Vessel-owner Prosafe has reported a significant knockdown in its fleet utilisation rate for the first quarter of 2020.
The firm said vessel use was down from around 62% in Q1 2019 to 32% for the first quarter of this year.
French oil giant Total delayed a contract due to be led by vessel-owner Prosafe at its Elgin field in the North Sea last month.
The deal, for the Safe Caledonia to provide accommodation support at the Elgin complex, has been delayed by one year.
EnQuest also instructed Prosafe not to mobilise the Safe Zephyrus in March, which had been awarded a 21-day contract at the Thistle field.
A contract with Petrobras for the use of the SafeNotos and the Safe Eurus was also halted in March.
Prosafe revealed that it has has incurred non-recurring costs of around £820,000 in the quarter, which were largely related to the ongoing process with lenders for a long-term financial solution.
The firm has, in agreement with lenders, presented a restructuring proposal that if approved as proposed will result in a sustainable balance sheet.
But it added that “due to ongoing discussions and the uncertainty related to the outcome of the process, it is too early to know whether this proposal or a variant of it will eventually be agreed”.
Prosafe added in a statement: “The Covid19 pandemic and the oil price collapse since March have resulted in a dramatic change in market conditions, economic outlook and ways of living and working.
“The entire oil and gas services industry is exposed to a “double Black Swan event”, and short term planning as well as longer term forecasting is extremely challenging, whilst at the same time being critical.
“Against the aforesaid, taking a view on the combined effects of Covid-19 and related national and international measures taken, the oil price crash, the industry dynamics and the company specific factors, both in the short and long term, are very demanding.
“While earnings potential in the longer term is particularly difficult to predict and work remains ongoing to conclude on related financial and accounting effects, the ongoing forecasting work indicates that both asset values and debt levels are in the company’s opinion unsustainable although the magnitude is yet to be concluded.
“The company aims to arrive at a sustainable solution in order to protect values to the extent possible and establishing a sound basis upon which to create value in the future.”