Ship to ship combat in REIGN basically works like this. Every turn of combat each ship involved has 4 main options: Manoeuvre, Attack, Dodge, Pursuit. The ship does one of these things while the the other characters on board can do other things. Note that naval combat rounds tend to be longer than hand to hand combat rounds (the distances are a lot bigger). 

Okay, here we go. Naval combat. These rules are based on the Aircraft Combat rules for Godlike (Detwiller and Stolze).

1) Manoeuvre: Knowledge+Sailing vs the ship's difficulty
This is the meat and potatoes of ship combat. Before you can board or attack another ship you need to get yours into position. Some ships are easy to control. Others are beasts. This is represented by the ship's difficulty. Nimble ships have a lower difficulty, lumbering warships/river barges have higher. For normal activities, if the Captain's Knowledge+Sailing is equal to or greater than the Difficulty of the ship you don't have to roll unless the circumstances are extraordinary. If there are other difficulties being imposed for some reason they get added to the ship's difficulty. Combat, of course always requires rolls.

To successfully manoeuvre into position for an attack against another ship you roll the Captain's Knowledge+Sailing vs. the Ship's difficulty. The captain declares which manoeuvre she's making in the Declare phase. There are three basic manoeuvres corresponding to three abstract distances involved: Boarding, Shooting or Evading. The Captain with the lowest Sense declares first. If tied, the GMC ship declares first.

If the captain succeeds (beating the difficulty of the ship she's sailing) the ship is in position to do what she wants *after* the Sailing roll is resolved. Usually the opposing captain will be rolling to manoeuvre his ship as well. These two manoeuvres interact for different effects. What each ship can do is determined by the success and the ranges listed below. These positions are maintained (without a roll) until one side successfully executes a different manoeuvre, or a Dodge or a Pursuit action.

Boarding vs Boarding - The ships are close enough to launch hand to hand fighting. Both ships can send PCs/followers to fight hand to hand
Boarding vs Shooting - The ships are within grappling hook/swinging from yardarms range. Both ships can attack in their chosen ways (boarders attack crew and shots attack the ship but boarding attacks knock dice out of shooting and vice versa)
Boarding vs Evading/Pursuit/Dodge - The target ship has put some distance between the two. The Boarding ship cannot board.
Boarding vs failed roll - The Boarding ship can send followers on attack next turn, defenders can only use their sets to dodge/parry attacks

Shooting vs Shooting - The ships are within optimal weapons range. Both ships can shoot each other.
Shooting vs Boarding - The ships are within grappling hook/swinging from yardarms range. Both ships can attack in their chosen ways (boarders attack crew and shots attack the ship but boarding attacks knock dice out of shooting and vice versa)
Shooting vs Evading/Pursuit/failed roll - The target ship is out of position to fight back. The Shooting ship can fire at the target ship.

Evading vs Evading - Pursuit is broken off/begun (If they're going in different directions pursuit is over. If they're going the same direction it's just begun)
Evading vs Shooting - The Evading ship gets +1d on pursuit rolls or dodge rolls next turn
Evading vs Boarding - The Evading ship gets +1d on pursuit rolls
Evading vs failed roll - The Evading ship gets its first Pursuit success

2) Attack:
2a) Shooting Weapon Pool
Naval shooting isn't the same kind of hand eye coordination that most weapons are, thus the skill of the user isn't as important, what counts is the Attack pool. Determine the number and type of weapons the ship has and consult the table below.

Weapon - Rating per weapon
Archers - 1d per 5 archers
Ballista - 1d
Catapult - 2d (Ignores 1 point of Armour)
Flaming/Magical Catapults - 3d+Area 2 (Ignores 2 points of armour)

Catapults and Ballistas can only fire from one side of the ship so you have to manoeuvre into position before you can attack. Then you count up the number of each weapon you have in position to fire. Maybe your standard Ob-Lob ship has three catapults per side. After a successful manoeuvre into position it could roll 6d to attack.

Every point of width in the attack pool inflicts 2 points of Superficial damage and 2 points of structural damage to the target ship. Area attacks do 3 superficial and 3 structural damage per die thrown.

If a PC makes an Expert: Warmachines or Student: Artillery (or something similar) roll before the fighting begins you can add +1 to the attack pool for as long as the PC is helping. (If the PC has an ED or MD in the skill that can be added instead.)

