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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Commission File Number: 0-28316

Trico Marine Services, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (713) 780-9926

Securities registered pursuant to Section 12(b) of the Act:

None.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value per share

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 ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2.)    Yes x    No ¨

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes x    No ¨

The aggregate market value of the voting stock held by non-affiliates of the Registrant at June 30, 2004 based on the closing price on the NASDAQ National Market on that date was $16,634,491.

The number of shares of the Registrant’s common stock, $0.01 par value per share, outstanding at March 15, 2005 was 10,030,000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement, to be filed electronically no later than 120 days after the end of the fiscal year, are incorporated by reference in Part III.

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TRICO MARINE SERVICES, INC.

ANNUAL REPORT ON FORM 10-K FOR

THE YEAR ENDED DECEMBER 31, 2004

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PART I

Items 1 and 2.    Business and Properties

General

Trico Marine Services, Inc. and its subsidiaries is a provider of marine support vessels to the oil and gas industry, primarily in the Gulf of Mexico, the North Sea, Latin America and West Africa. We have a total fleet of 83 vessels, including 48 supply vessels, 12 large capacity platform supply vessels, six large anchor handling, towing and supply vessels, 11 crew boats (including three crew boats we are leasing under ten-year operating leases), and six line-handling vessels. Our diversified fleet of vessels provide a broad range of services, including the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment from one location to another; and support for the construction, installation and maintenance of offshore facilities. Using our larger and more sophisticated vessels, we also provide support for deepwater ROVs (remotely operated vehicles) and well stimulation and maintenance services.

Typically, marine support vessels are priced to the customer on the basis of a daily rate, or “day rate,” regardless of whether a charter contract is for several days or several years. The average day rate of a vessel, or class of vessel, is calculated by dividing its revenues by the total number of days such vessel was under contract during a given period. A vessel’s utilization is the number of days in a period the vessel is under contract as a percentage of the total number of days in such period. Vessel demand is most directly impacted by offshore drilling activity. Vessel day rates and utilization are generally impacted by vessel demand, availability of vessels in the region and various factors such as vessel size, capacity, horsepower, age and whether a vessel has equipment such as sophisticated dynamic positioning and fire-fighting systems.

We are a Delaware holding company formed in 1993. We provide all of our services through our direct and indirect subsidiaries in each of the markets in which we operate. Our domestic subsidiaries include Trico Marine Assets, Inc., which owns all of our vessels operating in the Gulf of Mexico (other than two supply boats) and substantially all of our vessels operating offshore Brazil, and Trico Marine Operators, Inc., which operates all of our vessels in the Gulf of Mexico. In addition to our domestic operations, we operate internationally through a number of foreign subsidiaries.

Our principal executive offices are located at 2401 Fountainview, Suite 920, Houston, Texas 77057. Our website address is www.tricomarine.com where all of our public filings are available, free of charge, through website linkage to the Securities and Exchange Commission. The information contained on our website is not part of this annual report. Unless the context represents otherwise, references to “we,” “us,” “our,” “the Company” or “Trico” are intended to mean the consolidated business of Trico Marine Services, Inc.

Business Strategy

Our primary business strategy focuses on the following:

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Recent Events

Emergence from Chapter 11 Bankruptcy Protection and New Credit Agreement.    On March 15, 2005 (the “Exit Date”), Trico Marine Services, Inc. and two of its U.S. subsidiaries, Trico Marine Assets, Inc. and Trico Marine Operators, Inc., (collectively, the “Debtors”) emerged from bankruptcy proceedings. These proceedings were initiated on December 21, 2004, when the Debtors filed “prepackaged” voluntary petitions for reorganization under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) under case numbers 04-17985 through 04-17987. The reorganization was jointly administered under the caption “In re Trico Marine Services, Inc., et al., Case No. 04-17985.” Included in the consolidated financial statements for the year ended December 31, 2004 are subsidiaries operating inside and outside of the United States which did not commence Chapter 11 cases or other similar proceedings elsewhere, and were not Debtors in any bankruptcy or insolvency proceeding.

Background.    We commenced a Chapter 11 reorganization to effect the reorganization of our capital structure to align it with our present and future operating prospects, and, together with operational changes made during the same period, to provide the Company with greater liquidity and a lower cost structure. Our need for a reorganization resulted in part from prior precipitous declines in day rates and utilization, particularly in the U.S. Gulf of Mexico (the “Gulf”) and North Sea markets, leading to substantial deterioration in operating results in recent years. Although we took steps to enhance our liquidity during this time period, including refinancing long-term debt in 2002, selling vessels in 2003 and 2004 and refinancing our U.S. revolving credit facility in February 2004, our financial and liquidity position continued to deteriorate, primarily due to extremely low demand for our vessels in our key markets.

We initiated reorganization discussions with holders of our Senior Notes and commenced our Chapter 11 cases in accordance with the Bankruptcy Court’s special guidelines for “prepackaged” bankruptcy cases, pursuant to which we solicited and obtained the consent of our creditors to the terms of reorganization as set forth in our joint prepackaged plan of reorganization (the “Plan”) prior to the filing of the Chapter 11 cases. This pre-filing solicitation dramatically shortened the duration, cost and impact of our Chapter 11 process.

