Note 2 - Vessel Acquisitions and Dispositions

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment Disclosure [Text Block]

Property, Plant and Equipment Disclosure [Text Block]

(2)            VESSEL ACQUISITIONS AND DISPOSITIONS

In January 2013, we sold a vessel that was being held for sale that was not included in our fleet numbers. The net proceeds totaled $0.7 million and there was no gain or loss on the sale.

Interest is capitalized in connection with the construction of vessels. During the three and six month periods ended June 30, 2013 we capitalized $3.7 million and $6.4 million of interest, respectively. During the three and six month periods ended June 30, 2012, we capitalized $1.0 million and $1.8 million of interest, respectively.

In the third quarter of 2011, our Board of Directors approved the initiation of a new-build construction program. We began the program in the North Sea region where we contracted with three shipyards to build a total of six platform supply vessels (“PSVs”). The estimated total cost of these initial six vessels is $228.0 million. In addition, in late 2011, we exercised an option with one of the shipyards to build an additional vessel at an estimated cost of $60.0 million. The first vessel was delivered on July 9, 2013 at Remontowa Shipyard in Poland. The remainder of these vessels are scheduled to be delivered over the remainder of 2013 and through the first quarter of 2014.

In June 2012, we signed an agreement with a U.S. shipyard to build two U.S. flagged PSVs for the U.S. Gulf of Mexico at an estimated total cost of $72.0 million. In July 2012, we signed agreements with another U.S. shipyard to build an additional two U.S. flagged PSVs at an estimated total cost of $96.0 million. We expect deliveries of these four vessels in the third and fourth quarter of 2013, the third quarter of 2014 and the first quarter of 2015.

During the third quarter of 2012, we placed $52.4 million in escrow related to the two Thoma-Sea new-builds (U.S. flagged PSVs) described in the table below. Progress payments will be drawn from escrow as they become due. The amount held in escrow is segregated from cash and cash equivalents and is presented in long-term assets on our June 30, 2013 balance sheet. As of June 30, 2013, the total amount held in escrow was $32.3 million. Funds in the escrow account are invested in United States government securities.

The following tables illustrate the details of the vessels added, under construction, and disposed of as indicated.

Vessels Additions Since December 31, 2012
Vessel	Region	Type(1)	Year Built	Length (feet)	BHP(2)	DWT(3)	Month Delivered
Highland Defender	N. Sea	LgPSV	2013	291	9,574	5,100	Jul-13

Vessels Under Construction as of July 22, 2013
Construction Yard	Region	Type(1)	Expected Delivery	Length (feet)		BHP(2)		DWT(3)		Expected Cost
										(millions)
Remontowa	N. Sea	LgPSV	Q3 2013		291		9,574		5,100	$	37.0
Remontowa	N. Sea	LgPSV	Q3 2013		260		9,574		4,000	$	34.0
Rosetti Marino	N. Sea	LgPSV	Q4 2013		246		8,457		3,000	$	31.0
Rosetti Marino	N. Sea	LgPSV	Q1 2014		246		8,457		3,000	$	31.0
Simek	N. Sea	LgPSV	Q3 2013		304		11,935		4,700	$	58.0
Simek	N. Sea	LgPSV	Q1 2014		304		11,935		4,700	$	60.0
Thoma-Sea	Americas	LgPSV	Q4 2013		271		9,990		3,600	$	36.0
Thoma-Sea	Americas	LgPSV	Q1 2014		271		9,990		3,600	$	36.0
BAE Systems	Americas	LgPSV	Q3 2014		286		10,960		5,300	$	48.0
BAE Systems	Americas	LgPSV	Q1 2015		286		10,960		5,300	$	48.0

Note: Final cost may differ due to foreign currency fluctuations

Vessels Disposed of Since December 31, 2012
Vessel	Region	Type(1)	Year Built	Length (feet)	BHP(2)	DWT(3)	Month Disposed
Clwyd Supporter	N. Sea	SpV	1984	266	10,700	1,350	Jan-13

⁽¹⁾ LgPSV - Large Platform Supply Vessel

    SpV - Specialty Vessel

⁽²⁾BHP - Brake Horsepower

⁽³⁾DWT - Deadweight Tons