Note 2 - Vessel Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

(2)          VESSEL ACQUISITIONS AND DISPOSITIONS

In February 2014, we acquired a vessel we had previously managed, a 2012 built large platform supply vessel (“LgPSV”), for $31.0 million. This vessel was added to our North Sea fleet.

Interest is capitalized in connection with the construction of vessels. During the three month periods ended March 31, 2014 and March 31, 2013, we capitalized $2.7 million of interest for each period.

In the third quarter of 2011, the Company 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”). In late 2011, we exercised an option with one of the shipyards to build an additional PSV. The original estimated cost of these seven PSVs was $288.0 million. The first five of these vessels were delivered during 2013, a sixth vessel was delivered in February 2014, and the final vessel was delivered during March 2014, completing this initial new-build program.

In June 2012, we signed an agreement with a U.S. shipyard (Thoma-Sea) to build two U.S. flagged PSVs for the U.S. Gulf of Mexico region. In July 2012, we signed agreements with another U.S. shipyard (BAE Systems) to build an additional two U.S. flagged PSVs. The original estimated total cost of these four PSVs was approximately $168.0 million. We expect delivery of the first of these vessels by the end of April 2014 and the remaining three in the third and fourth quarters of 2014 and the second quarter of 2015.

During the third quarter of 2012, we placed $52.4 million in escrow related to the two Thoma-Sea new-builds described above and in the table below. Progress payments have been drawn from escrow as they became due. There is $8.7 million remaining in escrow, which is presented in long-term assets in the balance sheet as of March 31, 2014. Funds in the escrow account are invested in U.S. government securities.

There have been no vessel dispositions since December 31, 2013. In April 2014, we approved the construction of an additional North Sea PSV with an estimated total cost of $60.0 million.

The following tables illustrate the details of the vessels under construction and the vessels added or acquired:

Vessels Under Construction as of April 21, 2014
Construction Yard	Region	Type(1)	Expected Delivery	Length (feet)	BHP(2)	DWT(3)	Expected Cost
							(millions)
Thoma-Sea	Americas	LgPSV	Q2 2014	271	9,990	3,600	$36.0
Thoma-Sea	Americas	LgPSV	Q3 2014	271	9,990	3,600	$36.0
BAE Systems	Americas	LgPSV	Q4 2014	286	10,960	5,300	$48.0
BAE Systems	Americas	LgPSV	Q2 2015	286	10,960	5,300	$48.0
Simek	North Sea	LgPSV	Q4 2015	304	11,935	4,700	$60.0

Vessel Additions Since December 31, 2013
Vessel	Region	Type(1)	Year Built	Length (feet)	BHP(2)	DWT(3)	Month Delivered/Acquired
North Cruys	N. Sea	LgPSV	2014	304	11,935	4,700	Feb-14
Highland Princess	N. Sea	LgPSV	2014	246	8,487	3,900	Mar-14

Vessels Acquired Since December 31, 2013
Vessel	Region	Type(1)	Year Built	Length (feet)	BHP(2)	DWT(3)	Month Aquired
Highland Duke	N. Sea	LgPSV	2012	246	7,483	3,133	Feb-14

⁽¹⁾ LgPSV - Large Platform Supply Vessel

⁽²⁾BHP - Brake Horsepower

⁽³⁾DWT - Deadweight Tons