Reach Subsea secures cost attractive long-term vessel capacity through acquisition of Edda Sun and charter of Go Electra
Monday 28 November 2022
Reach Subsea ASA the trusted data and subsea service provider for ocean-based industries, has secured significant vessel capacity for the coming four years through an agreement to acquire the multipurpose ROV support vessel Edda Sun for USD 29 million and a charter contract for the multipurpose ROV support vessel Go Electra with a duration, including options, through 2027.
With the favorable terms on the two new vessels, and the existing charters of Havila Subsea and Deep Cygnus, Reach Subsea now has a long-term core fleet portfolio with an estimated 20-30 percent cost advantage compared to the current market. This will be further improved with the launch of the unmanned Reach Remote vessels, set for launch in 2023.
“We are currently seeing record high activity and face a market with a solid growth outlook for years to come. Hence, the market for vessel capacity will be very tight, but we are now perfectly positioned to maneuver and take advantage of the growing demand for both short-term and multi-year assignments,” said Jostein Alendal, CEO of Reach Subsea.
The Go Electra charter agreement is for four years firm with an option to extend for one year, with a highly competitive fixed charter rate and a profit share arrangement.
The USD 29 million acquisition of Edda Sun represents a new development for Reach Subsea, as the company’s operations have thus far been based on chartered vessel capacity. However, the implied charter rate derived from the purchase price on the vessel is well below the charter rates we are offered on other similar vessels in the market.
“In the current market, it is attractive from a cost perspective to own parts of the ROV vessel capacity. Owning the vessel also implies a mitigation of any cost inflation risk in the coming years, as well as being able to credibly cater to our clients growing need for long term solutions,” said Jostein Alendal.