Investment Thesis

  • Tidewater inc. is one of the largest Offshore Support Vessels (OSV) operators in the world.
  • We believe that Tidewater will be worth $199.20 per share by 2027, a 262.2% premium to the current share price.
  • Limited market for newbuild OSVs at current day rates of $16,000/day: Newbuild Economics Require ~$38,000/d Day Rate Over 20 Year Useful Life.
  • Increase in offshore oil & gas exploration activity and day rates for offshore drill rigs and OSVs inflecting significantly higher.


  • Traded on the NYSE with a +$2 billion market capitalization.
  • Post-bankruptcy situation.
  • Tidewater earns an attractive return at ~$13K days rates.
  • Fleet size to 203 vessels, including crew boats, tugboats, and maintenance vessels.

What Are OSVs


  • Offshore service vessels are an essential component of any offshore oil field.
  • Offshore support vessels are required in all offshore exploration, development and production, including towing and anchor- handling for drilling rigs and equipment, and transporting the supplies and personnel needed to sustain drilling, research, workover and production activities.

Types of OSVs

  • Platform Supply Vessels (PSV): Carry material such as casing, drill pipe, tubing and misc. deck cargo on open deck
  • Anchor Handling Towing Supply Vessels (AHTS): Capable of all types of towing, anchor handling activities, and varied subsea operations
  • Specialty Vessels: Support offshore well stimulation, construction work, subsea services, and/or serve as remote accommodation facilities
  • Fast Supply Vessels (FSVs): Specially designed to transport as many as 150 personnel from shore bases to offshore rigs, platforms and other installations at high speed and in comfort
  • Offshore Tugs: Used to tow floating drilling rigs and barges

New Build Economics


The current newbuild economics create a supply side barrier to entry. Meaning that the OSV market will not get flooded with newbuilds as soon as day rates inflect higher.

The State of the Offshore Value Chain

  • The entire offshore value chain has PTSD since 2014
  • Many shipyards that built OSVs went bankrupt.
  • Shipyards are now demanding 40% - 50% upfront deposits as opposed to the 10% upfront deposits pre-2014.

New Build Breakeven NPV

  • Costs for new vessels is around $60-$70 million
  • Even when modeled for a generous day rate of $38K/day and a 90% utilization rate, the payback period on an NPV basis would be 20 years.
  • With many of the OSV operators still paying down debt post bankruptcy and average day rates at $16K/day, there is no demand for new build vessels.

Valuation Model

We utilize conservative assumption in our valuation models, by erring on the side of caution and assuming lower expected returns, higher expenses, and more extended timeframes for revenue generation, we provide a larger margin of safety on our investment.

Discounted Cash Flow Model

  • Using conservative OSV day rate assumptions of $40K/day by 2027, our model implies a share price of $199.20 per share, a 262.2% premium to the current share price.
  • We believe that this provides a conservative base case of Tidewater’s potential.
  • We believe that OSV day rates will exceed that of the peak seen in the last offshore oil & gas cycle, because the supply of new build OSVs will be slower to enter service. As a result, we believe OSV day rates have the potential to increase significantly above $40K/day.


Situation Overview

  • Tidewater inc. is one of the largest Offshore Support Vessels (OSV) operators in the world.
  • Increase in offshore oil & gas exploration activity and day rates for offshore drill rigs and OSVs inflecting significantly higher.

Investment Merits

  • Tidewater earns an attractive return at ~$13K days rates.
  • The current newbuild economics create a supply side barrier to entry. Meaning that the OSV market will not get flooded with newbuilds as soon as day rates inflect higher.
  • Tidewater has the least outstanding debt of all its competitors.


  • Nearly every offshore oil & gas services company went through bankruptcy at the end of the last cycle in 2014.
  • A severe recession could potentially reduce the capex need from oil & gas companies to raise OSV day rates.

Contact Us

For more information, questions, or inquires please don’t hesitate to contact us.


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