look things of at of season, your view activity the on of is impact, the your of we results -- highlighted. change up contract the about Impressive you pick last slowed, guess, probably has up moving of you've rates, factors

through year somewhat just It you. as QX are go those and globally. muted QX the weakest thank periods the Jim, you is because of

is quarters. And always off So QX a last probably substantially year over this at XX over went would doesn't years a see through right? into up What that go it's started rates has X and to it's But that time. I surprise kind last as before, QX It's X accelerating been improvement QX. know. we limit about see grown It's then saw been goes of surprise seeing in There to we'll up that average the and to it last and been me 'XX anticipate of these generally, it more as to certainly to the a on we years. in on leveled that and bit quarters. $X,XXX hard to year year a what of the so last through increases overall moving to about this little pace the I ramp X wouldn't meaningful in 'XX pace and But now over we number look X rate past acceleration a we is QX. at it we've $X,XXX, year And me day for $X,XXX, has as well. the couple $X,XXX for

Got went come as different And through it. Piers, do X out X kind similar geographically. next the you growth point? or over to the at some biggest where hear things And this the a in years, regions of on you look as going regions. you what's of curious we from anticipate That's helpful. I'm obviously follow-up,

areas of I it's think are all what looking not think say, different the positive. we from I very much sort

like that have NOCs We a been to up, tend Asia will little slower looks in talk starting it about Pacific I that. to going think see be forward. they're bit but strong pick to region the

Brazil out has out be XXXX. Obviously, to the and So to to continued has putting area. I that's strong Petrobras think one looking been continues -- numbers

area looks continue be a well. as that strong like So will it to

positive. it's think all I

Southern in as in as of continues there very those the as going lot well work sort Africa particular X areas. on There's down a look So well. And standard are of positive Africa to well. down

is I at bad it. spots would no moment there's leave how So the

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

structure. touch the to upon I want and themes, starting capital X allocation with capital

more has grouping a an together would has would bonds. getting last all about of cap more kind debt Is a you're like changed for And streamlined that since that maybe my around own long-dated facilities something look your ultimate time? changed that larger, your talked head, entail in thinking or how typically that structure. current You've structure

Fredrik, a for But because a debt from over lot strategy certainly to West to been to is focused structure needs from with of going capital business. cyclical a Good debt of question. hear he's thinking perspective. one the that's things thanks us capital structure the that creating I'm kick you. it doing for of we're consistent the on

you West, current So don't on update on thinking him the why that?

Yes. Sure. Fredrik, appreciate the question.

So I is guess years structure today certainly, pieced get the to debt debt refinancings has acquisition. the of kind like that cyclical a here way capital the what it and we're thinking more the been we're business together for appropriate we'd about over today through to structure is in. capital past And the

the in where I opportunistic we as well both to market, debt here shape in in on feel home the relatively be we in we capital guess, constructive. as in have position ways So to the the capital what evaluating observe markets, appear the, today going your a to can be forward we're flexibility U.S. structure based market

of nature. aren't any We near-term or maturities anything facing that

approach judicious to that we So and makes but give to believe want be where we it. it that sense some approaching time do we how thought real thoughtful about are we to that,

supportive capital structure, structure ultimate to our it But environment efforts begin of So debt still of capital to our remains case seen. evaluate to to feel which that the be debt is I is we that. think and complexion an

generate of you to I back if how on to see in you alluded utilize helpful agreement. prepared very share you spend that on fully generating flexibility the remarks, But ultimate of repurchase and goals And least that, the numbers. think during color. going I around didn't, QX, your my cash the are here that is you more the at one to have That's is

second You in accelerated the a bit quarter. now

doing I think approached instead think example, for price you regions the dividends, where wondering $XXX now share would to that buybacks. you of would that's if share has the that that per one of was switch you share But actually

allowed you done how and have allocate is -- So any capital that thinking baskets would under to currently? between around ever share you use you're the repurchases dividends

from just of the it's the see the our based very business. Well, see anybody limited, optimistic but on certainly the to right, higher we give where don't Yes. outlook repurchasing I shares you're what than also and today. value we're And the any EBITDA the think want growth we're point trading flow is, that about But currently indications obviously, but yes, when acquisitions. value I potential cash a of is for generation there's you intrinsic

have now, been I've right acquisitions. So value more repurchases on more because focused those than been

