THE TIDEWATER STORY
Tidewater created the offshore marine service industry in 1955 with the launch into the Gulf of Mexico of the Ebb Tide, the first-ever energy production service vessel. Now, nearly 50 years and many vessels later, they remain the industry leader, boldly following the quest for oil and gas into increasingly deeper waters off of six continents while continuing a proven record of service to installations closer to land. The company's tradition of anticipating and responding to the worldwide needs of energy exploration is well known and respected in the industry.

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Tidewater: Challenge, Perseverance, Conquest
From the 1950s through the 1990s
Beginning in the 1950s, Tidewater created an entire new service industry: the "work boat" industry.

Today, almost half a century later, Tidewater is the undisputed worldwide leader of the work boat business, owning and operating almost 700 energy-support vessels of various shapes and sizes.

Tidewater's role as an offshore energy service company is an integral part of the process of searching for, developing and producing crude oil and natural gas.

It all began in 1955 when a group of investors led by the Laborde family of New Orleans pioneered the development of the first offshore service vessel tailor-made to support the new and growing offshore oil and gas industry. A year later, when the vessel Ebb Tide was ready to sail to work in the U.S. Gulf of Mexico, Tidewater Marine Service, Inc. was begun.

From that first vessel, other vessels followed: anchor handling towing supply, towing supply and supply vessels, specialty boats, offshore tugs and crew boats, to name a few.

Collectively, the boats did - and do - transport people, equipment and supplies between mainland locations and various offshore installations. They also tow and position mobile drilling rigs, assist in a variety of offshore construction projects and aid in a number of specialty services, including cable-laying and three-dimensional-seismic work.

But that's not all.

More than one Tidewater boat has appeared on the "big screen" from time to time, when Hollywood came calling and a boat was available.

Growth and Expansion
Since its earliest days, Tidewater has pursued a goal of expansion. And it has been successful in that regard. Today, Tidewater, more than twice the size of its nearest competitor, deploys vessels throughout the world, wherever there is significant oil and gas exploration, development or production.

Expansion came first to South America's Venezuela, where, more than 40 years later, Tidewater still has a major presence. Then, in the 1960s, Tidewater boats could also be found in waters off Central America and West Africa, even Australia.

Time and time again, the company's broad geographic parameters have served Tidewater well. While the U.S. Gulf is still home to a number of Tidewater vessels, 60 percent of its considerable fleet now operates in various international venues. In addition to the aforementioned areas, Tidewater boats are on the job in waters off Southeast Asia and the Middle East, as well as in the North Sea. Expansion has also come to the U.S., where dozens of Tidewater vessels are in service in waters ranging from California to Alaska.

Tidewater's rise to the top, however, didn't come without growing pains. When the bottom fell out of the oil and gas market in the mid-1980s, many energy-related companies struggled to survive. And many didn't. Tidewater, though, hung on through the hard times and even fought off an unsolicited buyout offer to stay afloat.

Acquisitions and Consolidation
While Tidewater has built more than its share of boats, the company has also grown by way of acquisition, especially in the 1990s, where it once again led the way for an industry in need of consolidation.

In addition to eliminating competition - and simultaneously, bringing more professionalism to a fragmented industry - Tidewater's management found that growth by acquisition was a cost-effective means to immediately increase the company's revenue base.

Arguably the most significant acquisition was that of 1992's Zapata Gulf Marine, where Tidewater virtually doubled its size overnight in raising its fleet to 500 vessels.

Then in 1996, under the guidance of new Chairman, President and Chief Executive Officer William C. O'Malley, who took over from long-time head man John P. Laborde in 1994, Tidewater again took in a major competitor. Hornbeck Offshore Services, Inc. That takeover netted Tidewater 90 vessels - most of them in the U.S. Gulf - bringing its total number of boats to more than 600 worldwide.

Tidewater's competitors, meanwhile, had been taking notes.

Seacor recently acquired Smit Internationale. Trico Marine, which became a public company in 1996, acquired Saevik Supply. And Hvide Marine - also becoming a public company in 1996 - added several small companies to its fleet: GMMOS, IMS, Selat and Care.

Diversification and Streamlining
Tidewater not only grew vertically through the years, but horizontally as well. That is, in addition to its fleet additions, Tidewater diversified into several businesses, including oil and gas development, real estate holdings and natural gas compressors. However, after years as a multi-faceted corporation, Tidewater divested itself of its oil and gas properties. Then its real estate holdings were sold. Finally, its compression operations were divested.

Of all the secondary businesses, the natural gas compression business - an expanding worldwide endeavor and an integral part of the transportation of natural gas via pipelines - was the most significant. In fact, following the acquisition of a Halliburton compression company in 1994, Tidewater Compression Service, Inc. comprised 15 percent or more of Tidewater Inc.

In addition to bringing to an end Tidewater's diversification program, the compression sale helped to eliminate the considerable debt taken on in the mid-1997 $548-million O.I.L. acquisition.

But streamlining operations was more than just a way to pay for corporate acquisitions, incurred debt and expanded services. O'Malley emphasized that as a worldwide leader Tidewater should direct all its energies, resources and talents to its "core business."

Customer Service and Shareholder Return
A key to Tidewater's success is "customer service." As such, Tidewater people are a prominent part of business operations. The company's philosophy is that having the most equipment or even the best equipment is insignificant if such machinery isn't directed and operated by friendly, knowledgeable and skilled employees.

Therefore, Tidewater provides initial and ongoing training for its people, stressing safe operations and accommodating service. Further, Tidewater maintains offices throughout the world, so that managers can be close to operations, whether those operations are in Abu Dhabi, Buenos Aires or some other far corner of the world.

All the while, Tidewater balances its customer-service goals with objectives seeking the highest monetary return for its stockholders.

To that end, Tidewater's management is continually analyzing its operations to get the "biggest bang for the buck," mindful of the expectations of those who put their trust - and invest their money - in Tidewater.

Evolution and the Future
Just as Tidewater has evolved through the decades, it must continue its metamorphosis in these changing times. New and exciting challenges await the company, and how Tidewater's management and front-line employees handle those challenges will determine whether Tidewater will be the success in the future that it has been in the past.

Those challenges include: determining when and how to update an aging fleet; planning for and managing offshore work that's moving increasingly into the deeper waters; predicting and adapting to rapid changes in the global oil and gas supply and demand balance; and recruiting, training and retaining the best people in an increasingly competitive workplace. And those are just a few. Other examples: Tidewater has many publics that must be served: stockholders, regulators environmentalists and the like.

In short, Tidewater people must work hard to keep Tidewater a worldwide leader in the ever-changing marketplace of today and the global new millennium of tomorrow.