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Oceaneering Profits Grow on Demand for Offshore Equipment

28 October 2011

Offshore oil field services company Oceaneering International reported Thursday that its profit rose 33 percent in the third quarter, fueled largely by international demand for underwater equipment that aids in offshore drilling.

Net income for Oceaneering grew to $79 million, or 72 cents per diluted share, during the three-month period ending Sept. 30, from $59 million, or 54 cents per share, for the same period in 2010.

Third-quarter revenue grew 17 percent to $602 million.

President and CEO M. Kevin McEvoy noted that it was a record-setting quarter for the company’s remotely operated vehicles, with operating income growing 17 percent to $60 millionfor the underwater support equipment.

McEvoy said he expects that growth to continue as ROV demand increases in offshore areas of West Africa and in the Gulf of Mexico. The company plans to add 15 to 20 vehicles to its fleet in 2012, while retiring four to six, McEvoy said in a conference call with analysts Thursday.

"The renewed regulatory emphasis on reliable equipment and redundant safety features of deepwater operations is causing our customers to be even more focused on risk reduction,” McEvoy said. "This elevates he importance of the utility of our ROV services.

Oceaneering’s subsea projects division, which provides manned diving operations and subsea maintenance in the Gulf of Mexico, is slowly recovering from stricter regulations and a temporary moratorium on some deepwater exploration there following last year’s oil spill, McEvoy said. Total revenue for the division fell 33 percent, while operating income grew 23 percent for the quarter.

"We anticipate demand for our deepwater services and products will continue to rise,” McEvoy said. "We believe the oil and gas industry will continue to invest in deepwater as it remains one of the best frontiers for finding hydrocarbon reserves with high production flow rates at relatively low finding and development costs.”