UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2009

GULFMARK OFFSHORE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

001-33607
(Commission file number)

76-0526032
(I.R.S. Employer Identification No.)

10111 Richmond Avenue, Suite 340, Houston, Texas (Address of principal executive offices)		77042 (Zip Code)

(713) 963-9522
(Registrant’s telephone number, including area code)

          Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES x     NO o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o     NO o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o     NO x

          Number of shares of Common Stock, $0.01 par value, outstanding as of July 27, 2009: 25,834,088

(Exhibit Index Located on Page 25)

GulfMark Offshore, Inc.
Index

						Page
						Number
Part I.		Financial Information
		Item 1		Financial Statements			3
				Condensed Consolidated Balance Sheets			3
				Condensed Consolidated Statements of Operations			4
				Condensed Consolidated Statement of Stockholders’ Equity			5
				Condensed Consolidated Statements of Cash Flows			6
				Notes to the Condensed Consolidated Financial Statements			7
		Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
		Item 3		Quantitative and Qualitative Disclosures About Market Risk			23
		Item 4		Controls and Procedures			23
Part II.		Other Information
		Item 4		Submission of Matters to a Vote of Security Holders			24
		Item 6		Exhibits			24
		Signatures					24
		Exhibit Index					25
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2009				2008
	(In thousands, except par value amount)
ASSETS
Current assets:
Cash and cash equivalents			$165,936				$100,761
Trade accounts receivable, net of allowance for doubtful accounts of $774 in 2009 and $408 in 2008			98,770				101,434
Other accounts receivable			3,903				3,467
Prepaid expenses and other			12,108				7,236
Total current assets			280,717				212,898
Vessels and equipment at cost, net of accumulated depreciation of $216,768 in 2009 and $182,283 in 2008			1,099,593				1,035,436
Construction in progress			72,410				134,077
Goodwill			126,644				123,981
Fair value hedges			5,374				7,801
Intangibles, net of accumulated amortization of $2,884 in 2009 and $1,442 in 2008			31,715				33,156
Deferred costs and other assets			8,230				9,618
Total assets			$1,624,683				$1,556,967
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt			$228,550				$18,970
Accounts payable			14,071				15,085
Income taxes payable			11,642				3,037
Other accrued liabilities			33,622				37,800
Total current liabilities			$287,885				$74,892
Long-term debt			239,660				462,941
Long-term income taxes:
Deferred tax liabilities			91,629				116,172
Other tax liabilities			23,856				27,913
Other long term liabilities			15,431				20,206
Stockholders’ equity:
Preferred stock, no par value; 2,000 authorized; no shares issued			-				-
Common stock, $0.01 par value; 30,000 shares authorized; 25,400 and 25,046 shares issued and outstanding, respectively			254				250
Additional paid-in capital			357,765				352,843
Retained earnings			569,774				520,630
Accumulated other comprehensive income (loss)			38,760				(17,157	)
Treasury stock			(6,275	)			(6,852	)
Deferred compensation expense			5,944				5,129
Total stockholders’ equity			966,222				854,843
Total liabilities and stockholders’ equity			$1,624,683				$1,556,967

The accompanying notes are an integral part of these condensed consolidated financial statements.

GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(In thousands except per share amounts)
Revenue			$104,656				$81,893				$213,451				$165,241
Costs and expenses:
Direct operating expenses			39,132				29,912				79,614				57,610
Drydock expense			2,642				2,630				4,880				6,322
General and administrative expenses			11,565				9,421				22,105				18,198
Depreciation and amortization			13,146				9,515				25,516				18,263
Gain on sale and involuntary disposal of assets			(869	)			(16,407	)			(5,501	)			(16,410	)
Impairment charge			-				-				46,247				-
Total costs and expenses			65,616				35,071				172,861				83,983
Operating income			39,040				46,822				40,590				81,258
Other income (expense):
Interest expense			(4,946	)			(935	)			(10,083	)			(2,117	)
Interest income			76				296				136				592
Foreign currency gain (loss) and other			790				195				(1,416	)			45
Total other expense			(4,080	)			(444	)			(11,363	)			(1,480	)
Income before income taxes			34,960				46,378				29,227				79,778
Income tax (provision) benefit			(37	)			403				19,917				(733	)
Net income			$34,923				$46,781				$49,144				$79,045
Earnings per share:
Basic			$1.39				$2.06				$1.96				$3.50
Diluted			$1.38				$2.00				$1.94				$3.40
Weighted average shares outstanding:
Basic			25,132				22,661				25,055				22,602
Diluted			25,362				23,334				25,294				23,240

The accompanying notes are an integral part of these condensed consolidated financial statements.

GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the Six Months Ended June 30, 2009

														Accumulated												Deferred
						Additional								Other												Compen-				Total
		Common				Paid-In				Retained				Comprehensive												sation				Stockholders’
		Stock				Capital				Earnings				Income/(Loss)				Treasury Stock								Expense				Equity
																						Share
																		Shares				Value
		(In thousands)
Balance at December 31, 2008		$	250			$	352,843			$	520,630				($17,157	)			211				($6,852	)		$	5,129			$	854,843
Net income											49,144																				49,144
Issuance of common stock			2				5,316																								5,318
Exercise of stock options			2				693																								695
Deferred compensation plan							(1,087	)											14				577				815				305
Unrealized gain on cash flow hedges															2,006																2,006
Translation adjustment															53,911																53,911
Balance at June 30, 2009		$	254			$	357,765			$	569,774				$38,760				225				($6,275	)		$	5,944			$	966,222

The accompanying notes are an integral part of these condensed consolidated financial statements.

GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		Six Months Ended
		June 30,
		2009				2008
		(In thousands)
Cash flows from operating activities:
Net income			$49,144				$79,045
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Depreciation and amortization			25,516				18,263
Gain on sale of assets			(5,501	)			(16,410	)
Impairment charge on assets under construction			46,247				-
Amortization of stock based compensation			4,307				2,687
Amortization of deferred financing costs on debt			352				352
Provision for doubtful accounts receivable, net of write-offs			378				74
Deferred income tax expense (benefit)			(23,600	)			232
Foreign currency transaction (gain) loss			1,736				234
Change in operating assets and liabilities:
Accounts receivable			7,197				1,673
Prepaids and other			(4,407	)			(2,961	)
Accounts payable			(1,970	)			(4,746	)
Accrued liabilities and other			(8,176	)			(1,797	)
Net cash provided by operating activities			91,223				76,646
Cash flows from investing activities:
Purchases of vessels and equipment			(28,778	)			(62,920	)
Proceeds from disposition of vessels and equipment			8,410				21,048
Net cash used in investing activities			(20,368	)			(41,872	)
Cash flows from financing activities:
Proceeds from debt			-				152,143
Repayments of debt			(13,735	)			(12,000	)
Proceeds from exercise of stock options			693				163
Proceeds from issuance of stock			450				259
Net cash provided by (used in) financing activities			(12,592	)			140,565
Effect of exchange rate changes on cash			6,912				(790	)
Net increase in cash and cash equivalents			65,175				174,549
Cash and cash equivalents at beginning of the period			100,761				40,119
Cash and cash equivalents at end of the period			$165,936				$214,668
Supplemental cash flow information:
Interest paid, net of interest capitalized			$10,055				$1,542
Income taxes paid, net			$1,818				$2,540

The accompanying notes are an integral part of these condensed consolidated financial statements.

GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)

GENERAL INFORMATION

          The condensed consolidated financial statements of GulfMark Offshore, Inc. and its subsidiaries included herein have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Unless otherwise indicated, references to “we”, “us”, “our” and the “Company” refer collectively to GulfMark Offshore, Inc. and its subsidiaries. Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, has been condensed or omitted in this Form 10-Q pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to make the information presented not misleading. The consolidated balance sheet as of December 31, 2008, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. It is recommended that these financial statements be read in conjunction with our consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2008.

          In the opinion of management, all adjustments, which include reclassification and normal recurring adjustments necessary to present fairly the financial statements for the periods indicated have been made. All significant intercompany accounts have been eliminated. Certain reclassifications of previously reported information may be made to conform with current year presentation.

          We provide offshore marine support and transportation services primarily to companies involved in the offshore exploration and production of oil and natural gas. Our vessels transport materials, supplies and personnel to offshore facilities, as well as move and position drilling structures. The majority of our operations are conducted in the North Sea, offshore Southeast Asia and the Americas. We also contract vessels into other regions to meet our customers’ requirements.

          Basic Earnings Per Share, or EPS, is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed using the treasury stock method for common stock equivalents. The details of our EPS calculation are as follows (in thousands, except per share amounts):

		Three Months Ended												Three Months Ended
		June 30, 2009												June 30, 2008
										Per Share												Per Share
		Income				Shares				Amount				Income				Shares				Amount
Earnings per share, basic		$	34,923				25,132			$	1.39			$	46,781				22,661			$	2.06
Dilutive effect of common stock options and unvested restricted stock			-				230				(0.01	)			-				673				(0.06	)
Earnings per share, diluted		$	34,923				25,362			$	1.38			$	46,781				23,334			$	2.00

		Six Months Ended												Six Months Ended
		June 30, 2009												June 30, 2008
										Per Share												Per Share
		Income				Shares				Amount				Income				Shares				Amount
Earnings per share, basic		$	49,144				25,055			$	1.96			$	79,045				22,602			$	3.50
Dilutive effect of common stock options and unvested restricted stock			-				239				(0.02	)			-				638				(0.10	)
Earnings per share, diluted		$	49,144				25,294			$	1.94			$	79,045				23,240			$	3.40

(2)		COMPREHENSIVE INCOME
		The components of comprehensive income, net of related tax for the three and six month periods ending June 30, 2009 and 2008 are as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(In thousands)								(In thousands)
Net income		$	34,923			$	46,781			$	49,144			$	79,045
Comprehensive income:
Unrealized gain on cash flow hedge			1,306				-				2,006				-
Foreign currency translation			52,951				4,890				53,911				15,272
Total comprehensive income		$	89,180			$	51,671			$	105,061			$	94,317

          Our accumulated other comprehensive income item relates primarily to our cumulative foreign currency translation adjustments, and adjustments related to the cash flow hedges.

(3)

IMPAIRMENT CHARGE

          In March 2009 we notified a shipyard building three of the vessels in our new build program that they were in default under the construction contract. The default arose as a result of non performance under the terms of the contract caused by financial difficulties of the shipyard. Construction on these vessels has stopped and we are evaluating our remedies under the contract and under applicable law. In April 2009, we concluded that we had a material impairment and recognized a charge of $46.2 million in the first quarter pertaining to the construction in progress related to this contract. That charge represented the full amount of our investment in these vessels. The shipyard building the three vessels is in Chapter 11 bankruptcy proceedings.

(4)

RIGDON ACQUISITION

          On July 1, 2008, under the terms of a Membership Interest and Stock Purchase Agreement, we acquired 100% of the membership interests of Rigdon Marine Holdings, L.L.C. (“Rigdon Holdings”) and all the shares of common stock of Rigdon Marine Corporation (“Rigdon Marine”, together with Rigdon Holdings, “Rigdon”) not owned by Rigdon Holdings for consideration of $554.7 million, consisting of $152.6 million in cash and approximately 2.1 million shares of GulfMark Offshore, Inc. common stock valued at $133.2 million, plus the assumption of $268.9 million in debt (the “Rigdon Acquisition”). We financed the cash portion of the consideration with cash on hand and borrowing of $140.9 million under our current $175 million revolver, which borrowing took place during the second quarter of 2008. In conjunction with the Rigdon Acquisition, we assumed and immediately repaid the outstanding balance of $32.8 million on a construction loan facility maintained by Rigdon Holdings. At July 1, 2008, Rigdon operated a fleet of 22 technologically advanced offshore supply vessels primarily in the domestic Gulf of Mexico, with six additional vessels under construction at time of acquisition all of which have since been delivered.

          The proforma effect of the acquisition and the associated financing on the historical results for the three month and six month periods ending June 30, 2009 and 2008 is presented in the following table (in thousands, except earnings per share).

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenue			$104,656				$111,358				$213,451				$220,288
Operating income			39,040				57,634				40,590				101,383
Net income			34,923				46,456				49,144				80,540
Basic earnings per share			$1.39				$2.05				$1.96				$3.56

(5)

FLEET EXPANSION AND RENEWAL PROGRAM

          During 2009 we have taken delivery of five of the 12 vessels that were under construction at December 31, 2008. In addition, we sold the Highland Sprite in March 2009 for approximately $5.1 million and realized a gain on the sale of approximately $3.2 million. In late February 2009, one of our vessels in Southeast Asia, the Sea Searcher was damaged in a ship fire. The company’s insurance underwriters deemed the vessel a constructive total loss and a gain on the involuntary conversion of approximately $1.4 million was recognized in the first quarter related to this event. In March 2009 we notified a shipyard building three of the vessels in our new build program, that they were in default under the construction contract. Construction on these vessels has stopped and in April 2009, we concluded that we had a material impairment and recognized a charge of $46.2 million in the first quarter of 2009. In addition, we recognized a gain on the sale of the Sefton Supporter of approximately $0.9 million in the second quarter of 2009. This was a special purpose vessel that has not been included in our published vessel counts and which was located in the North Sea. The following table illustrates the details of the vessels added and disposed of since December 31, 2008.