In November 2004, we announced that we had commenced the formal process of soliciting approvals for a consensual financial reorganization of the Company from holders of our $250 million 8 7/8% senior notes due 2012 (the “Senior Notes”). The holders of the Senior Notes voted overwhelmingly to accept the Plan, with our Company receiving acceptances from 99.9% of the eligible creditors who voted on the Plan.

The Reorganization Plan.    Pursuant to the Plan, the holders of the Senior Notes received, in exchange for their total claims, 100% of the fully diluted new common stock of the reorganized Trico Marine Services, Inc., before giving effect to (i) the exercise of warrants to be distributed to the holders of old common stock pursuant to the Plan and (ii) options and restricted stock to be issued under a new employee and director long-term incentive stock option plan. As of March 15, 2005, the sole equity interests in the reorganized Company consisted of new common stock issued to the holders of the Senior Notes, shares of restricted stock issued to our non-employee directors, warrants issued to the holders of old common stock, and options and restricted stock issued to employees and directors including the chairman of the board of directors.

On January 19, 2005, the Bankruptcy Court held a confirmation hearing with respect to the Plan, during which the Bankruptcy Court found that the Debtors’ disclosure statement with respect to the Plan was adequate in all respects pursuant to the relevant provisions of the Bankruptcy Code and, on that basis and in accordance with other findings of fact and conclusions of law, confirmed the Plan subject to the closing of the Exit Credit Facility, as further evidenced in the Bankruptcy Court’s order to that effect entered on January 21, 2005.

Emergence.    On February 21, 2005, we entered into a new $75 million credit agreement, comprised of a $55 million term loan and a $20 million revolving credit facility (the “Exit Credit Facility”). The credit agreement provides for certain financial and other covenants including, but not limited to, affirmative and negative covenants with respect to additional indebtedness, new liens, declaration or payment of dividends, sales

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of assets, acquisitions, loans, investments, capital expenditures, maintenance and classification costs, minimum EBITDA, as defined, and maximum leverage ratio. The credit agreement matures on February 21, 2010. For a more detailed discussion of this credit facility, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of this Annual Report on Form 10-K.

Following the Bankruptcy Court hearing approving the Exit Credit Facility and the completion of various post-confirmation financing and corporate governance requirements set forth in the Plan, we emerged from bankruptcy on March 15, 2005.

For a more detailed discussion of our prepackaged plan of reorganization, please read the plan of reorganization, disclosure statement and related documents which are available at www.kccllc.net.

In connection with our emergence from Chapter 11, and pursuant to the bankruptcy court’s order, our certificate of incorporation and bylaws were amended, four of our directors were replaced by four new directors, our 2004 stock incentive plan was adopted, our Exit Credit Facility became effective, our new common stock was issued and our old common stock was cancelled and holders of our old common stock were given a right to receive warrants for shares of our new common stock, among other events, all of which are detailed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2005.

The Industry

Marine support vessels are used primarily to transport equipment, supplies, and personnel to drilling rigs, to support the construction and operation of offshore oil and gas production platforms, to serve as work platforms for offshore construction and platform maintenance and to tow drilling rigs and equipment. The principal types of vessels that we operate can be summarized as follows:

Supply Boats.    Supply boats generally are at least 165 feet in length and are constructed primarily for operations to serve drilling and production facilities and support offshore construction and maintenance work. Supply boats are differentiated from other types of vessels by cargo flexibility and capacity. In addition to transporting deck cargo, such as pipe, other drilling equipment or drummed materials, supply boats transport liquid and dry bulk drilling fluids, potable and drilling water, diesel fuel and dry bulk cement.

Platform Supply Vessels.    Platform supply vessels, or PSVs, were constructed primarily for certain international markets and deepwater operations. PSVs serve drilling and production facilities and support offshore construction and maintenance work. PSVs are differentiated from other offshore support vessels by their larger deck space and cargo handling capabilities. Utilizing space on and below deck, PSVs are used to transport supplies such as fuel, water, drilling fluids, equipment and provisions. Our PSVs range in size from 165 feet to more than 300 feet in length and are particularly suited for supporting large concentrations of offshore production locations because of their large deck space and below deck capacities.

Anchor Handling, Towing and Supply Vessels.    Anchor handling, towing and supply vessels, or AHTSs, are used to set anchors for drilling rigs and tow mobile drilling rigs and equipment from one location to another. In addition to these capabilities, AHTSs can be used in limited supply roles when they are not performing anchor handling and towing services. AHTSs are characterized by large horsepower (generally averaging between 11,000-15,600 horsepower), shorter after decks and special equipment such as towing winches.

Crew Boats.    Crew boats generally are at least 100 feet in length and are used primarily for the transportation of personnel and light cargo, including food and supplies, to and among drilling rigs, production platforms and other offshore installations. Crew boats are constructed from aluminum. As a result, they generally require less maintenance and have a longer useful life without refurbishment than steel-hulled supply boats. The majority of our crew boats range from 110 to 155 feet in length.

