Yep I'm interested in the OSV market and taking a stake. I'm still learning tho, have paid a few school fees to date to be honest!
Supply side wise the quote above re overcapacity is a real problem tho that needs to work through. IMO the OSV industry previously geared up way too much when oil price was going up. Indeed historically there is a correlation between oil prices and OSV co share prices, but the OSV companies over geared capacity significantly, this need to be worked though and it caps demand. The earnings calls from Gulfmark are a good source of information re this point.
Demand side I think it's later in the oil cycle we will see demand for offshore increase. I recall from memory Jeff Weber said in the 2015 AGM Brent at about $65 mark was enough for guys to make decisions. I think this remains more or less right now if the view is the price is sustainable. But even if demand is there you have the supply issue...
So overall I don't condem the industry but I do see challenges on both the supply and demand side for some time yet.
I do think Transocean (US code RIG) (oil rig company, but similar patterns to OSV) got it about right when they said it was a 2020 game for increases in day rates and utilisations.
In the meantime it's survival game, all about cash flow for the moment being.
All IMO.
MRM Price at posting:
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