Vessel Additions Since December 31, 2008

Year

Length

Month

Vessel

Region

Type (1)

Built

(feet)

BHP(2)

DWT (3)

Delivered

Swordfish

Americas

Crew

2009

176

7,200

314

Feb-09

Sea Cherokee

SEA

AHTS

2009

250

10,700

2,700

Mar-09

Blacktip

Americas

FSV

2009

181

7,200

543

Apr-09

Tiger

Americas

FSV

2009

181

7,200

543

Jul-09

Sea Comanche

SEA

AHTS

2009

250

10,700

2,700

Jul-09

FSV - Fast supply vessel

PSV - Platform supply vessel

SpV - Specialty vessel, including towing and oil response

SmAHTS - Small anchor handling, towing and supply vessel

Vessels Disposed of Since December 31, 2008(1)

Year

Length

Month

Vessel

Region

Type

Built

(feet)

BHP

DWT

Disposed

Highland Sprite

N.Sea

SpV

1986

194

3,590

1,442

Mar-09

Sea Searcher

SEA

SmAHTS

1976

185

3,850

1,215

Mar-09

          The following table updates our new build program for the delivery of the five vessels listed above and eliminates the three vessels under construction involved in the impairment mentioned in Note 3.

Vessels Currently Under Construction
										Expected				Length												Expected
Vessel		Region				Type				Delivery				(feet)				BHP				DWT				Cost
																										(millions)
Aker 726		N. Sea				PSV					Q4 2009				284				10,600				4,850			$	45.4
Aker 727		N. Sea				PSV					Q2 2010				284				10,600				4,850			$	45.4
Remontowa 20						AHTS					Q2 2010				230				10,000				2,150			$	26.9
Remontowa 21						AHTS					Q3 2010				230				10,000				2,150			$	26.9

          Interest is capitalized in connection with the construction of vessels. During the three month periods ended June 30, 2009 and 2008, $1.0 million and $2.6 million of interest, respectively, was capitalized. During the six month periods ended June 30, 2009 and 2008, $2.4 million and $4.9 million, respectively, was capitalized.

(6)

FAIR VALUE MEASUREMENTS

          In the first quarter of 2008, we adopted Statement of Financial Accounting Standard (“SFAS”) Statement No. 157 “Fair Value Measurements” or SFAS 157. It established a framework for measuring fair value and expanded disclosures about fair value measurements

whereby each asset and liability carried at fair value be classified into one of the following categories:

Level 1:	Quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs that are not corroborated by market data

Financial Instruments

Fair Value Hedges for Purchase Commitment — We maintain fair value hedges associated with firm contractual commitments for future vessel payments denominated in a foreign currency. These forward contracts are designated as fair value hedges and are highly effective, as the terms of the forward contracts are the same as the purchase commitment under the new build contract. As prescribed by SFAS 157, we recognize the fair value of our derivative assets as a Level 2 valuation. We determined the fair value of our financial instrument position based upon the forward contract price and the foreign currency exchange rate as of June 30, 2009. At June 30, 2009, the fair value of our derivatives was approximately $5.4 million.

Interest Rate Cash Flow Hedges — We have interest rate swap agreements for a portion of our Senior Facility indebtedness that has the effect of fixing the floating component of the interest rate at 4.725% on approximately $91.8 million of the Senior Facility. The interest rate swaps are accounted for as cash flow hedges. As prescribed by SFAS 157, we recognize the fair value of our derivative assets as a Level 2 valuation. We determined the fair value of our derivative financial instrument position based upon a series of calculations that include present value calculations, involving our principal amount and estimated future LIBOR rates. We report changes in the fair value of cash flow hedges in accumulated other comprehensive income and as of June 30, 2009, $4.1 million has been recorded.

          The following table presents information about our assets (liabilities) measured at fair value on a recurring basis as of June 30, 2009, and indicates the fair value hierarchy we utilized to determine such fair value (in millions).

		Level 1				Level 2				Level 3				Total
Fair Value Hedge		$	-			$	5.4			$	-			$	5.4
Purchase Commitment			-				(5.4	)			-				(5.4	)
Cash Flow Hedge			-				(6.0	)			-				(6.0	)
		$	-			$	(6.0	)		$	-			$	(6.0	)

(7)

INCOME TAXES

          We consider earnings of certain foreign subsidiaries to be permanently reinvested, and as such, we have not provided for any U.S. federal or state income taxes on these earnings except for a portion of our current year foreign earnings that have been or may be distributed in 2009 and are taxable in the U.S. Our overall tax provision is affected by the mix of our operations within various taxing jurisdictions. Our North Sea operations based in the U.K. and Norway have a special tax incentive for qualified shipping operations known as a tonnage tax. These tonnage tax regimes provide for a tax based on the net tonnage weight of a qualified vessel, resulting in significantly lower taxes than those that would apply if we were not a qualified shipping

company in those jurisdictions. Further, most of our Southeast Asia region vessels are owned by our Singapore subsidiary, which has an exemption through December 2017 (with additional extensions available) for vessel profits. During the three months ended June 30, 2009, our income was derived principally from lower tax jurisdictions.

          Our 2009 tax provision includes two discrete tax benefits, $6.5 million related to a change in Norwegian tonnage tax for prior years and $17.0 million from the previously discussed impairment charge, that were recorded in the quarter ended March 31, 2009.

          Our second quarter of 2009 income tax provision was $0.04 million, or a 0.10% effective tax rate. There were no discrete tax items in the second quarter of 2009.

