Welcome to the Earnings Conference Call First Quarter 2019. My name is John, I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. And I'll now turn the call over to Jason Stanley.

Thanks John, Good morning, everyone, and welcome to Tidewater's earnings conference call for the period ended March 31, 2019. I am Jason Stanley, Tidewater's Director of Investor Relations. I'd like to thank you for your time and interest in Tidewater. With me this morning on the call are our President and CEO, John Rynd; Quintin Kneen, our Chief Financial Officer; Jeff Gorski, our Chief Operating Officer; and Daniel Hudson, our Assistant General Counsel. For today's call agenda, I'll cover a few formalities and then turn the call over to John for his prepared remarks followed by Quintin's review of our financial results for the period. We'll then open up the call for questions. During today's conference call we may make certain comments that are forward-looking and not statements of historical fact. There are risks, uncertainties and other factors that may cause the company's actual future performance to be materially different from that stated or implied by any comment that we make during today's conference call. Please refer to our most recent Form 10-Q for any additional details on these risk factors. This document is available on our website or through the SEC at sec.gov. Information presented on this call speaks only as of today May 7, 2019 and therefore you're advised that at any time sensitive information may no longer be accurate at the time of any replay. Also during the call we will present both GAAP and non-GAAP financial measures. The reconciliation of GAAP to non-GAAP measures is included in last evening's press release. With that I'll turn the call over to John.

Thank you, Jason. Good morning from Houston everyone and welcome to the Tidewater call. March 31, 2019 marked the first full quarter with Tidewater and GulfMark operating as a combined company. The benefits of a larger fleet operating across an existing increasingly efficient global footprint are immediately evident, with revenues up 33% or 30 million from the quarter ended March 31, 2018. First quarter revenues were also up 11% or $11.9 million from the quarter ended December 31, 2018. Our worldwide active fleet utilization was up by approximately 15% compared to the same period year-over-year. For the first quarter active utilization rate remained high during a typically seasonally slow quarter at 80%, only slightly down from 82% level reported for the fourth quarter of 2018. The repositioning of several vessels in preparation for contracts that have now begun and several dry dockings that have now commenced also brought down the active utilization somewhat for the quarter. Taking a look at our operating results by segment, first quarter revenues were up for all regions year-over-year and revenue was also higher for almost all regions quarter-to-quarter sequentially. Most notably our North Sea and Mediterranean segment reported a revenue increase of almost 200% when compared to the first quarter of 2018, and an increase of approximately 40% from the fourth quarter reflecting the larger fleet and substantial market share growth resulting from the GulfMark merger. Due to the initial effects of improving day rates, first quarter vessel operating margin was up 40% from the fourth quarter of 2018 and 92% year-over-year. Our West Africa segment revenue for the first quarter was higher by approximately $2 million compared to the first quarter of 2018 and vessel operating margin was up by 76% over the same period. The reporting segment was not directly influenced by…

Thank you John, and greetings everyone. We are pleased with the financial results for the quarter. The 10-Q and the press release have the predecessor or successor of presentation removed, as we go through the year we will be simplifying the presentations and disclosures with the objective of making it easier to read. If we remove something you're interested in please give us a call. Simplifying things a bit further there were no impairments in the quarter. Overall a solid first quarter based on the current state of the market. We remain focused on the fundamentals of our business and dedicated to the fundamental investment characteristics of maximizing free cash flow and maintaining capital discipline. We did have charges in the quarter related to the merger of approximately 3.7 million and all but approximately 900,000 of that charge was non-cash. You may recall from the last quarter that this pertains to severance costs associated with the merger and relates principally to the accelerated vesting of stock grants. My objective today is to give you a quick summary of Tidewater's results and to give you an update on our progress of integrating the two companies ERP systems. Consolidated revenue for the quarter was 122.1 million up approximately 12 million from the prior quarter. The two fundamental components driving the increase in revenue were a nice 3% increase in average day rates up $261 per day to 98.06 and the increase in fleet size due to the merger. This quarter marks the first quarterly increase in consolidated average dayrates in the past five quarters and we are optimistic that it will be the first of many quarters reversing the longer term 22 quarter trend of decreasing average dayrates globally. Active vessel utilization was down sequentially, down approximately 243 active vessel days or…

[Operator Instructions] Our first question is from Turner Holm from Clarksons.

