Back in black: American OSV owners bullish on US Gulf and beyond

A trio of privately held OSV owners are bullish on oil and gas in the US Gulf of Mexico, forecasting strong deepwater demand that will drive vessel utilisation in the Americas, and a potential undersupply late in 2025.

“We’re bulls,” declared Hornbeck Offshore Services (HOS) chairman, president and chief executive, Todd Hornbeck.

With a fleet of about 75 OSVs, HOS has a strong presence in the Jones Act deepwater market but has diversified its business to support offshore wind developers, subsea and the US military. While highlighting some market “hiccups” in the US Gulf, such as the limited number of oil and gas lease sales, Mr Hornbeck said the outlook for the region “is very bright”, observing “the second half of 2025 looks very strong”. While the number of offshore drillings rigs is forecast to remain at similar levels to 2024, Mr Hornbeck noted Brazil, Guyana, and other regions will draw high-spec OSVs out of the US Gulf. A limited supply of excess high-spec tonnage should drive up vessel utilisation and day rates.

“The second half of 2025 looks very strong”

“Right now, the industry is in the state of equilibrium,” said Laborde Marine owner and co-manager, Cliffe Laborde. “We’ve come back over the last two years. We’re about back to where we were in 2014 with respect to rates and utilisation.”

Otto Candies chairman and chief executive, Otto Candies III, agreed with the assessments of Mr Hornbeck and Mr Laborde. He was also encouraged by the financial and operational discipline shown by the market, which has resisted speculative building and avoided “dumping” tonnage into the sector. He said owners are “not just building for the sake of building, but looking to make sure that it makes economic sense before they do it.”

All three noted that despite day rates moving north of US$30,000 per day, they still do not justify newbuilding in the Jones Act market.

For example, Mr Laborde said 280 class OSVs built by his company in 2008-2009 cost US$30M. He said prices quoted by shipyards for those vessels are US$75M. “So, prices have more than doubled since the last build cycle,” he said.

“Day rates don’t justify the price that it takes you to build a boat,” said Mr Candies. He said owners will have to maintain existing tonnage to high standards. But he concluded: “There will be some good tailwinds going forward. We’re optimistic.”

The memory of the last prolonged downturn is still fresh in the minds of banks, investors and the industry. Mr Hornbeck does not foresee speculative building.

“No one is going to lend us money if we can’t get a fair return on our capital,” he said, adding, “This industry lost hundreds of billions of dollars” during the downturn. With no speculative newbuilding or reactivations and higher market demand, Mr Hornbeck said: “We have got the wind at our back for the next four to five years.”

The three owners made their comments during a panel session on the offshore support vessel market at the Marine Money Finance Forum, in New Orleans in November.

Reflecting the uptick in day rates and positive financial returns enjoyed by OSV owners over the last three years, after a seven-year downturn, the three panellists were welcomed to the stage by AC/DC’s iconic, 1980s rock song ‘Back in Black’.

Based on the panellists’ optimistic outlook for the US Gulf of Mexico and the Americas, it could be the OSV sector’s anthem for the foreseeable future.