(8)

COMMITMENTS AND CONTINGENCIES

          We have contingent liabilities and future claims for which we have made estimates of the amount of the eventual cost to liquidate such liabilities or claims. These may involve threatened or actual litigation where damages have not been specifically quantified but we have made an assessment of our exposure and recorded a provision in our accounts for the expected loss. Other claims or liabilities, including those related to taxes in foreign jurisdictions or the industry-wide, multi-employer, defined benefit pension fund, Merchant Officers Pension Fund in the U.K., may be estimated based on our experience or estimated liabilities in these matters and, where appropriate, the advice of outside counsel or other outside experts. In March 2009, we made an accrual related to the Merchant Officers Pension Fund of approximately $0.4 million based on the latest information provided to us from the fund trustees. Upon the ultimate resolution of the uncertainties surrounding our estimates of contingent liabilities and future claims, our future reported financial results would be impacted by the difference between our estimates and the actual amounts paid to settle them. Our contingent liabilities are based on the most recent information available to us regarding the nature of the exposure. In the recent past, our estimates for contingent liabilities have been sufficient to cover the actual amount of our exposure.

(9)

NEW ACCOUNTING PRONOUNCEMENTS

          In April 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) FAS No. 157-4 “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. FSP FAS No. 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, “Fair Value Measurements”, when the volume and level of activity for the asset or liability have significantly decreased. FSP FAS No. 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. The standard is effective for periods ending after June 15, 2009. We have evaluated FSP FAS No. 157-4 and have determined that it will not have an impact on our results of operations or financial position.

          In April 2009, the FASB issued (FSP) FAS No. 115-2, FAS No. 124-2, and EITF No. 99-20-2, “Recognition and Presentation of Other-Than-Temporary Impairments”, which provides additional guidance to provide greater clarity about the credit and noncredit component of an other-than-temporary impairment event and to more effectively communicate when an other-than-temporary impairment event has occurred. This FSP applies to debt securities. We have evaluated FSP FAS No. 115-2, FAS No. 124-2 and EITF No. 99-20-2 and have determined that it will not have an impact on our results of operations or financial position.

          In April 2009, the FASB issued FASB Staff Position No. (FSP) FAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments”. FSP FAS No. 107-1 and APB No. 28-1 amends FASB Statement No. 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting”, to require those disclosures in all interim financial statements. These standards are effective for periods ending after June 15, 2009. We have evaluated FSP FAS No. 107-1 and APB No. 28-1 and have determined that they will not have an impact on our results of operating or financial position.

          In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No. 165 establishes U.S. GAAP for the accounting and disclosure surrounding events that occur subsequent to the balance sheet date but prior to the date the financial statements are issued or are available to be issued. The standard does not significantly change current practice and is effective for interim and annual periods ending after June 15, 2009 and is to be applied prospectively. We adopted SFAS No. 165 and it did not have a material impact on our consolidated financial statements. We evaluated all events or transactions that occurred after June 30, 2009 up through July 28, 2009 and during this period no material subsequent events came to our attention.

          In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140”. SFAS No. 166 will require more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. SFAS No. 166 is effective for fiscal years beginning after November 15, 2009. Early adoption is prohibited. We are evaluating the impact, if any, this standard will have on our financial statements.

          In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”. SFAS No. 167 changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. SFAS No. 167 is effective for fiscal years beginning after November 15, 2009. We are evaluating the impact, if any, this standard will have on our financial statements.

          In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”. SFAS No.168 establishes the Codification as the source of authoritative U.S. GAAP and supersedes all non-SEC accounting and reporting standards. This standard is effective for interim and annual periods ending after September 15, 2009. The adoption of the standard will not have a material effect on our consolidated financial statements. The primary effect will be in the consolidated footnotes where references to U.S. GAAP and to new FASB pronouncements will be based on the sections of the code rather than to individual FASB standards.

(10)

OPERATING SEGMENT INFORMATION

          We operate three segments: the North Sea, Southeast Asia and the Americas, each of which is considered a reportable segment under SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”. Our management evaluates segment performance primarily based on operating income. Cash and debt are managed centrally. Because the regions do not manage those items, the gains and losses on foreign currency remeasurements associated

with these items are excluded from operating income. Our management considers segment operating income to be a good indicator of each segment’s operating performance from its continuing operations, as it represents the results of the ownership interest in operations without regard to financing methods or capital structures. Each operating segment’s operating income (loss) is summarized in the following table, and detailed discussions below.

Operating Income (Loss) by Operating Segment

						Southeast
		North Sea				Asia				Americas				Other				Total
		(In thousands)
Quarter Ended June 30, 2009
Revenue		$	46,324			$	19,517			$	38,815			$	-			$	104,656
Direct operating expenses			17,378				2,068				19,686				-				39,132
Drydock expense			657				489				1,496				-				2,642
General and administrative expenses			2,463				578				2,194				6,330				11,565
Depreciation and amortization expense			4,215				1,703				7,029				199				13,146
Gain on sale of assets			(869	)			-				-				-				(869	)
Operating income (loss)		$	22,480			$	14,679			$	8,410			$	(6,529	)		$	39,040
Quarter Ended June 30, 2008
Revenue		$	53,452			$	20,175			$	8,266			$	-			$	81,893
Direct operating expenses			22,519				2,992				4,401				-				29,912
Drydock expense			2,593				(515	)			552				-				2,630
General and administrative expenses			3,335				506				681				4,899				9,421
Depreciation and amortization expense			6,422				1,830				1,090				173				9,515
Gain on sale of assets			(13,034	)			(3,373	)			-				-				(16,407	)
Operating income (loss)		$	31,617			$	18,735			$	1,542			$	(5,072	)		$	46,822

						Southeast
		North Sea				Asia				Americas				Other				Total
		(In thousands)
Six Months Ended June 30, 2009
Revenue		$	90,235			$	37,186			$	86,030			$	-			$	213,451
Direct operating expenses			36,835				4,066				38,713				-				79,614
Drydock expense			2,317				1,049				1,514				-				4,880
General and administrative expenses			4,955				1,411				4,303				11,436				22,105
Depreciation and amortization expense			8,221				3,262				13,648				385				25,516
Gain on sale of assets			(4,058	)			(1,438	)			(5	)			-				(5,501	)
Impairment charge			-				-				46,247				-				46,247
Operating income (loss)		$	41,965			$	28,836			$	(18,390	)		$	(11,821	)		$	40,590
Six Months Ended June 30, 2008
Revenue		$	113,960			$	36,403			$	14,878			$	-			$	165,241
Direct operating expenses			44,681				5,369				7,560				-				57,610
Drydock expense			5,122				445				755				-				6,322
General and administrative expenses			6,159				912				1,132				9,995				18,198
Depreciation and amortization expense			12,921				3,186				1,860				296				18,263
Gain on sale of assets			(13,037	)			(3,373	)			-				-				(16,410	)
Operating income (loss)		$	58,114			$	29,864			$	3,571			$	(10,291	)		$	81,258

ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          We provide offshore marine support and transportation services primarily to companies involved in the offshore exploration and production of oil and natural gas. Our vessels transport drilling materials, supplies and personnel to offshore facilities, as well as move and position drilling structures. The North Sea, offshore Southeast Asia, offshore West Africa, offshore Middle East, offshore Brazil and the Gulf of Mexico are each major markets that employ a large number of vessels. Vessel usage is also significant in other international markets, including offshore India, offshore Australia, offshore Trinidad, the Persian Gulf and the Mediterranean Sea. The industry is relatively fragmented, with more than 20 major participants and numerous small regional competitors. We currently operate a fleet of 97 offshore support vessels in the following regions: 42 vessels in the North Sea, 14 vessels offshore Southeast Asia, and 41 vessels in the Americas. Our owned fleet is one of the world’s youngest, largest and most geographically balanced, high specification offshore support vessel fleets and our owned vessels have an average age of approximately seven years.

          Our results of operations are directly impacted by the level of activity in worldwide offshore oil and natural gas exploration, development and production. This activity is in turn influenced by trends in oil and natural gas prices. Oil and natural gas prices are affected by a host of geopolitical and economic forces, including the fundamental principles of supply and demand. Over the last few years commodity prices have been at record highs, resulting in oil and natural gas companies increasing exploration and development activities. However, as a result of the world economic crisis, commodity prices have declined and we have experienced a reduction in the level of activity.

          The operations of our fleet may be subject to seasonal factors. Operations in the North Sea are often at their highest levels from April to August, and at their lowest levels from November to February. Operations in our other areas, although involving some seasonal factors, tend to remain more consistent throughout the year. We have historically, to the extent possible, accomplished the majority of our regulatory drydocks during these seasonal decreases in demand in order to minimize downtime during our traditionally peak demand periods. When a vessel is drydocked, we incur not only the drydocking cost but also the loss of revenue from the vessel during the drydock period. The demands of the market, the expiration of existing contracts, the start of new contracts and the availability allowed by our customers influence the timing of drydocks throughout the year. During the first six months of 2009, we completed 178 drydock days, compared to 252 drydock days completed in the same period last year.

          We provide management services to other vessel owners for a fee, which is included in revenue. Charter revenues and vessel expenses of these managed vessels are not included in our operating results. These vessels are excluded for purposes of calculating fleet rates per day worked and utilization in the applicable periods.

          In addition to direct operating costs, we incur fixed charges related to the depreciation of our fleet and costs for routine drydock inspections, which are maintenance and repairs designed to ensure compliance with applicable regulations and maintaining certifications for our vessels with various international classification societies.

Critical Accounting Policies

          There have been no changes to the critical accounting policies used in our reporting of results of operations and financial position. For a discussion of our critical accounting policies see Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2008.

Results of Operations

          The table below sets forth, by region, the average day rates and utilization for our vessels and the average number of vessels owned or chartered during the periods indicated. This fleet generates substantially all of our revenues and operating profit. We use the information that follows to evaluate the performance of our business.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenues by Region (000’s) (a):
North Sea Based Fleet (c)			$46,324				$53,452				$90,235				$113,960
Southeast Asia Based Fleet			19,517				20,175				37,186				36,403
Americas Based Fleet			38,815				8,266				86,030				14,878
Rates Per Day Worked (a) (b):
North Sea Based Fleet (c)			$21,199				$21,766				$21,138				$23,384
Southeast Asia Based Fleet			21,201				17,992				20,959				16,179
Americas Based Fleet			15,704				15,854				16,541				14,507
Overall Utilization (a) (b):
North Sea Based Fleet			93.1	%			95.3	%			88.8	%			93.8	%
Southeast Asia Based Fleet			93.8	%			86.6	%			90.5	%			91.3	%
Americas Based Fleet			79.9	%			85.5	%			86.2	%			86.7	%
Average Owned/Chartered Vessels (a) (d):
North Sea Based Fleet (c)			25.0				27.0				25.4				27.7
Southeast Asia Based Fleet			11.0				14.8				11.1				13.9
Americas Based Fleet			34.8				7.0				34.0				6.7
Total			70.8				48.8				70.5				48.3

(a)		Includes all owned or bareboat chartered vessels.
(b)		Rate per day worked is defined as total charter revenues divided by number of days worked. Utilization rate is defined as the total days worked divided by total days of availability in the period.
(c)		Revenues for vessels in the North Sea based fleet are primarily earned in Pound Sterling (GBP), Norwegian Kroner (NOK) and Euros, and have been converted to U.S. Dollars (US$) at the average exchange rate for the period. The average equivalent exchange rate per one US$ for the periods indicated is as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		1 US$=								1 US$=
GBP			0.644				0.507				0.669				0.506
NOK			6.483				5.069				6.665				5.190
Euro			0.734				0.639				0.750				0.653

(d)

Average number of vessels is calculated based on the aggregate number of vessel days available during each period divided by the number of calendar days in such period. Includes owned and bareboat vessels only, and is adjusted for vessel additions and dispositions occurring during each period.

Comparison of the Three Months Ended June 30, 2009 with the Three Months Ended June 30, 2008

          For the quarter ended June 30, 2009, we had net income of $34.9 million, or $1.38 per diluted share, on revenues of $104.7 million. For the same period in 2008, net income was $46.8 million, or $2.00 per diluted share on revenues of $81.9 million.

          Our revenues for the quarter ended June 30, 2009, increased $22.8 million, or 28%, compared to the second quarter of 2008. The increase in revenue was due mainly to the $27.9 million contribution related to the Rigdon Acquisition that occurred July 1, 2008. The increase was offset by a decrease in net capacity of $2.6 million related to the sale of seven of our older vessels, offset by the additions of the Sea Cherokee and Sea Choctaw in 2009. Also, offsetting the increase was the combination of the currency effect and the overall decrease in day rates from $19,872 in the second quarter of 2008 to $18,712 in the current year quarter, which negatively impacted revenue by $7.1 million. Overall utilization excluding the acquired Rigdon vessels increased from 91.2% in the second quarter of 2008 to 93.4% in the current year quarter, which increased revenue by $4.6 million.