Hi, John, Quintin and Jason, I wanted to touch on the recent market developments in the North Sea and to some degree in other markets, I guess the question is, to what degree those improvements and those markets might be expected to be more reflected in Tidewater numbers. I'm just looking at what you reported in the deepwater segment for the first quarter, which I believe is just about over $11,000 a day. And then you reference some day rates on the [term in the spot] [ph] in your prepared remarks and then I guess Quintin also mentioned that they're expected to see a bit higher revenue in the second quarter. But any more visibility on the impact and timing of those leading edge day rate improvements would be appreciated.

I think you'll see the second quarter start to really reflect more of a full quarter of the activity levels in the North Sea. And I think we're, as we talked to where our spot rates are and term rates are, there's been a very nice move off bottom. Also in the second quarter, as we mentioned in the prepared remarks, we will relocate some assets in West Africa, specifically Nigeria. So we'll see, not the full quarter but we'll have a good second quarter impact of our increased activity in Nigeria, specifically.

I think, I wanted to just touch as well on something that Quintin mentioned in his prepared remarks about tender activity seemingly indicating better demand if I understood you correctly in 2020. Could you flush that out Quintin?

Well relative to what I've experienced in the last several years, we're seeing much more increased tender activity and people forecasting much further along in their investment horizons, means not just the number of FIDs that have been increasing I think that's been publicly acknowledged. But we're getting more and more commentary from our customers about what is the forward plan for vessels. And to me that a really good sign that the industry as a whole is tightening up, the OSV industry is tightening up. They're coming to us much further in advance of the use and utilization of the vessels which to me always indicates improving market as we go through the year.

And on that I guess there was a rig contractor last week that had a sort of a highly talked about rig contract multi-year in Africa and there seemed to be some perception in the space that the rate was perhaps lower than what some might have liked. How do you think about balancing that sort of longer term visibility and versus the rates that you're able to achieve today?

No that's a good question. I think we view the fleet contracting strategy as a bond portfolio. So we'll keep part of fleet short, part of the fleet term mid-term and then selectively go long on certain assets in certain locations.

Sure. I guess you're not looking to lock up things that are currently low rates for many years, at least not most of the fleet that's what it sounds like.

Yes and also you're also subject to what your customer wants. If he wants a five year contract and it's that or nothing or a two year contract that or nothing, you have to play, but I think you have to when you sit down to price that opportunity you have to take into consideration where you think the market is moving in price accordingly.

On the Gulf of Mexico, one of the public OSV companies talked about last week an expected ramp in activity in that wider region including northern South America and Mexico and potentially a ramp in day rates as a result. Is that a view you all share?

Yes I think that it's kind of we had, we touched on the prepared remarks when we talked about the Americas segment. We see rising demand for the next year or two years in Mexico. We know what's going on in the Caribbean. You're going to pull some U.S. Jones Act vessels out of the U.S. Gulf of Mexico to meet some of that demand, which could further tighten the Gulf of Mexico. Yes so we agree with that other public OSV provider.

And then maybe one more for me. Quintin, the due from affiliate and due to affiliate balance has been a lot of changes in those over the last couple of quarters. The balance is coming down. Is there any update you can provide with your new CFO role how you're looking at that, that that piece of the balance sheet?

You know this is something that we've had ongoing dialogues with our partner on for several years. We had some very constructive dialogues in the first quarter and we anticipate having some very constructive dialogue in the second quarter as well. You may note that we took an impairment in Q4 and that was based on those discussions, and as I sit today, I feel very comfortable with the collectability of those balances over the long-term and we'll work to structure a more formal relationship with our partner as we go through the remainder of 2019.

[Operator Instructions] And I'm seeing no further questions at this time.

Okay. Thanks, John. Thank you everybody for your interest in Tidewater and have a great day.

Thank you, ladies and gentlemen. That concludes today's call. Thank you for participating and you may now disconnect.