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Line Handling Boats.    Line handling boats generally are outfitted with special equipment to assist tankers while they are loading from single buoy mooring systems. These vessels support oil off-loading operations from production facilities to tankers and transport supplies and materials to and among deepwater platforms.

Market Areas

We operate primarily in the Gulf of Mexico, the North Sea, and to a lesser extent, West Africa, Brazil and Mexico. We are currently evaluating the desired vessel composition and level of operations in each of these regions. We are also evaluating certain other market areas for possible future strategic development.

Financial data, including revenues, expenses and assets, of our primary market area/operating segments, are detailed in Note 23 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Our primary market areas are summarized below.

Gulf of Mexico.    Our vessels support exploration and development activities in the Gulf as well as existing oil and gas production platforms. Demand for our supply boats is primarily impacted by the level and type of offshore oil and gas drilling activity. Drilling activity is influenced by a number of factors, including current and projected oil and gas prices, supply and demand for oil and gas and offshore drilling budgets of oil and gas companies. One measure of the level of offshore exploration and development is the number of rigs in the market area, which is commonly referred to as “rig count”. The rig count, along with the supply of offshore supply vessels, is ultimately the driving force behind the vessel day rates and utilization for any given period. As of March 15, 2005, we had 43 supply boats (including 19 cold-stacked supply boats) and four crew boats located in the Gulf, including our Small Water Area Twin Hull (SWATH) crew boat.

North Sea.    The North Sea market area consists of offshore Norway, Great Britain, Denmark, the Netherlands, Germany and Ireland, and the area west of the Shetland Islands. Historically, it has been the most demanding of all offshore areas due to harsh weather, erratic sea conditions, significant water depth and long sailing distances. Exploration and production operators in the North Sea are typically large and well capitalized entities (such as major oil companies, large independents and state owned oil companies), in large part because of the significant financial commitment required in this market area. In comparison to the Gulf, projects in the North Sea region tend to be fewer in number, but larger in scope, with longer planning horizons and more long-term contracts. Activity in the North Sea generally is at its highest level during the months from April to September and at its lowest level during November to February. As of March 15, 2005, we had 10 PSVs and six AHTSs located in the North Sea.

West Africa.    We also have developing operations in West Africa, for which operations are based in Port Harcourt, Nigeria. As of March 15, 2005, we had one PSV, one crew boat and two supply boats operating in West Africa. In 2005, we expect to develop additional business prospects in this market.

Brazil.    The primary customer in the Brazilian market is Petrobras, the Brazilian national oil company. Since 1999, Brazil has permitted foreign oil companies to participate in offshore oil and gas drilling and production. Offshore exploration and production activity in Brazil is concentrated in the deep water Campos Basin, located 60 to 100 miles from the Brazilian coast. A number of fields in the Campos Basin are being produced using floating production facilities. In addition, exploration activity has expanded south to the Santos Basin approximately 100 miles southeast of the city of Rio de Janeiro and to the northeastern and northern continental shelves. As of March 15, 2005, we had six line-handling vessels, and one PSV operating offshore Brazil. Five of our vessels operating offshore Brazil are under charters with Petrobras.

Mexico.    We also have operations in Mexico, for which operations are based in Ciudad del Carmen, Mexico. As of March 15, 2005, we had six crew boats and three supply boats operating offshore Mexico.

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Our Fleet

Existing Fleet.    The following table sets forth information regarding the vessels operated by us as of March 15, 2005:

As of March 15, 2005, the average age of our vessels was 17 years. A vessel’s age is determined based on the date of construction, provided that the vessel has not undergone a substantial refurbishment. However, if a major refurbishment is performed that significantly increases the estimated life of the vessel, we calculate the vessel’s age based on an average of the construction date and the refurbishment date. We believe that our upgrade and refurbishment program, completed in the first half of 1999, has significantly extended the service life of most of our Gulf class supply boats.

Included in Item 7 is an internal allocation of our charter revenues among vessel classes for each of the past three fiscal years.

Vessel Maintenance.    We incur routine dry-dock inspection, maintenance and repair costs under U.S. Coast Guard Regulations and to maintain American Bureau of Shipping, DetNorske Veritas or other certifications for our vessels. In addition to complying with these requirements, we also have our own comprehensive vessel maintenance program that we believe allows us to continue to provide our customers with well maintained, reliable vessels. We incurred approximately $11.4 million, $10.8 million, and $9.5 million in dry-docking and marine inspection costs in the years ended December 31, 2004, 2003 and 2002, respectively.

Dispositions of assets

In December 2004, we entered into a sale-leaseback transaction for our 14,000 square foot primary office in the North Sea to provide additional liquidity. The sale generated approximately $2.8 million of cash proceeds. We entered into a 10-year lease for the use of the facility, with annual rent payments of approximately $0.3 million.

