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Court rejects FGH Petrodrill contract
Friede Goldman Halter, Inc., today announced that the bankruptcy court has officially rejected its Petrodrill contracts. FGH stopped work on the two Petrodrill semisubmersibles in May and asked the bankruptcy court to void the contracts.
FGH says these two "highly unprofitable contracts caused substantial losses to the company and were one of the two key influences ... which led to the company's decision to file for Chapter 11." The other was the losses suffered on the Ocean Rig Bingo rig project.
FGH says that by virtue of the court decision, its contractual obligations on the Petrodrill project are terminated. It says it filed for the rejection of the contract following unsuccessful negotiations for the terms of completion of the contracts with Petrodrill and the surety, Fireman's Fund--a wholly owned subsidiary of German insurance company Allianz.
"We are pursuing alternatives with Petrodrill to help them finish these rigs," says FGH president and CEO John Alford. "We are not opposed to alternatives that may be offered which would help them finish this project. Earlier this year, we were successful in reaching an agreement with Ocean Rig ASA in the completion of their rigs."
More orders in pipeline for Kvaerner Philadelphia and Austal USA
Recent Title XI applications filed with the U.S. Maritime Administration indicate that two U.S. yards could soon add to their orderbooks, if the applications are successful.
Another Jones Act operator looks set to follow the example of Keystone Shipping, which has filed a Title XI application in connection with four 40,000 dwt products tankers, worth $68 million, that it plans to build at Kvaerner Philadelphia.
Now AHL shipping has filed an application in relation to two products tankers, worth $141.26 million, that it plans to build at the yard.
Meantime Viking High Speed Ferries, Inc. has filed an application for construction of four high speed catamarans worth $126 million at Austal USA.
Seabulk posts profit
Seabulk International, Inc. (the former Hvide Marine) today reported net income of $2.7 million or $0.25 per diluted share for the quarter ended June 30, 2001. In the year-earlier period, which included a one-time gain of approximately $7 million from the settlement of a lawsuit, the company had a net loss of $3.3 million or $0.33 per diluted share. Revenues of $91.4 million in the current quarter were up 14% from $80.2 million a year ago, led by continued strength in the company's worldwide offshore energy services business. Operating income of $18.9 million was more than triple the $6.0 million earned in the second quarter of 2000.
"This is a milestone achievement and marks our first profitable quarter in more than two years,'' commented President and Chief Executive Officer Gerhard E. Kurz. "`Our cost-cutting and restructuring efforts are taking hold, and we are benefiting from cyclical upturns in our two biggest markets -- offshore and tankers. At the same time, we are paying down debt, selling off surplus equipment, and looking for innovative ways to unlock shareholder value. Despite the recent softness in commodity prices, the impact of which seems largely confined to the Gulf of Mexico market, both our offshore and tanker businesses should continue to benefit from healthy rate levels.''
Revenues from Seabulk Offshore, which operates a fleet of 145 offshore energy support vessels, surged 35% year-over-year to $50.5 million -- their highest level in nearly three years -- and accounted for 55% of total company revenues. Supply boat day rates in the Gulf of Mexico, the Company's biggest market, averaged $7,397 for the quarter versus $4,024 a year ago, while utilization was 86% compared with 67% in the year-earlier quarter. Seabulk's fleet of 33 Gulf of Mexico-based crewboats averaged $2,929 for the quarter versus $1,921 for the same quarter in 2000, while utilization was 87% compared with 76% in 2000. In West Africa, Seabulk's second biggest offshore market, average supply boat day rates were $6,988 versus $5,618 in 2000, while utilization stood at 86% against 76% a year ago.
Revenue from Seabulk Tankers, the company's domestic marine transportation business (which includes its Sun State Marine Services subsidiary), totaled $32.3 million, or 35% of total company revenues, versus $34.4 million in the second quarter of 2000, when Seabulk operated an additional tanker that has since been scrapped. The company's 10 U.S.-flag, Jones Act tankers includes five state-of-the-art, double-hull product carriers. One of these, the 46,000-dwt Nantucket Shoals, began operating in July under a new two-year time charter with Gold Star Maritime, a subsidiary of Tesoro Petroleum. Tesoro employs another of the company's double-hulls, the Cape Lookout Shoals, under a three-year time charter that commenced in August 2000. Both ships work in the Alaska/West Coast trade.
"This business is making a growing contribution to earnings and will continue to do so in the future as the market for Jones Act vessels tightens and older contracts are renewed at higher rates,'' commented Kurz. "Unlike our competitors in the offshore business, we are in the unique position of having a large domestic tanker fleet, including five modern double-hulls, which are benefiting from steadily increasing freight rates as older, single- hull vessels are retired under OPA 90.''
Seabulk Towing, which operates a fleet of 31 tugs in seven southeastern ports and the offshore Gulf of Mexico, had revenues of $8.6 million, representing 10% of total company revenues for the quarter and up from $8.3 million in the year-earlier period. The increased revenue was driven by higher vessel traffic in the company's Gulf of Mexico ports.