Archers do their normal damage (not the each point of width does 2 damage), but the armour values of the ship are doubled vs such weapons. Archers can move from one side of the ship to the other, or even fire from the stern or bow, so they don't need to be manoeuvred into position. They're best for firing at enemy crew.

2b) Boarding Loyal Followers vs Unworthy Opponents
If they're in range to board use the Unworthy Opponents rules for the fierce fighting on deck. And if PCs are involved, well, there you go, start fighting. This stuff goes a bit faster than normal ship combat, so if you'd like maneuvers and other actions could only happen every 5 rounds or so.

2c) Ramming
I haven't figured out good ramming rules yet.

3) Dodge: Captain's Knowledge+Sailing (vs Ship's difficulty) to gobble attack dice.
This can be used against boarding and shooting attacks. A success means the opponent must also manoeuvre into position before attacking on following rounds. (Of course if they've already gotten their bloodthirsty pirates on board your ship, that might not be so incredibly useful.) Next round you can manoeuvre or flee.

4) Pursuit: Captain's Sailing skill + Ship's Speed vs opposing Captain and ship's Attack/Maneuver/Pursuit.
Pursuit successes become Gobble dice. If the fleer manages to foil all the opposing sets, he's gotten away - if the fleeing ship is faster than the pursuer. You need 2+the difference in speed (so 2+2 if the fleeing speed is 2 and the pursuer's speed is 4) successes to escape (with a minimum of 1 Success if the fleeing ship is faster). (Note that the Captain's stat is not added to this pool, only the skill.)

Ship stats:
Every ship has three things: Speed, Difficulty and Structure.

Speed:
0 rowboat or anything else human powered
1 fishing boat
2 riverboat/small yacht
3 heavily armed warship
4 normal largish trader vessel
5 unladen top-of-the line pirate ship
6 ship built for speed
7 fastest Opetkan pursuit ship
10 the fastest damned ship in the world (yet to exist)
Ob-Lob ships get +1 speed for their type

Difficulty:
0 small nimble ship
2 medium attack ship (frigates et al)
3 large lightly armed
4 large ship
5 large heavily-laden ship
6 Heavily armed Helusan warship
Ob-Lob ships get -1 difficulty for their type

Structure:
Instead of hit points ships have Structure points. They're basically exactly the same. You can do Superficial (Shock) damage and Structural (Killing) damage to a ship. As with bodies, if you fill up a location with Structural damage, the excess goes into the hull.

Big boats tend to be armoured. Or at least thick. A fast boat probably has less armour than indicated below. As mentioned in the Attack section, these AR values are doubled against normal scale weapons. But not against magical attacks.

Guidelines for number of Structure Points
small boats 36SP AR 0
large river boats 48SP AR 1
medium ocean going boats 60SP AR 2
large ocean boats 66+SP AR 3

Hit Location Table
10 - bridge
7-9 - hull
5-6 - starboard deck weapons
3-4 - port deck weapons
1-2 - masts

My gut says (depending on the ship of course) put about 1/2 of the SP in the hull, 1/4 in the masts and then more in the decks than the bridge. So for The Helusian Spirit a medium sized ocean vessel, we'd be looking at Hull 30 Masts 14 (seven per mast, which would be split into separate hit locations) Port Weapons 6 Starboard Weapons 6 and Bridge 4

Damage effects on ship locations differ if a location is filled with superficial damage or filled with structural damage.

Masts
Superficial: 1/2 speed, x2 difficulty
Structural: Speed 0, Difficulty 10

Starboard/Port Deck Weapons
Superficial: Lose all bonuses, -1d crew actions, 1/2 weapons value
Structural: Begin sinking

Hull
Superficial: Begin sinking
Filled: sunk

Bridge
Damaged: weapons hit command crew in highest Waste Die location (this happens whenever a hit gets through the Bridge's armour, not just when it fills with superficial damage)
Structural: x2 difficulty, begin sinking

Sinking: every (naval) turn add one structural damage to the hull location. If you are sinking as a result of multiple hit locations being pulped that is cumulative.

Other things people can do in naval combat:

Damage control:Knowledge+Student: Shipbuilding
Success repairs 1 point superficial damage/reduces 1 point of sinking damage to superficial in whatever location they're working on. You generally need a bunch of guys helping with this.