North Sea

          Revenues in the North Sea region decreased by $7.1 million, or 13.3%, to $46.3 million in the second quarter of 2009. This decrease was primarily a result of a combination of the strengthening of the US$ and the decrease in day rates from $21,766 to $21,199, which contributed $7.1 million to the decrease in revenue. The region also experienced a decrease of $3.7 million in capacity resulting primarily from the sale of the two vessels. Even though utilization decreased from 95.3% in the second quarter of 2008 to 93.1% of the current quarter, revenue increased by $3.7 million as the mix of days worked associated with vessels on higher day rates was positive. Operating income decreased $9.1 million over the prior year quarter, due to the decrease in revenue offset by the decrease in operating expenses and a decrease of the gain on asset sales of $12.1 million. Drydock expense decreased by $1.9 million due primarily to approximately 35 less drydock days. Depreciation expense decreased mainly due to fewer vessels as a result of the vessel sales. General and administrative expense in the second quarter of 2009 was $2.4 million compared to $3.3 million in the prior year quarter. The decrease is primarily due to the currency effect of a stronger US$.

Southeast Asia

          Revenues for our Southeast Asia based fleet decreased by $0.7 million to $19.5 million in the second quarter of 2009. Capacity decreased revenue by $0.2 million as a result of the disposal of vessels throughout 2008. This is offset by the addition of two new vessels in 2009, the Sea Cherokee and Sea Choctaw. Utilization for the first quarter of 2008 was 86.6% compared to the current quarter of 93.8%, which increased revenue by $0.5 million. Even though day rates increased from the prior year quarter, the negative effect of the mix of days worked to vessels on lower day rates reduced revenue by $1.0 million. Operating income for Southeast Asia was $14.7 million in the second quarter of 2009 compared to $18.7 million in the same 2008 quarter. The decrease is due mainly to the decrease in revenue coupled with the decrease of the gain on asset sales of $3.4 million.

Americas

          The Americas region revenues increased by $30.5 million compared to the second quarter of 2008. The increase in revenue is due primarily to the July 1, 2008 Rigdon Acquisition, which contributed $27.9 million in the current year quarter. Also contributing to the increase in revenue was the mobilization of the Sea Kiowa into the region. Utilization excluding the Rigdon Acquisition increased from 85.5% in the second quarter of 2008 to 93.8% in the current year quarter which contributed $0.5 million to the increase in revenue. The overall mix in day rates and currency fluctuations in the current quarter compared to the prior year quarter negatively impacted revenue by $0.9 million. Operating income was $8.4 million in the second quarter of 2009 compared to $1.5 million in the second quarter of 2009. The increase is due mainly to the effect of the Rigdon Acquisition.

Other

          Other expenses in the second quarter of 2009 increased by $3.6 million compared to the prior year quarter resulting primarily from $4.0 million in higher interest expense as a result of higher borrowings under the revolving line of credit and interest incurred on debt assumed through the Rigdon Acquisition. The effect of the foreign currency exchange rates contributed an additional gain of $0.6 million in 2009 compared to the second quarter of 2008, and interest income earned was lower by $0.2 million in the second quarter of 2009 compared to the prior year quarter.

Tax Provision

          Our income tax provision for the second quarter was $0.04 million, compared to the $0.4 million benefit, for the second quarter of 2008. The decrease in the 2009 period reflected a change in the mix of our pre tax profits from high to low tax jurisdictions.

Comparison of the Six Months Ended June 30, 2009 with the Six Months Ended June 30, 2008

          For the six months ended June 30, 2009, we had net income of $49.1 million, or $1.94 per diluted share, on revenues of $213.5 million. During the same period in 2008, net income was $79.0 million, or $3.40 per diluted share, on revenues of $165.2 million.

          Our year to date revenue increased 29% or $48.2 million year over year. This increase was primarily due to the Rigdon Acquisition offset by lower day rates in all regions. Also contributing to the increase in earnings was the full year effect of the addition of the Sea Apache and Sea Kiowa that occurred in the first quarter of 2008 and the additions of the Sea Cherokee, and Sea Choctaw that occurred in 2009. Offsetting this was the sale of seven vessels and the sale of the Sefton Supporter, which has not been included in our published vessel count.

          Operating income decreased by $40.7 million, from $81.3 million in 2008 to $40.6 million this year. The decrease is due largely to the $46.2 million impairment charge resulting from a shipyard defaulting on the construction of three vessels. Operating income excluding the charge would have been $86.8 million for the first six months of 2009 compared to $81.3 million for the same 2008 period. The increase, before the impairment charge, is due primarily to the income generated from the Rigdon Acquisition offset by the decrease of the gain on sale of assets.

North Sea

          North Sea revenue decreased 20.8%, or $23.7 million in 2009 compared to 2008. The effect of the strengthening of the US$ and the decrease in day rates from $23,384 in 2008 to $21,138 in 2009 contributed $16.8 million to the decrease in revenue. Also contributing $6.9 million to the decrease in revenue was sale of two vessels in 2008, and the mobilization of the Highland Piper out of the region. Operating income decreased by $16.1 million compared to 2008, resulting primarily from the decrease in gain on sale of assets and the effect of the strengthening US$ on both revenue and expenses.

Southeast Asia

          Revenue for our Southeast Asia based fleet increased by $0.8 million, from $36.4 million in the first six months of 2008 to $37.2 million in the same 2009 period. The increase was primarily attributable to an increase in the fleet size in the region as a result of the full year effect of the additions of the Sea Apache and Sea Kiowa in early 2008, and the additions of the Sea Cherokee and Sea Choctaw in 2009. Offsetting the additions was the sale of three of our older vessels in 2008 and the loss of the Sea Searcher in 2009. Also the Sea Kiowa, which was added in early 2008, was subsequently mobilized to the Americas region. Day rates increased from $16,179 in 2008 to $20,959 in 2009, which contributed $0.3 million to the increase in revenue. Utilization decreased from 91.3% in 2008 to 90.5% in 2009, reducing revenue by $0.6 million. Operating income decreased from $29.9 million in 2008 to $28.8 million this year. The decrease is due mainly to the decrease in the gain on asset sales.

Americas

          Our Americas region revenue increased $71.2 million, from $14.9 million in 2008 to $86.0 million in 2009. The increase in revenue is due primarily to the July 1, 2008 Rigdon Acquisition which contributed $64.4 million to the increase. Also contributing $6.6 million to the increase was the mobilization into the region of the Highland Piper and Sea Kiowa. Excluding the $46.2 million impairment charge, operating income increased $24.3 million from 2008 resulting primarily from the effect of the Rigdon Acquisition.

