Maritime Telecommunications Network (MTN), a Miramar, Fla.-based provider of ship-to-shore satellite communications, is aggressively exploring its opportunities to serve customers who operate offshore oil and gas rigs.

MTN traditionally has gathered the bulk of its revenues from cruise ship communications but now is looking to expand beyond that profitable niche into the offshore oil and gas sector that has been a comparatively small part of its overall business. The company’s efforts were rewarded last week when it announced a three-year pact to provide equipment and services to Houston-based GlobalSantaFe Corporate Services.

The deal would allow GlobalSanteFe personnel on nine rigs to receive worldwide communications coverage. That contract is likely to be followed in quick order by other deals in the same sector.

MTN CEO David Kagan is keen to expand in that sector since the company was purchased recently by New York-based investment firm Falconhead Capital and Irving, Texas-based Natural Gas Partners, a private equity firm in the oil and gas sector.

Natural Gas Partners has a family of funds that have invested in excess of $1 billion in the oil and gas industry. Since 1988, the investment firm has sponsored fifty-two independent energy companies focused in North America.

GlobalSanteFe Order

Under its recent agreement, MTN will provide GlobalSantaFe with VSAT services using C-Band and Ku-Band capabilities.

John Truschinger, GlobalSantaFe’s vice president of information services and technology, said that his company was enticed by MTN’s ability to provide global systems and equipment on economical terms. The comprehensive communications services will give GlobalSantaFe’s fleet of drilling rigs access to the latest satellite technology to enhance communication from remote offshore locations, he explained.

GlobalSantaFe is a sizable operation with more than 8,000 employees. It was formed in November 2001 merger between two drilling companies, Global Marine Inc. and Santa Fe International Corporation. Overall, GlobalSantaFe operates a fleet of 58 offshore drilling rigs and 31 land rigs.

Virtually all of the world’s offshore oil fields use satellite communications to address the requirements of deepwater exploration and production. However, the competition to provide those communications services is fierce.

To date, MTN has announced offshore contracts with Baker Oil Tools, Fairfield Industries, Global Industries, and Heerema Marine Contractors.

The deal between GlobalSantaFe and MTN had been under negotiation for the past six months, but was not announced until the week after MTN’s acquisition. MTN took a low profile by not announcing any new customer contracts in the weeks leading up to its purchase. The company now is expected to announce a bunch of new deals over the next few months. The deal with GlobalSantaFe brings to 23 the number of oil and gas platforms served by MTN.

Additional pacts with oil and gas companies are expected to be included prominently in the mix of new contracts, industry sources said.

MTN also recently rolled out wireless Wi-Fi communications onboard Norwegian Cruise Lines vessels to complement its satellite communications services. Other market niches for MTN to target include news broadcasters as well as naval ships operated by the U.S. and its allies.

Pacific Ocean Capacity

The company recently signed an agreement to use capacity on New Skies Satellites’ [NYSE: NSK] NSS-5 satellite over the Pacific Ocean. Through NSS-5, MTN will link cruise liners and offshore energy platforms and vessels in the Pacific Ocean with terrestrial communications networks in the United States. The communications links will enable fax, data, Internet and video transmissions for a variety of applications.

NSS-5, which was built by Lockheed Martin Commercial Space Systems and deployed to 338.5 degrees East Longitude in 1997, was moved to 183 degrees East Longitude above the Pacific Ocean in December 2002.

Despite the expanded customer base, services and new ownership of MTN, some industry observers are wary of the mobile satellite telephony business model.

Jimmy Schaeffler, a satellite consultant who heads The Carmel Group, of Carmel-by-the-Sea, Calif., is one of them. “I’m skeptical about the entire mobile telephony sector due to the weak economy and generally slow subscriber growth,” Schaeffler said.

He said that any investor considering investment in that sector should be “extremely cautious.”

“Any due diligence would have to rise to a double or triple the normal due diligence standard, and even then it would be risky,” said Schaeffler.

MTN offers mobile satellite telephony, as well as a range of offshore communications services, including high-speed broadband. Among its capabilities, MTN provides C-Band satellite capacity supporting wide area network services such as frame relay, ATM, and ISDN. The company’s C-Band and Ku-Band systems offer circuits from 64 Kbps to 2.0 Mbps.

MTN also provides Inmarsat A, B, C, M and Mini-M service. The packages include system engineering, total project management, onshore and offshore technical personnel and 24- hour monitor and control center.

–Paul Dykewicz

(David Kagan, MTN, 954/538-4000; John Truschinger, GlobalSantaFe Corporate Services, 281/496.8000)