However, as quarters. next become several attractive we the acquisitions go through may more

of maintain a we'll So things. all focus on those

will in I had I share But role. So business cash I to of would and off all say next the much going be acquisitions. that a focus on there's couple my dividends of value-added play druthers. would this coming still so years that repurchases, acquisitions

from one quick one, And Super. me. final a

very you of the to of least means that expectations, step-up previously kind I think in ahead second what the a quarter the than everybody's quarter maybe be anticipated. you guidance and beyond bit do that back less range? on tilted your go end think or going above of this strong And good. chance the First was which But that first is a at of now there's guidance that will to that you could quarter performance, high

Fredrik, certainly anchor of spend with the time variables you're Look, so and North our a we of look, year, aware internal Sea But West forecasting. in again. on lot handlers within there particularly as it's are forth.

and prior that take that. to bottoms-up robust the kind think calls approach approach, recounted in I we that of we've

this to we juncture, today's the on we So call at market. what feel what is and articulating communicated comfortable to committing

of line from comes question Smith David next Pickering Our Energy from the Partners.

in XXX margin in I improvement quarter. but for QX? that relatively third behind if QX second the that I but the details hear Sorry largely second more downtime Is in minimal impact that ramp margin rollovers? missed Just make prepared remarks, heard versus basis that is any flat if the in And the I correctly I disproportionately to costs correctly, the sure color margin the step the point to please. vessel did vessel the third up quarter, guidance and or due of it a then wanted quarter, and contract to timing

Yes.

the So Appreciate it's Dave, West. question.

into how answer variety that, the I that. definitely the are contracts of rolling you directly, I impact is is -- Certainly, that from your little impactful. did characterize a vessels the think of can QX, we year There talk about of forward QX question in yes, prepare as to bit maintenance. for do QX a perspective. that items busier guess, margin and seasons. unplanned progression of a early to as tried some A to are we We the drydocks couple coming and we mobilizing which

think items of combination when and continued those at a pretty alleviating I combined, look impact So the as some get a of QX, margin contracts material you that into from of those perspective. rolling has a you

question comes from next the Jayne from of Daniel Josh line Our Energy.

Gulf QX, of you next talked thinking XX months? calls soft in XX market far, of bit Would about you strength to of first, a Maybe conference respect the how seems with you not agree thinking just that forward. And and specific. necessarily little sort Gulf XX the being the on next to Tidewater so the months, over But with of -- just rig a over it how the be activity that XX that to are should Mexico about you're pocket going drillers also?

Yes.

probably the probably which as right. QX, I I there as a knocking think bit. QX think We're was drillers they're see slowdown well little that -- it, saying certainly there's we'll a through seeing -- probably into in that's are

get with drillers some organization that there's the we're right think of rigs I an the in to seeing place. the piece

negative we're So not the about Gulf. certainly

slight you'll rigs areas. regions, as Sometimes of you reposition certain see get this people sort in slowdown into a

forward. we're yes, we positive So going

a maybe just there's much it's a we us been little slowed where quite I sort as not, activity couple as people little a as as I down expected. a of that it -- bit, not affecting much quarters bit. and mean think saw we perhaps coming it's so of said, have

the normally. be issue. a of we term. short-term done a to we longer we more bit expect It's area this So fixed down But than long have in little Gulf slowing don't

within when that's talk talk going you would I terms of certain mentioned your entire the a and about and then how thing if view fleet. the across And you conversations et those you the those, longer-term contracts cetera? and nature brush customers X-month there ultimately about not are other for things that how you rages opportunities are Could with chartering short-term on broad strategy, assume

the and regions, to a of side our globally, you shorter just our the lot go customer our market in on wanting want still no, Yes. I still of bit definitely we're to to in runway there's I of we customers precluding little before, said contracts. driving are We're incredibly longer-term contract strategy choosing tend we a out durations. not in do side a but customers and But seeing the rates, important in of only ex-bill for about getting mean feel coming than because that, fence certain this not we short-term tenders, customers in long-term our our also terms, is which rather lower fence, we're optionality driving to more term feel it's we've make think keep which market. part our