Other

          In the six months ended June 30, 2009, other expenses totaled $11.4 million, an increase of $9.9 million from 2008. The increase was due primarily to higher interest expense of $8.0 million as a result of higher borrowings under our revolving line of credit and interest incurred on outstanding debt assumed through the Rigdon Acquisition. The effect of the foreign currency exchange rates contributed a loss of $1.4 million in 2009 compared to 2008. Interest income earned in 2009 was $0.1 million compared to $0.6 million in 2008.

Tax Provision

          Our income tax provision for the first half of 2009 was a $19.9 million benefit compared to a provision of $0.7 million or 0.92% effective tax rate, for the same 2008 period. The decrease in our effective tax rate is due to our recording of tax benefits in the first quarter of 2009 for the impairment charge and the change in the Norway tonnage tax regime.

Liquidity, Capital Resources and Financial Condition

          Our ongoing liquidity requirements are generally associated with our need to service debt, fund working capital, acquire or improve equipment and make other investments. Since inception, we have been active in the acquisition of additional vessels through both the resale market and new construction. Bank financing, equity capital and internally generated funds have historically provided funding for these activities. Internally generated funds are directly related to fleet activity and vessel day rates, which are generally dependent upon the demand for our vessels which is ultimately determined by the supply and demand of crude oil and natural gas.

          On July 1, 2008, in conjunction with the Rigdon Acquisition we assumed a $224 million Senior Secured Credit Facility held with a syndicate of banks led by DVB Bank NV as agent, and a $85 million Subordinated Secured Credit Facility held by DVB Bank NV. Both facilities mature on June 30, 2010, and, as such, the combined outstanding liability of $209.6 million as of June 30, 2009, has been reclassified from long term to current. Our current intention is to refinance a substantial majority of this facility before the end of the year. There can be no assurances that we will be able to refinance these facilities on terms that would be acceptable, but we are in ongoing discussions and negotiations with different banks that have expressed an interest in providing the refinancing. If we do not refinance, we currently anticipate repaying the debt at maturity through a combination of cash on hand, cash generated by operations over the next year, and borrowing on the available portion of our revolving line of credit.

          Net working capital at June 30, 2009, was a deficit of $7.2 million. Cash on hand at June 30, 2009 totaled $165.9 million. Net cash provided by operating activities was $54.2 million for the three months ended June 30, 2009, and cash used in investing activities for the same three months was $3.1 million.

          We anticipate that our current level of cash on hand, cash flows from operations, and availability under our credit facility will be adequate to repay our debts due and will provide sufficient resources to finance our operating requirements. However, our ability to fund working capital, capital expenditures and debt service in excess of cash on hand will be dependent upon the success of our operations. To the extent that existing sources are insufficient to meet those cash requirements, we would seek other debt or equity financing; however, we can give no assurances that such debt or equity financing would be available on acceptable terms.

Currency Fluctuations and Inflation

          The majority of our operations are international; therefore we are exposed to currency fluctuations and exchange rate risks. Charters for vessels in the North Sea fleet are primarily denominated in Pounds Sterling (GBP) with a portion denominated in Norwegian Kroner (NOK) and Euros. Mostly all of our operating costs are denominated in the same currency as charter hire in order to reduce the risk of currency fluctuations. For the periods indicated, the average equivalent exchange rate per one U.S. Dollar (US$) were:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		1 US$=								1 US$=
GBP			0.644				0.507				0.669				0.506
NOK			6.483				5.069				6.665				5.190
Euro			0.734				0.639				0.750				0.653

          Our North Sea based fleet generated $46.3 million in revenue and $22.5 million in operating income for the three months ended June 30, 2009 and $90.2 million in revenue and $42.0 million in operating income for the six months ended June 30, 2009.

          Reflected in the accompanying balance sheet as of June 30, 2009, is $38.8 million in accumulated other comprehensive income that fluctuates based on differences in foreign currency exchange rates as of each balance sheet date. Also included in accumulated other comprehensive income was a gain of $4.1 million related to the cash flow hedges. Changes in the other comprehensive income are primarily non-cash items that are attributable to investments in vessels and dollar based capitalization between our parent company and our foreign subsidiaries.

          After evaluating the U.S. Dollar debt, we have determined that it is in our best interest not to use any financial instruments to hedge the exposure of our revenue and costs of operations to currency fluctuations under present conditions. Our decision is based on a number of factors, including among others:

	•		the cost of using hedging instruments in relation to the risks of currency fluctuations,
	•		the propensity for adjustments in currency denominated vessel day rates over time to compensate for changes in the purchasing power of the currency as measured in U.S. Dollars,
	•		the level of U.S. Dollar denominated borrowings available to us, and
	•		the conditions in our U.S. Dollar generating regional markets.

          One or more of these factors may change and we, in response, may choose to use financial instruments to hedge risks of currency fluctuations with regards to our revenue and costs of operations. However, in 2007, we entered into forward currency contracts to specifically hedge the foreign currency exposure related to firm contractual commitments in the form of future vessel payments. These hedging relationships were formally documented at inception and the contracts have been and continue to be highly effective. As a result, by design, there is an exact offset between the gain or loss exposure in the related underlying contractual

commitment. The balance sheet reflects the change in the fair value of the foreign currency contracts and purchase commitments of $5.4 million, a decrease of $2.4 million from year-end 2008.

          We also have interest rate swap agreements for a portion of the Senior Facility indebtedness that has fixed the interest rate at 4.725% on a portion of the Senior Facility. These interest rate swaps are accounted for as cash flow hedges. We report changes in the fair value of the cash flow hedges in accumulated other comprehensive income. The consolidated balance sheet also contains cash flow hedges within other long term liabilities, reflecting the fair value of the interest rate swaps which was $6.0 million at June 30, 2009. For the six months ended June 30, 2009 a gain of $2.0 million has been reclassified from other comprehensive income to interest expense. We expect to reclassify $3.2 million of deferred loss on the interest rate swaps to interest expense during the next 12 months.

          To date, general inflationary trends have not had a material effect on our operating revenues or expenses.

