JOO has recently participated in an RFI requested asking for indicative charter rates for new deepwater OSVs for oil field service work based on vessel construction costs. Prior to receiving pricing from our selected yards, I expected to see costs to build a new OSV at around $60 million USD. I was quite wrong, with the estimated cost to build a vessel coming in around $80 million…or more.
 
Given these estimated costs, I am very confident that there will not be any new vessels built purely on speculation. New OSVs will only be contracted to be built so long as the owner has a secured a long-term contract for that specific vessel. Even very large companies will find it all but impossible to secure new vessel financing without a term contract in hand.
 
This will benefit the existing OSV fleet, particularly the youngest vessels, by creating support for greater charter rates as demand remains sustained. Furthermore, this will also benefit valuations of newer vessels in the current fleet. This is all very positive news for vessel owners that took delivery of new OSVs at the end of the last build cycle, JOO included. I remain very optimistic about the current state of our industry and how we are positioned to benefit.