During the second quarter of 2004, as a result of an inability to achieve adequate day rates and long-term contracts for some of the oldest North Sea class vessels, we initiated the process of selling three of our North Sea class PSVs that had an average age of 28 years. One of the vessels was sold on July 8, 2004 for approximately $3.7 million. In connection with these vessels held for sale, we recorded losses of $10.7 million during the year ended December 31, 2004.

During the second quarter of 2003, we committed to a formal plan to sell our investment in the construction of an anchor handling towing supply vessel (“AHTS”) which had a long-term contract with Petroleo Brasileiro S.A. (“Petrobras”) as well as dispose of one of our larger North Sea class vessels. We completed the sale of the assets in September 2003 and received cash proceeds in the amount of $52.5 million. The total loss on the sale of the assets was $6.2 million.

Operations Bases

Our principal executives operate from a leased 3,600 square foot office in Houston, Texas. We support our Gulf operations from an owned 62.5 acre docking, maintenance and office facility in Houma, Louisiana located on the Intracoastal Waterway that provides direct access to the Gulf. Our North Sea operations are supported

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from leased offices in Fosnaväg, Norway and Aberdeen, Scotland. Our Brazilian operations are supported from an owned maintenance and administrative facility in Macae, Brazil and a leased sales and administrative office in Rio de Janeiro. We also have leased sales and operational offices in Port Harcourt, Nigeria and Ciudad del Carmen, Mexico.

Customers and Charter Terms

We have entered into master service agreements with substantially all of the major and independent oil companies operating in the Gulf. Most of our charters in the Gulf are short-term contracts (60 to 90 days) or spot contracts (less than 30 days) and are cancelable upon short notice. Because of frequent renewals, the stated duration of charters frequently has little relationship to the actual time vessels are chartered to a particular customer.

Our principal customers in the North Sea are major integrated oil companies and large independent oil and gas companies as well as foreign government owned or controlled companies that provide logistics, construction and other services to such oil companies and foreign government organizations. The charters with these customers are industry standard time charters. Current charters in the North Sea include periods ranging from spot contracts of just a few days or months to long-term contracts of several years.

As of December 31, 2004, we had ten vessels with fixed-term contracts maturing after December 31, 2005 on a consolidated basis. A summary of the average terms of those contracts is as follows:

Due to changes in market conditions since the commencement of the contracts, average contracted day rates could be more or less favorable than market rates at any one point in time.

Charters are obtained through competitive bidding or, with certain customers, through negotiation. The percentage of revenues attributable to an individual customer varies from time to time, depending on the level of exploration and development activities undertaken by a particular customer, the availability and suitability of our vessels for the customer’s projects, and other factors, many of which are beyond our control.

During 2002, approximately 13% of our total revenues were received from ExxonMobil Corporation or its subsidiaries on a worldwide basis. No individual customer represented more than 10% of consolidated revenues during 2004 or 2003.

Competition

Our business is highly competitive. Competition in the marine support services industry primarily involves factors such as price, service and reputation of vessel operators and crews, and availability and quality of vessels of the type and size required by the customer. We have several global competitors with operations in most or all of our market areas, and various other regional competitors in each market area. Although a few of our competitors are larger and many have greater financial resources and international experience than us, we believe that our operating capabilities and reputation enable us to compete with other fleets in the market areas in which we operate.

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Regulation

Our operations are significantly affected by federal, state and local regulations, as well as certain international conventions, private industry organizations and laws and regulations in jurisdictions where our vessels operate and are registered. These regulations govern worker health and safety and the manning, construction and operation of vessels. For example, we are subject to the jurisdiction of the U.S. Coast Guard, the National Transportation Safety Board, the U.S. Customs Service and the Maritime Administration of the U.S. Department of Transportation, as well as private industry organizations such as the American Bureau of Shipping and Det Norske Veritas. The latter two organizations establish safety criteria and are authorized to investigate vessel accidents and recommend improved safety standards. In addition, we are subject to regulation in other areas in which we operate.

The U.S. Coast Guard regulates and enforces various aspects of marine offshore vessel operations, such as classification, certification, routes, dry-docking intervals, manning requirements, tonnage requirements and restrictions, hull and shafting requirements and vessel documentation. U.S. Coast Guard regulations, as well as class and other flag state regulations, as applicable, require that most of our vessels be dry-docked for inspection at least twice within a five-year period, while some U.S. flagged crew boats require drydocking every two years. We believe we are in compliance in all material respects with all U.S. Coast Guard, flag and port state regulations, as applicable.

Certifications are required under the newly implemented national maritime security regulations of the Marine Transportation Security Act (the “MTSA”) and the international security regulations of the International Ship and Port Facility Security Code (the “ISPS Code”). The regulations require security assessments and plans to be approved by the U.S. Coast Guard or applicable classification society for all vessels. Security equipment must also be installed where required. Security training, security audits and vessel security certifications must be completed to ensure the Company is in compliance with the MTSA and ISPS Code, and to ensure the safety of our crew and vessels.

