Norwegian subsea services company Reach Subsea said Thursday it had struck a deal to expand its operating fleet with two ROV support vessels.

The company said it had secured “significant vessel capacity for the coming four years” through a deal to buy the multipurpose ROV support vessel Edda Sun for $29 million and through 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,” Reach Subsea said.

Record high activity & solid outlook

Jostein Alendal, CEO of Reach Subsea said: “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

The Go Electra charter agreement is for four years firm with an option to extend for one year, with, Reach Subsea said, a highly competitive fixed charter rate and a profit share arrangement.

Also, the company said that the purchase of the Edda Sun vessel represented a new development for Reach Subsea, as the company’s operations have so far been based on chartered vessel capacity.

“However, the implied charter rate derived from the purchase price on the [Edda Sun] vessel is below the charter rates we are offered on other similar vessels in the market,” Reach said.

“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.

Edda Sun was built in 2009, while Go Electra was built in 2011.

“They are both highly versatile ROV support vessels, well fit for Reach Subsea’s broad range of subsea survey, inspection and maintenance activities (IMR) as well as construction and decommissioning activities. They are fuel efficient and are capable of operating in harsh weather conditions with low down-time,” the company said.

Edda Sun will be mobilized with one work-class ROV and one high-speed Surveyor Interceptor in time for the high activity season in the North Sea. Go Electra will be available for Reach Subsea early 2023 and will be mobilized with one work-class ROV and one observation ROV.

“Settlement of the Edda Sun acquisition will take place in March 2023, and is subject to consent from our banks, and satisfactory vessel inspection. Execution of the Go Electra charter agreement is also subject to satisfactory vessel inspection. Reach Subsea is considering various financing opportunities for the transaction, including debt, equity, partnering, or a combination of these sources,” the company said.