Our of next Elmaghrabi the Sherif from question comes from line BTIG.

if called was of release, case drydock the apologize out been the drag you questions In X% the the the think QX for should How rest have of I asked. drydocks press on we year? my utilization. about

Sherif, the question. that but it's bit correct? dropped, line about a drydock was Is a

the the the Yes. affects year, rest that And utilization? of cadence for how

Yes.

the of year, rest it will in we're of think the mentioned second on we the to going the then call of the off for year. utilization I year. that the heavy the first pretty be And half drop So half

So hopefully -- some these you'll down go drydocks, the timing normal in the that X%, of X% will X%, right, to depending of see overall utilization. instead of the on to

a more the supply I'll there esoteric on Okay. here. from effect an regulations. emissions then bit go book Is And

are maritime getting For extra Europe's work, the example, emissions costs for -- operators out rolled And you're little consideration when a about a I'm emissions can in are example, new if associated with the rolled tonnage? a anxious trade little the for trading be what scheme. rates that's looking reduced or if securing North Sea, wondering

for No, over tonnes. tonnage and I certain European vessels primarily beyond over issue a size mean 'XX going it's is and X,XXX into

So most size. don't of our vessels that hit

at esoteric, fuel-efficient the I customer most And they to has. it how affect in think XX vessels mean, say if obviously than wants the talking anybody can I more our hybrid base emissions. So we're But cut time was fleet, we have the vessels. have generally, us. why all looking I would doesn't I That's else

at obviously from we're material But a government basis. a to global expecting globally. seeing looking not on perspective So business a see a pushback that well we're as as no, we're from -- anything not

from Rice. of Johnson Don comes the Crist Our line next from question

about of production ask just what and drilling how the is skew demand of pace and kind kind as that move balance the rigs today forward FPSOs out wanted between coming year? new vessels of your we to I could kind and throughout of

the Yes. positive I coming out. heard, of mean on FPSOs as we're amount probably

the plus and think get of obviously coming numbers I think in the I numbers here, I XX may Rystad's X-plus out XX-odd which but with wrong come next is out forward, years, positive. look as expecting we FPSOs

more type we and as so -- supporting then know, XX% of has how fleet But terms drilling I added bit the little XX% is, I subsea a we're color don't got drilling we've that's our In in And normally, well. say well. XX% -- XX% current from I'd moment think skewed I our production on side. as to work. mean, at we say some Quintin maybe construction some that towards there obviously around

It's in higher drilling be not elements towards vessel, the into clean And two It contract there on vary throughout the they're moving right over Yes. someone the But production a we just is its focused the varies now. over when cycle. certainly drilling, always will it chartering between have allocation could break it time. some don't because a always support life.

was indicating Piers So XX-XX.

rigs, generally production, that. a other XX% that other, XX-XX. which drilling probably ago, the elements is FPSOs, year So was like construction, offshore And XX%

of pandemic, the Okay. depths the In it XX-XX. probably was

So point surprise at it over in It go it me it that wouldn't normally definitely at weighs if cycle level. higher XX-XX. and doesn't stays this the

level point. should this the we mean maximum allocation about at of I be So at

about FPSOs demand the require from bigger standpoint, a generally market just speaking, And drilling the same as type rigs, right? offshore vessels of

looking But to you the the yes, depends on handlers PSVs some support at anchor It some are, mean Yes. on depending well -- some as FPSOs and I regions. generally, sometimes. where you're

more the over back conference for closing I turn will There remarks. now no questions. to Quintin are Kneen

in the to call again and Dee you, you We in Goodbye. look updating Thank forward August. you, thank today. for everyone, participating

that Thank concludes today's and Ladies you call. gentlemen, all for joining.

You may now disconnect.