Under U.S. law, when our vessels are operating between U.S. ports, all licensed personnel must be U.S. citizens and unlicensed seamen must be U.S. citizens or lawfully admitted resident aliens, with the latter not to exceed 25% of the total crew. In addition, under the citizenship provisions of the Merchant Marine Act of 1920 and the Shipping Act of 1916, we can not engage in U.S. coastwise trade if more than 25% of our outstanding stock is owned by non-U.S. citizens. If we should fail to comply with these requirements, during the period of such noncompliance we would not be permitted to continue operating our vessels in coastwise trade.

Our U.S. operations are also subject to a variety of federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Included among these statutes are the Clean Water Act, the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Outer Continental Shelf Lands Act (“OCSLA”) and the Oil Pollution Act of 1990 (“OPA”). Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, and even the issuance of injunctive relief. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent and costly waste handling, disposal or cleanup requirements may have an adverse effect on our operations. While we believe that we are in substantial compliance with current environmental laws and regulations and that continued compliance with existing requirements would not materially affect us, there is no assurance that this trend will continue in the future.

The Clean Water Act imposes strict controls on the discharge of pollutants into the navigable waters of the U.S., and imposes potential liability for the costs of remediating releases of petroleum and other substances. The Clean Water Act provides for civil, criminal and administrative penalties for any unauthorized discharge of oil and other hazardous substances in reportable quantities and imposes substantial potential liability for the costs of removal and remediation. Many states have laws that are analogous to the Clean Water Act and also require

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remediation of accidental releases of pollutants in reportable quantities. Our vessels routinely transport diesel fuel to offshore rigs and platforms, and also carry diesel fuel for their own use. Our supply boats transport bulk chemical materials used in drilling activities, and also transport liquid mud which contains oil and oil by-products. All offshore companies operating in the U.S. are required to have vessel response plans to deal with potential oil spills.

RCRA regulates the generation, transportation, storage, treatment and disposal of onshore hazardous and non-hazardous wastes, and requires states to develop programs to ensure the safe disposal of wastes. We generate non-hazardous wastes and small quantities of hazardous wastes in connection with routine operations. We believe that all of the wastes that we generate are handled in compliance with RCRA and analogous state statutes.

CERCLA contains provisions dealing with remediation of releases of hazardous substances into the environment and imposes strict, joint and several liability for the costs of remediating environmental contamination upon owners and operators of contaminated sites where the release occurred and those companies who transport, dispose of or who arrange for disposal of hazardous substances released at the sites. Under CERCLA, persons may incur liability for hydrocarbons or other wastes that may have been disposed of or released on or under properties that we own or operate or under other locations where such wastes have been taken for disposal. Under these laws, we could be required to remove previously disposed wastes, remediate environmental contamination, restore affected properties, or undertake measures to prevent future contamination. Although we handle hazardous substances in the ordinary course of business, we are not aware of any hazardous substance contamination for which we may be liable.

OCSLA provides the federal government with broad discretion in regulating the leasing and development of submerged outer continental shelf lands for oil and gas production. If the government were to exercise its authority under OCSLA to restrict the availability of offshore oil and gas leases, this could reduce demand for our Gulf class vessels and adversely affect utilization and day rates.

OPA contains provisions specifying responsibility for removal costs and damages resulting from discharges of oil into navigable waters or onto the adjoining shorelines. Among other requirements, OPA requires owners and operators of vessels over 300 gross tons to provide the U.S. Coast Guard with evidence of financial responsibility to cover the costs of cleaning up oil spills from such vessels. We have provided satisfactory evidence of financial responsibility to the U.S. Coast Guard for all of our Gulf class vessels over 300 tons.

Our operations outside the U.S. are potentially subject to similar foreign governmental controls and restrictions pertaining to the environment. We believe that our foreign operations are in substantial compliance with existing environmental requirements of such governmental bodies and that compliance has not had a material adverse effect on our operations.

Insurance

The operation of our vessels is subject to various risks representing threats to the safety of our crews, and to the safety of our vessels and cargo. For our vessels, we maintain insurance coverage against risks such as catastrophic marine disaster, adverse weather conditions, mechanical failure, crew negligence, collision and navigation errors, all of which management considers to be customary in the industry. Also, we maintain insurance coverage against personal injuries to our crew and third parties, as well as insurance coverage against pollution and terrorist acts. We believe that our insurance coverage is adequate and we have not experienced a loss in excess of our policy limits. However, there can be no assurance that we will be able to maintain adequate insurance at rates that we consider commercially reasonable, nor can there be any assurance that such coverage will be adequate to cover all claims that may arise. In recent years, our insurance costs have increased with higher deductibles and retention amounts.

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Employees

As of January 31, 2005, we had 963 employees worldwide, including 847 operating personnel and 116 corporate, administrative and management personnel. We believe our relationship with our employees is satisfactory. To date, strikes, work stoppages, boycotts, or slowdowns have not interrupted our operations.

Our U.S. employees have not chosen to be represented by a labor union and are not covered by a collective bargaining agreement. We, together with other providers of marine support vessels, have in the past been targeted by maritime labor unions in an effort to unionize our Gulf employees.