Forward-Looking Statements

          This Form 10-Q contains certain forward-looking statements and other statements that are not historical facts concerning, among other things, market conditions, the demand for marine and transportation support services and future capital expenditures. These statements are subject to certain risks, uncertainties and assumptions, including, without limitation:

	•		operational risk,
	•		catastrophic or adverse sea or weather conditions,
	•		dependence on the oil and gas industry,
	•		prevailing oil and natural gas prices,
	•		expectations about future prices,
	•		inability to complete or delay or cost over runs on construction projects,
	•		ongoing capital expenditure requirements,
	•		uncertainties surrounding environmental and government regulation,
	•		risk relating to leverage,
	•		risks of foreign operations,
	•		risk of war, sabotage or terrorism,
	•		assumptions concerning competition,
	•		risks of currency fluctuations, and
	•		other matters.

          These statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Such statements are subject to risks and uncertainties, including the risk factors discussed above and those discussed in our Form 10-K for the year ended December 31, 2008, filed with the SEC, general economic and business conditions, the business opportunities that may be presented to and pursued by us, changes in law or regulations and other factors, many of which are beyond our control.

          We cannot assure you that we have accurately identified and properly weighed all of the factors which affect market conditions and demand for our vessels, that the information upon which we have relied is accurate or complete, that our analysis of the market and demand for our

vessels is correct, or that the strategy based on that analysis will be successful.

ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity

          Our financial instruments that are potentially sensitive to changes in interest rates include our 7.75% Senior Notes. As of June 30, 2009, the fair value of these notes, based on quoted market prices, was approximately $148.8 million compared to a carrying amount of $159.7 million.

Exchange Rate Sensitivity

          We operate in a number of international areas and are involved in transactions denominated in currencies other than U.S. Dollars, which exposes us to foreign currency exchange risk. At various times we may utilize forward exchange contracts, local currency borrowings and the payment structure of customer contracts to selectively hedge exposure to exchange rate fluctuations in connection with monetary assets, liabilities and cash flows denominated in certain foreign currency. We do not hold or issue forward exchange contracts or other derivative financial instruments for speculative purposes.

          Other information required under Item 3 has been incorporated into Management’s Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein.

ITEM 4.		CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures.

          Based on their evaluation of our disclosure controls and procedures as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures are effective for the period covered by the report ensuring that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b)

Evaluation of internal controls and procedures.

          As of December 31, 2008, our management determined that our internal controls over financial reporting were effective. Our assessment of the effectiveness of our internal controls over financial reporting as of December 31, 2008, has been audited by UHY LLP, an independent public accounting firm, as stated in our Form 10-K for the year ended December 31, 2008 filed with the SEC.

          There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II		OTHER INFORMATION

ITEM 4.		SUBMISSION OF MATTERS OF A VOTE OF SECURITY HOLDERS

          At our annual meeting of stockholders held on May 14, 2009, our stockholders approved the election of all nominated directors, as follows:

Name of Nominee		For				Withheld
Peter I. Bijur			20,264.539				351,787
David J. Butters			20,194,461				421,865
Brian R. Ford			20,439,990				176,336
Louis S. Gimbel, 3rd			20,344,865				271,461
Sheldon S. Gordon			20,436,205				180,121
Robert B. Millard			20,369,397				246,929
Robert T. O’Connell			19,880,844				735,482
Larry T. Rigdon			19,229,021				1,387,305
Rex C. Ross			20,436,205				180,121
Bruce A. Streeter			20,353,244				263,082

          At our annual meeting of stockholders held on May 14, 2009, our stockholders approved the selection of UHY LLP as the Company’s independent auditors for the fiscal year ending December 31, 2009, as follows:

For				Against				Abstained
	20,523,260				90,604				2,463

ITEM 6.		EXHIBITS

Exhibits

          See Exhibit Index for list of Exhibits filed herewith.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 28, 2009

EXHIBIT INDEX

				Filed Herewith or
				Incorporated by Reference
				from the
Exhibits		Description		Following Documents
3.1		Certificate of Incorporation, dated December 4, 1996		Incorporated by reference to Exhibit 3.1 to our annual report on Form 10-K for the year ended December 31, 2008
3.2		Certificate of Amendment of Certificate of Incorporation, dated March 6, 1997		Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-3, Registration No. 333-153459, filed on September 12, 2008
3.3		Certificate of Amendment of Certificate of Incorporation, dated May 24, 2002		Incorporated by reference to Exhibit 4.3 to our Registration Statement on Form S-3, Registration No. 333-153459, filed on September 12, 2008
3.4		Bylaws, dated December 5, 1996		Incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-4, Registration No. 333-24141, filed on March 28, 1997
3.5		Amendment No. 1 to Bylaws		Incorporated by reference to Exhibit 3.1 to our Form 8-K/A filed on September 17, 2007
4.1		See Exhibit Nos. 3.1, 3.2 and 3.3 for provisions of the Certificate of Incorporation and Exhibits 3.4 and 3.5 for provisions of the Bylaws defining the rights of the holders of Common Stock		Incorporated by reference to Exhibit 3.1 to our annual report on Form 10-K for the year ended December 31, 2008, Exhibits 4.2 and 4.3 to our Registration Statement on Form S-3, Registration No. 333-153459, filed on September 12, 2008, Exhibit 3.3 to our Registration Statement on Form S-4, Registration No. 333-24141, filed on March 28, 1997, and Exhibit 3.1 to our Form 8-K/A filed on September 17, 2007
4.2		Specimen Certificate for GulfMark Offshore, Inc. Common Stock, $0.01 par value		Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-1, Registration No. 333-31139, filed on July 11, 1997
4.3		Indenture, dated as of July 21, 2004, among GulfMark Offshore, Inc., as Issuer, and U.S. Bank National Association, as Trustee, including a form of the Company’s 7.75% Senior Notes due 2014		Incorporated by reference to Exhibit 4.4 to our quarterly report on Form 10-Q for the quarter ended September 30, 2004

4.4		Registration Rights Agreement, dated July 21, 2004, among GulfMark Offshore, Inc. and the initial purchasers		Incorporated by reference to Exhibit 4.5 to our quarterly report on Form 10-Q for the quarter ended September 30, 2004
4.5		Registration Rights Agreement, dated July 1, 2008, among GulfMark Offshore, Inc. and certain of the Rigdon Shareholders		Incorporated by reference to Exhibit 4.5 to our current report on Form 8-K filed on July 7, 2008
31.1		Section 302 certification for B.A. Streeter		Filed herewith
31.2		Section 302 certification for Q.V. Kneen		Filed herewith
32.1		Section 906 certification furnished for B.A. Streeter		Filed herewith
32.2		Section 906 certification furnished for Q. V. Kneen		Filed herewith