Hornbeck to upgrade 200 class vessels to DP2Vessel & ROV News // September 12, 2012
Hornbeck Offshore in the US says it has decided to implement a retrofit programme that will upgrade and ‘stretch’ six of its 200 class DP1 OSVs, converting them into 240 class DP2 vessels.
The vessels the company has committed to the programme are six of its ten Super 200 class DP1 units, four of which are the vessels that recently completed two-year charters with Petrobras in Brazil.
These new generation OSVs were built in 1999 and 2000 and were acquired by the company in 2007. Due to their 56f beam, the planned 40ft mid-body extensions and DP upgrades are expected to add approximately 600 tons to the vessels’ 2,250 tons of deadweight and roughly double their liquid mud carrying capacity to approximately 8,000 barrels.
At the time of writing, the company was in the process of finalizing negotiations with a domestic shipyard it has selected to undertake the work, and expects to enter into a definitive contract “in the very near future.”
Based on preliminary estimates, the company expects the yard to complete two of the six vessels in each of the following redelivery months: May 2013, August 2013 and December 2013, respectively.
The project costs for the modifications are expected to be approximately US$50.0 million in aggregate, and the company expects to incur approximately 762 vessel-days of aggregate commercial downtime for the six vessels (127 vessel-days each).
Other than a modest amount of cash outlay and commercial downtime in the third and fourth quarters of 2012, the retrofit programme is not expected to materially impact the company’s financial results for fiscal 2012.
However, on completion of the programme in 2013, Hornbeck Offshore expects the newly retrofitted 240 class DP2 vessels to command higher day rates, higher margins and higher returns-on-invested-capital than they would have as 200 class DP1 vessels. It anticipates a cash-on-cash pay-back of its additional capital investment within approximately 2.5 years.
“Given the market’s preference for high-spec DP2 vessels and the company’s relatively low pro forma net book value for its retrofitted vessels compared to the construction costs of comparable newbuilds in the market today, the company should be even more competitive in meeting customers’ demand for high-spec vessels at very attractive relative economics,” Hornbeck Offshore said.