Our Norwegian seamen are covered by three union contracts with three separate Norwegian unions. Our United Kingdom seamen are covered by two union contracts with two separate unions. We believe our relationships with our employees in Norway and the United Kingdom are satisfactory.

Our seamen in Brazil and Nigeria are covered by separate collective bargaining agreements. We believe our relationships with our employees in these areas are satisfactory.

Cautionary Statements

Certain statements made in this Annual Report that are not historical facts are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may include statements that relate to:

You can generally identify forward-looking statements by such terminology as “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “estimate” or similar expressions. We caution you that such statements are only predictions and not guarantees of future performance or events. We disclaim any intent or obligation to update the forward-looking statements contained in this Annual Report, whether as a result of receiving new information, the occurrence of future events or otherwise, other than as required by law. We caution investors not to place undue reliance on forward-looking statements.

All phases of our operations are subject to a number of uncertainties, risks and other influences, many of which are beyond our ability to control or predict. Any one of such influences, or a combination, could materially affect the results of our operations and the accuracy of forward-looking statements made by us. Some important risk factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in our forward-looking statements include the following:

Risks Relating to our Reorganization and Financial Condition

We are highly dependent on external sources of financing and improved cash flow to meet our obligations and reduce our indebtedness in the future. If we are unable to increase our cash flow, we may not be able to meet our obligations under our credit facilities and we may not be able to secure additional financing or have sufficient capital to support our operations.

Although our bondholders have converted the Senior Notes into new common stock in connection with our plan of reorganization, we will continue to have a significant amount of indebtedness. As of December 31, 2004, we had total indebtedness of approximately $147.1 million, excluding liabilities subject to compromise.

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Our senior notes and corporate credit ratings were continuously downgraded by both Standard & Poor’s Ratings Services, or S&P, and Moody’s Investors Service, or Moody’s during 2003 and 2004, culminating in the removal of the ratings by both agencies during 2004 and early 2005. It is likely that we will have difficulty obtaining financing and our cost of obtaining additional financing or refinancing existing debt may be increased significantly.

With the completion of the Exit Credit Facility (described in more detail in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” of this Form 10-K), we believe that cash provided by operations and current unrestricted cash and available credit under our Exit Credit Facility and Trico Supply Bank Facility will be sufficient to fund our debt service requirements, working capital and vessel maintenance expenditures until at least December 31, 2005, barring any unforeseen circumstances. However, if activity levels in the Gulf of Mexico and the North Sea revert to those experienced in the recent past, it would require us to depend more heavily on our credit facilities.

Our high level of debt could have important consequences to you, including the following:

In the longer term, our ability to pay debt service and other contractual obligations will depend on improving our future performance and cash flow generation, which in turn will be affected by prevailing economic and industry conditions and financial, business and other factors, many of which are beyond our control. If we have difficulty providing for debt service or other contractual obligations in the future, we will be forced to take actions such as reducing or delaying capital expenditures, reducing costs, selling assets, refinancing or reorganizing our debt or other obligations and seeking additional equity capital, or any combination of the above. We may not be able to take any of these actions on satisfactory terms, or at all.

Our financial and other covenants under our credit facility may limit operating flexibility and our ability to obtain additional financing.

We entered into a new credit facility on February 21, 2005. Our new credit facility provides for certain financial and other covenants including affirmative and negative covenants with respect to additional indebtedness, new liens, declaration or payment of dividends, sales of assets, acquisitions, loans, investments, capital expenditures, maintenance and classification costs, minimum EBITDA, as defined, and maximum leverage ratio. Payment on the debt outstanding under our new credit facility may be accelerated following

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certain events of default including, but not limited to, failure to make payments when due, noncompliance with covenants, breaches of representations and warranties, commencement of insolvency proceedings, entry of judgment in excess of $5 million and occurrence of a material adverse event.

Day rates in the Gulf of Mexico and our other geographic markets have fluctuated significantly in the last several years. If day rates or utilization levels for our U.S. fleet were to decline from current levels, we may have difficulty satisfying the covenants in the Exit Credit Facility relating to our earnings before interest, taxes, depreciation and amortization, as defined, for our U.S. operations (the “U.S. EBITDA Covenant”). In particular, if operating results in the U.S. deteriorate (because, for example, day rates decline, utilization declines, expenses increase, or some combination of any or all of the above), we may have difficulty meeting the U.S. EBITDA Covenant in 2005. If our U.S. operations have difficulty complying with these covenants based on their operating results, then we will likely need to repatriate cash from our Norwegian subsidiaries in order to comply with the U.S. EBITDA Covenant. See “We may not be able to repatriate funds from Norway to fund our U.S. operations, which will negatively impact our cash flows and limit our operational flexibility” below. If we were not able to repatriate a sufficient amount of cash from our Norwegian subsidiaries, we could default on our Exit Credit Facility, which could lead to our bankruptcy and/or insolvency.

