Hornbeck Offshore Services

Overview


Hornbeck Offshore Services, Inc., through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels, and a shore-base facility called HOS Port to provide logistics support and specialty services to the offshore oil and gas exploration and production industry primarily in the United States, Gulf of Mexico, Brazil, Trinidad and Qatar. It operates in two segments, Upstream and Downstream. The Upstream segment owns and operates fleets of the U.S.-flagged OSVs that support deepwater and ultra-deepwater exploration, development, production, construction, installation, maintenance, repair, and enhanced oil recovery requirements of the oil and gas industry. This segment also owns conventional OSVs, work class ROVs, and a shore-base facility located in Port Fourchon, Louisiana. In addition, it provides vessel management services for other vessels owners, which include crewing, daily operational management, and maintenance activities. The Downstream segment owns and operates a fleet of ocean-going tugs and tank barges that transport petroleum products, primarily in the northeastern United States, the Gulf of Mexico, the Great Lakes, and Puerto Rico. These tugs and tank barges provide coastwise transportation of refined and bunker grade petroleum products, as well as offer other services, including the support of deepwater well testing and other applications for refining, marketing, and trading companies. As of June 30, 2011, excluding seven non-core assets, the Company's operating fleet consisted of 51 new generation OSVs, 4 MPSVs, 9 double-hulled tank barges and 9 ocean-going tugs. The company was founded in 1997 and is headquartered in Covington, Louisiana.

MPSVs
The HOS Centerline was added to Hornbeck's fleet in February 2009. It is a Jones Act qualified, 370 foot multi-purpose support vessel (MPSV). This HOS 370 design, with an 8,000+ deadweight-ton capacity represents the largest and most diverse DP-2 classed offshore supply vessel available today. The HOS Centerline is the only vessel in the world to have received certifications by the United States Coast Guard allowing operations as a supply vessel, industrial/construction vessel and as a petroleum and chemical tanker and achieved its multi-certifications under Subchapters “L’, “I”, “D” and “O”. Its sister-vessel, HOS Strongline joined the fleet in early 2010 and received the same regulatory pedigree. Both vessels are based at the company’s shore base facility, HOS Port, located in Port Fourchon, Louisiana. These unique vessels have the capacity to transport more than 30,000 barrels of liquid drilling mud and fuel to and from exploration, development and production projects. Positive displacement pumping systems allow the vessels to provide a consistent transfer of product even at installations with large air gaps. The HOS Centerline boasts a self-contained mixing and cleaning system that significantly reduces the risk of drilling fluid collapse as well as reduces the time necessary to clean storage tanks, which is a cost normally borne by its customers. Mud mixers utilize low inertia paddles to reduce the fall-out of the mud and provide for a consistent mix. The vessel’s significant size, 8,400 kw of available propulsion, power and DP-2 capability allows it to continue cargo transfer operations during sea and weather conditions that prevent smaller vessels from working. With its subchapter ”D” and “O” certifications, the HOS Centerline can carry crude oil as well as other flammable and combustible cargoes in significant quantities from offshore drilling and production sites. The vessels offer 18 tanks with three separate segregations that allow the transport of three separate products at the same time. This feature makes the vessel an excellent platform for various well test, flow-back and dewatering projects in deepwater and ultra-deepwater. The vessel can also be utilized for emergency export of crude oil and other fluids during times of or following disruptions, such as hurricanes. The HOS 370-class cargo deck dimension is 240 feet x 58 feet (1,287m2) and complemented by an additional 30’ x 58’ of covered deck space, unparalleled in the industry. The vessels have multi-functional ISO sockets integrated into the bow to accept standard sized containers to increase loading productivity and eliminate the use of traditional chains and binders. The HOS Centerline has accommodations for up to 78 personnel, in excess of the vessel’s crew. The large deck and ample quarters provide an excellent platform for subsea construction operations.

HOS Port
The Company purchased a leasehold interest in a parcel of improved real estate adjacent to HOS Port, its existing shore-base facility located in Port Fourchon, Louisiana. The new facility lease has close to seven years remaining on its initial term, with four additional five-year renewal periods. The acquisition of this additional shore-base supports Hornbeck's rapidly expanding operations in the Gulf of Mexico's largest deepwater offshore port and will provide more lay-down area in support of its growing MPSV program. The combined acreage of the two adjoining properties will be approximately 60 acres, more than double the initial size of HOS Port. The acquired facility, formerly known as the "Rowan Base," will also increase the Company's shore-base lifting capacity by two cranes, and will extend its waterfront bulkhead by over 1,000 additional linear feet to nearly 3,000 total linear feet. The acquisition closing is subject to customary conditions, including third party consents, environmental testing and regulatory approvals. The company acquired the HOS Port facility and its heavy lift capabilities in order to accommodate its growing fleet of large dimension vessels, including the HOS Centerline and HOS Strongline.

Marine Spill Response Corporation Contract
Hornbeck Offshore Services and Marine Spill Response Corporation (MSRC) announced that they entered into a long-term agreement for spill response services in the Gulf of Mexico. Two U.S.-flagged 370 class multi-purpose support vessels (MPSVs) owned by Hornbeck Offshore are being retained by MSRC and equipped with dedicated spill response capability. The HOS Centerline and HOS Strongline are 370-ft. vessels with 24,000 bbls of recovered oil capacity (30,000 bbls of total liquid storage capacity) based out of Port Fourchon, LA. Each vessel is being outfitted with dedicated skimming systems, ocean boom and a support boat. The navigational systems on each vessel are also being enhanced with x-band and infrared oil spill detection systems that may increase the ability of the vessel crew to conduct skimming operations during times of adverse weather, low visibility and night operations. This contract is a continuation of the relationship that MSRC has developed with HOS as a part of MSRC’s “Deep Blue” expansion program to significantly enhance the response capability in the Gulf of Mexico. MSRC has also expanded its capability to include a manned equipment site in Port Fourchon, LA, at Hornbeck Offshore’s primary shore base facility, HOS Port. This facility will also house a spill response school to enhance responder training.

Superior Achievor Aquisition
Hornbeck entered into a definitive asset purchase agreement with Superior Offshore International, a subsea construction and commercial diving services company ("Superior"), to acquire the Superior Achiever, a T-22 class DP-3 new generation multi-purpose support vessel ("MPSV") and related owner-furnished equipment, while under construction at Merwede Shipyard in Holland.

Sea Mar Aquisition
In 2007, Hornbeck entered into a definitive asset purchase agreement with certain affiliates of Nabors Industries Ltd. ("Nabors") to acquire 20 offshore supply vessels ("OSVs") and their related business (the "Sea Mar Fleet.") The Sea Mar Fleet comprised of ten 200 class DP-1 new generation OSVs and ten conventional OSVs. The Company also purchased one 285-foot DP-2 new generation OSV which was under construction at the time at a domestic shipyard. All of the vessels acquired by Hornbeck Offshore were U.S. flagged and qualified for U.S. coastwise trade under the "Jones Act" except for one of the conventional vessels, which was foreign-flagged. In addition, under a separate agreement, Hornbeck Offshore agreed to manage five Nabors-owned Mexican flagged vessels operating offshore Mexico.

Walvis Purchase
The Walvis 17 and Walvis 18, now named HOS Saylor and HOS Navegante respectively were purchased from the Sea Trucks Group operating out of Lagos, Nigeria.

Candy Fleet Aquisition
In 2003, Hornbeck Offshore acquired five 220-foot class deepwater offshore supply vessels and their related business from Candy Marine Investment Corporation, an affiliate of Candy Fleet Corporation. Candy Fleet is a privately held marine vessel operator in the Gulf of Mexico.