Most significantly, says Tidewater, "it has experienced delays in acceptance of the initial vessels that form a part of a nine vessel package that were committed to multi-year term charters with Saudi Aramco, largely because the vessels have yet to meet certain performance standards. In addition, start up delays on other projects are expected to result in unanticipated vessel downtime and lower vessel revenue than originally anticipated in the September quarter. These two items are expected to cumulatively result in lower than previously expected vessel revenue in the September quarter of $6 million to $8 million."
Tidewater says it is working with Saudi Aramco to develop a mutually acceptable resolution of the performance standards, noting that "although discussions are still progressing, such a resolution may involve, among other possible outcomes, modifications to the vessels, possible rate reductions during the charter period and further delays before the vessels are on charter. At this time, it is unknown when these issues with Saudi Aramco will be resolved. With regard to the vessels supporting the other projects that were delayed during the September quarter, the company expects that the vessels will commence charters during the December quarter."
In addition, based on actual results through August, Tidewater expects that both vessel operating expenses and general and administrative expenses for the September quarter will be above the general guidance that was provided on its August 4, 2011, earnings conference call. Its revised estimates are that vessel operating expenses will be in the range of $158 million to $160 million and that general and administrative expenses will be in the range of $38 million to $40 million.
Tidewater said that its fiscal 2012 second quarter (ending September 30, 2011) earnings release and conference call have been scheduled for Wednesday, November 2, 2011.
September 22, 2011