We may not be able to repatriate funds from Norway to fund our U.S. operations, which will negatively impact our cash flows and limit our operational flexibility.

Our Norwegian subsidiaries currently generate substantially all of our profits and our cash flow from operations, and from time to time we generate substantial liquidity in these subsidiaries. Our ability to repatriate funds depends on a number of factors, including:

Assuming that we are otherwise able to repatriate funds from Norway to the U.S., in order to do so in a tax-efficient manner we would also be required to:

As of March 15, 2005, no reduction of paid-in-capital has occurred which would permit us to repatriate funds in a tax-efficient manner.

We may not be able to satisfy one or more of these conditions, and as a result we may not be able to repatriate funds from our Norwegian subsidiaries on a tax-efficient manner, or at all. This inability could materially and adversely affect our cash and liquidity position and, in certain circumstance, could result, alone or in combination with other circumstances, in a default under our Exit Credit Facility.

We may face material tax consequences or assessments in countries in which we operate. If a tax assessment is levied against us, then our net income and cash available to service our credit facilities or repay them when due could be substantially reduced.

We have received tax assessments in Brazil during the past two years, and may receive additional assessments in the future. Our Brazilian subsidiary received tax assessments from Brazilian State tax authorities totaling approximately 23.7 million Real ($8.9 million at December 31, 2004) in the aggregate. The tax assessments are based on the premise that certain services provided in Brazilian federal waters are considered

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taxable by certain Brazilian states as transportation services and are subject to a state tax. If the courts in these jurisdictions uphold the assessments, it would have a material adverse affect on our net income, liquidity and operating results. We do not believe any liability in connection with these matters is probable and, accordingly have not accrued for either assessment or any potential interest charges for the potential liabilities.

Our Norwegian subsidiary is a member of the Norwegian shipping tax regime, which enables the indefinite deferral of the payment of income taxes as long as certain criteria are met. If we fail to meet these criteria, we may be deemed to have exited the shipping tax regime and, as a result, a portion of the deferred tax liability may become due and payable. The Company entered into discussions during March 2005 with the Norwegian shipping tax regime authorities regarding certain transactions between the Company and our Norwegian subsidiary during parts of 2002, 2003 and 2004. Based on our discussions to date, we do not believe any material amounts of tax will be considered due in the next twelve months. However, if any of these transactions are determined to be a breach of the shipping tax regime and, as a result, the Company is deemed to have exited the shipping tax regime, a portion of the deferred tax liability may become immediately due and payable. This could have a material adverse affect on our cash and liquidity position and could result in a default under our Exit Credit Facility.

Our business segments have been capitalized and are financed on a stand-alone basis, which may hinder efficient utilization of available financial resources.

In general, we operate through two primary operating segments, the U.S. Gulf of Mexico and the North Sea. These business segments have been capitalized and are financed on a stand-alone basis. Debt covenants and the Norwegian shipping tax regime preclude us from effectively transferring the financial resources from one segment for the benefit of the other. Over the past three years, our U.S. Gulf of Mexico operating segment has incurred significant losses while operating under a significant debt burden, and has not been able to utilize the financial resources of our North Sea operating segment, which carries a lower level of debt. In an effort to maintain adequate funds for operations in the U.S., we have initiated the process of implementing a method to repatriate funds from Norway; however, there are substantial obstacles that we must overcome to achieve a funds transfer in a tax-efficient manner, including certain restrictions under our Exit Credit Facility, and there can be no assurance as to the success of such efforts.

Financial statements for periods subsequent to our emergence from bankruptcy will not be comparable to those of prior periods, which will make it difficult for stockholders to assess our performance in relation to prior periods.

Upon emergence from bankruptcy, the amounts reported in financial statements for subsequent periods will materially change due to the reorganization of our assets and liabilities as a result of the Plan’s effectiveness, as well as the application of the provisions of Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”), with respect to reporting upon emergence from Chapter 11, which is commonly referred to as “fresh-start” accounting. As part of our upcoming “fresh-start” accounting adjustments, for example, our long-lived assets will be reduced based on the fair market values assigned to our reorganized liabilities and current assets, and based upon a total equity value of $110.0 million. Changes in accounting principles required under generally accepted accounting principles within twelve months of emerging from bankruptcy are required to be adopted as of the date of emergence. Additionally, we may choose to make other changes in accounting practices and policies effective as of the date of emergence. For all these reasons, our financial statements for periods subsequent to emergence from Chapter 11 will not be comparable to those of prior periods.

The costs associated with our reorganization will negatively impact our cash flows from operations during the first and second quarters of 2005.

We have incurred significant costs associated with our reorganization in 2004 and early 2005. We have agreed to pay fees to our financial advisors, and the advisors of our creditors, of approximately $3.5 million in

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the aggregate (in cash or in our common stock, issued at the reorganization value of $11.00 per share, or a combination of the two) upon successful consummation of a reorganization and we anticipate spending an additional $3.5 million in reorganization legal fees during 2005. These costs will have a significant negative effect on our cash flows from operations during 2005.

