Prosafe, a provider of offshore accommodation solutions, is expressing optimism regarding the demand outlook for 2024 and beyond, citing a considerable surge in tendering activity during this period. The company expects this trend to result in higher day rates and enhanced fleet utilization in the coming years.

In the second quarter of 2023, Prosafe reported revenues of $21.0 million, a decrease from $60.9 million in the same quarter of 2022. Additionally, the company recorded an EBITDA loss of $9.8 million in Q2 2023 compared to a profit of $22.8 million in Q2 2022. This decrease in financial performance is primarily attributed to a reduced utilization rate, with three vessels operational in Brazil for either the entire or partial quarter, as well as costs linked to new contract preparations for the vessels Safe Concordia and Safe Notos.

Prosafe points out that the demand for the 2023 North Sea market is currently weak, with limited commissioning work in Norway and substantial UK maintenance and modification work, potentially influenced by windfall taxes. Conversely, the company observes strong and improving demand in Brazil and the Gulf of Mexico throughout 2023.

Looking ahead, Prosafe has identified a notable surge in tender activity and contract awards scheduled for 2024 and beyond, indicating improved earnings, utilization rates, and higher day rates. The company highlights four new Petrobras tenders in Brazil and recent contract awards in regions like the North Sea, Africa, and Australia as factors contributing to a more favorable medium- and long-term demand outlook, which is also leading to supply tightening.

The expectation of rising day rates is bolstered by significant increases in day rates for recent Brazil tenders. Prosafe also envisions additional tenders in the UK North Sea and Brazil for contracts set to commence in 2024 and 2025.

Reese McNeel, Prosafe's Interim CEO, commented: "We have seen substantially increased tender activity in the past months across all regions for 2024 and beyond. With significant investments, a new management team, and improved outlook, we expect improved earnings, utilization, and increased day rates to come."

Notably, one of Prosafe's semi-submersible vessels recently initiated a 330-day contract with an undisclosed company in the U.S. Gulf of Mexico. The rising tender activity signals a potential upswing for Prosafe's operations, with the company poised to capitalize on new opportunities in the evolving offshore industry landscape.