Inspire the crew:Command+Inspire
Success gives crew a +1 Threat rating OR a +1 bonus on their next action.

Spotting targets:Sense+Sight
Normally in naval combat, called shots are for targeting the sails or the weapons. Sometimes you have more specific targets. To hit these, you need a spotter to find them. This can be used for shooting at flying mages or other much smaller than ship sized targets.

If the spotter declares what she's looking for and succeeds, in the next turn the ship can make a called shot on that location. This is more along the lines of "Shoot at the brazier they're lighting those flaming arrows with" than "Shoot the masts" which anyone can do. Success does normal damage to the location and has extra fun effects as determined by the GM.

Spotting trouble: Sense+Sight
Spotters can also give benefits to Sailing rolls for treacherous waters. Success gives the captain a +1 bonus for such navigation.

Example:

Out on the Icy Sea The Helusian Spirit runs into an Ob-Lob ship they know as the Mitos. The Mitos are looking for revenge from the last time the Spirit raided their harbour.

The Mitos ship has the following stats: Speed 5, Difficulty 3, 66SP AR2. She has three catapults to starboard and three to port. Her captain is Bakinu, who has a Sailing pool of 6+ED (3+ED is skill, the other 3 is his Knowledge)

The Spirit has these stats: Speed 4, Difficulty 3, 60 SP AR2. She's got 4 Ballistae per side. Her captain isn't as skilled as the Ob-Lob with a Sailing pool of 4 (2 skill 2 Knowledge).

So battle is joined.

Round 1
Mitos: Manoeuvre Shooting
Spirit: Manoeuvre Shooting
The Spirit rolls 4d and gets 2x3 (just making the difficulty) and the Mitos get nothing on 6d+ED. So now the Spirit can shoot at the Mitos without the danger of being fired upon. The Spirit's captain declares they're shooting with their starboard weapons.

Round 2
Mitos: Manoeuvre Shooting
Spirit: Attack Shooting
The Mitos get 2x5 on their manoeuvre while the Spirit missed with its shots. The Spirit is now out of position, and will need to manoeuvre next turn.

Round 3
Mitos: Attack Shooting
Spirit: Manoeuvre Shooting
The Spirit gets a 2x7 on the manoeuvre and The Mitos get a 2x9 and a 2x7 (though the Mitos didn't declare Multiple attacks). The 2x9 hits the Spirit for 4 Superficial and 4 Structural damage in the hull, but that's reduced to 3 and 3 by the effective AR of 1 (remember catapults ignore 1AR). It also knocks 1 out of the Spirit's Manoeuvre set, so they're still out of position.

Round 4
Mitos: Attack Shooting
Spirit: Manoeuvre Shooting
The Mitos get a 2x5 and the Spirit gets a 2x3. The deck weapons of the Spirit are open and unarmoured so that does 4 Superficial and 4 Structural damage to the Starboard Ballistae, filling the location (6SP) with Structural damage. This isn't looking too good for the Spirit. Her manoeuvre set got wrecked, she's lost 1/2 her weapon rating and is starting to sink. It's time for her to try fleeing.

Round 5
Mitos: Attack Shooting
Spirit: Pursuit (flee)
The Spirit gets to roll 6d for the fleeing attempt (Sailing skill + Ship Speed) and gets 2x8 and 2x4. The Mitos hits with the attack of 3x9, doing 5 Structural and 5 Superficial damage to the hull (after AR). It knocks one out of the 2x4 set, but the Spirit does get a success, so the Mitos will have to manoeuvre back into position next turn. That's also success number one of three needed for the Spirit to escape. The Spirit takes 1 Structural damage from sinking.

Round 6
Mitos: Manoeuvre Shooting
Spirit: Pursuit (flee)
The Spirit gets a 2x3 and breathes a sigh of relief when the Mitos rainbow their manoeuvre roll. One more success and the Spirit will break away! She takes another Structural damage from sinking.

Round 7
Mitos: Manoeuvre Shooting
Spirit: Pursuit (flee)
The Mitos get a 2x10 with their ED, but the Spirit gets a 2x10 and a 2x3. The Spirit gobbles the Mitos success and the crew bares ass at the Ob-Lobs while they catch the right breeze to get them the hell away from there. They are still sinking, but some damage control teams can start bailing out the hold.