Currency fluctuations could adversely affect our financial condition and results of operations.

Due to the size of our international operations, a significant percentage of our business is conducted in currencies other than the U.S. Dollar. We primarily are exposed to fluctuations in the foreign currency exchange rates of the Norwegian Kroner, or NOK, the British Pound and the Brazilian Real. Changes in the value of these currencies relative to the U.S. Dollar could result in translation adjustments reflected as comprehensive income or losses on our balance sheet. In addition, translation gains and losses could contribute to fluctuations in our results of operations. Due to the fluctuation of these currencies, primarily the NOK, we incurred a favorable accumulated foreign currency translation adjustment of $17.7 million, $10.6 million and $71.5 million in 2004, 2003 and 2002, respectively. We incurred foreign exchange losses of $0.3 million, $0.9 million, and $1.4 million for 2004, 2003 and 2002, respectively. Future fluctuations in these and other foreign currencies may result in additional foreign exchange gains or losses, and could have a material adverse impact on our financial position.

Our ability to issue primary shares in the equity capital markets for the benefit of the Company in the short-term could be limited by the terms of our registration rights agreement with certain of our existing common stockholders. Additionally, these stockholders may sell a large number of shares of new common stock in the public market, which may depress the market price of our stock.

Pursuant to our plan of reorganization, we agreed, subject to certain limitations and conditions, to register up to 10,000,000 shares of new common stock held by certain former holders of our Senior Notes. Under the terms of the registration rights agreement, we may be prohibited from effecting certain transactions in our new common stock, including any public offering of common stock, while these affiliates are effecting an underwritten offering of their common stock. As a result, our ability to access the equity capital markets at times when we believe the market is favorable could be limited, and we may have to access other sources of liquidity, such as our credit facility, even if those sources are less attractive to us than selling primary shares of our common stock in the market.

Once we file a registration statement, as required by the terms of our registration rights agreement, these stockholders will have the ability to sell a substantial number of secondary shares of common stock in the market during a short time period. Sales of a substantial number of shares of new common stock in the trading markets, whether in a single transaction or series of transactions, or the possibility that these sales may occur, could reduce the market price of our outstanding new common stock.

The level of trading activity in our new common stock may be reduced because the market for and liquidity of our shares may be volatile and is limited.

On March 15, 2005, we exited Chapter 11 bankruptcy and issued new common stock which we expect may be quoted on the OTC bulletin board. Holders of shares of our new common stock may find that the liquidity of our new common stock is impaired as compared with the liquidity of securities listed on the NASDAQ National Market or one of the national or regional exchanges in the United States. This impairment of liquidity may result in significant fluctuations in the bid and ask prices for our new common stock. As a result, an investor may find it difficult to dispose of, or obtain accurate quotations as to the value of, our new common stock. While we anticipate seeking to be relisted on the NASDAQ National Market or another exchange at some time in the future, it is impossible at this time to predict when, if ever, such application will be made or whether such application will be successful.

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Risks Relating to our Operations

Our fleet includes many older vessels that require increased levels of maintenance and capital expenditures to maintain them in good operating condition and the fleet may be subject to a higher likelihood of mechanical failure, inability to economically return to service or requirement to be scrapped.

As of December 31, 2004, the average age of our vessels was 17 years. A vessel’s age is determined based on the date of construction, provided that the vessel has not undergone a substantial refurbishment. If a major refurbishment is performed that significantly increases the estimated life of the vessel, we calculate the vessel’s age based on an average of the construction date and the refurbishment date. As the age of our fleet increases, additional maintenance and capital expenditures will be required to keep our vessels in good operating condition. In addition, we currently have 19 cold-stacked vessels which may require additional maintenance and capital expenditures to return to service. A number of markets in which the Company operates, as well as other markets in which the Company desires to operate, have age limitations which could adversely affect the ability of the Company to successfully market its older vessels.

Increases in the supply of new generation offshore supply vessels could decrease day rates.

Certain of our competitors have announced plans to construct new U.S.-flagged offshore supply vessels and foreign-flagged offshore supply vessels. A remobilization to the U.S. Gulf of Mexico of U.S.-flagged offshore supply vessels operating in other regions or a repeal or significant modification of the Jones Act or the administrative erosion of its benefits, permitting offshore supply vessels that are either foreign-flagged, foreign-built, foreign-owned or foreign-operated to engage in the U.S. coastwise trade, would also result in an increase in capacity. Any increase in the supply of offshore supply vessels, whether through new construction, refurbishment or conversion of vessels from other uses, remobilization or changes in law or its application, could increase competition for charters and lower day rates, which would adversely affect our revenues and profitability.

Operating internationally poses uncertain hazards that increase our operating expenses.

Our international operations are subject to a number of risks inherent to any business operating in foreign countries. These risks include, among others:

We cannot predict the nature and the likelihood of any such events. However, if any of these or other similar events should occur, it could have a material adverse effect on our financial condition and results of operations.

Our operations are subject to operating hazards and unforeseen interruptions for which we may not be adequately insured.