Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question comes from Jim Rollyson. Your line is now open.
James Rollyson – Raymond James
Good morning guys.
Tony Tripodo
Good morning Jim.
James Rollyson – Raymond James
Nice improvement on the balance sheet. Owen, you talked about the, some of the issues that hit 2Q margins or actually Cameron did and you obviously also have a softer second half outlook on the revenue side, when you kind of balance those things out, how do you feel about margins during the second half for marine contracting?
Tony Tripodo
Yeah, Jim I’ll take it. I think margins are going to decline and they are going to decline because of lower asset utilization. I think start it off with the Express. The Express is going through regulatory dry-dock and is transiting all the way from India to ultimately the Gulf of Mexico. Right now, I believe she is in Spain for dry-dock. So you are going to have that vessel essentially not earning any revenues and then when she arrives in the Gulf of Mexico she is going to be doing internal work, laying the Danny pipeline. And I think we been pretty consistent in saying, our visibility was the second half of the year was going to be softer and I think across the board, that's going to be the case as well and I thought when you have lower vessel utilization, it's going to lead to lower margins. There is no other way around it.
James Rollyson – Raymond James
Sure. And are you guys starting to see anything in terms of bids for going into next year at all yet?
Owen Kratz
Yes, Jim it's not as dire as what we might have first predicted, but we're not sitting here saying that it's going to be robust either, it's going to be a tough market. I’ll just, a little further comment on what Tony said it's partly the soft market, but the margin impact from the Express is a result of our change in strategy of returning our assets to the Gulf of Mexico and focusing on our Gulf of Mexico market in support of our long-term stronger clients. So during this transition period of getting the Express back to the Gulf of Mexico, that’s going to have some near-term margin impact that should rebound later on.
James Rollyson – Raymond James
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