Revenue during the period remained reasonably stable year-on-year, dropping just 10.4% to $362m despite a much tougher market elsewhere in the offshore sector. Topaz attributed much of this to long-term BP contracts in the Caspian region, where utilisation rose to 96% from 94% in 2014.
“We recently secured 14 OSV contracts with BP in the Caspian Sea for a period of five years plus two one-year options, extending the tenure of our existing contracts for the 14 vessels until 2023,” said Topaz Energy and Marine ceo René Kofod-Olsen. “This significant deal increases our backlog to nearly $1.4bn and gives us better long-term visibility of revenues.”
However, one-off charges including the impairment as well as $8.3m in debt refinancing pushed the final result from a $20.8m profit to a $58.5m loss. “The current oil and gas environment materially impacted the valuation of our fleet… weaker industry fundamentals mean we have had to re-base the valuation to align with the environment,” Kofod-OIsen explained.
As the expiration of contracts in the Middle East North Africa (MENA) region began to set in, decreases in revenue $37m year-on-year or 25.9%, became more pronounced in Q4, widening to a 42.7% decrease. “The decrease is primarily due to the sale of a vessel during December 2014 of $21.6m, however we are also being impacted by the expiration of contracts in this region,” said Kofod-Olsen.
“We expect the first half of 2016 to be a challenging period. However a subdued market also offers opportunities and during 2015, we have worked hard to ensure we have the right capital structure in place to take advantage of growth options delivered in this environment which are in line with our strategy.”
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