Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Corporate Update (March 2023)
42 slides from Helix Energy Solutions's corporate update, Mar 17, 2023
Slide 1: March 2023 Helix Energy Solutions Company Update
March 2023 Helix Energy Solutions Company Update
Slide 2: Forward-Looking Statements
2 2 INTRODUCTION Forward-Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than stateme
Slide 3: Our purpose is to enable energy transition
At Helix, our purpose is to enable energy transition through: Maximizing Existing Reserves Enhancing remaining production from existing oil and gas wells Lowering Decommissioning Costs Restoring the seabed in an environmentally safe manner Offshore Renewables & Wind Farms Transitioning our energy ec
Slide 4: Helix business model focused on late life cycle
4 4 • The Helix business model has been to focus on the late life cycle of oil and gas and support of renewables growth. This is not a pivot; continues to be our business model • Helix created the drill rig alternative technology and is the only provider of non-rig riser-based well intervention, wit
Slide 5: Company Overview
5 Four reportable business segments: Well Intervention, Robotics, Shallow Water Abandonment and Production Facilities Liquidity1 of $285 million, net debt2 of $75 million and contract backlog of $847 million as of December 31, 2022 Subsea Services Alliance with SLB provides integrated equipment and
Slide 6: Global Operations
6 Global Operations 1Headcount as of March 2, 2023 2,289 Helix employees1 worldwide primarily operating in the Gulf of Mexico (including Helix Alliance), Brazil, North Sea, Asia Pacific and West Africa regions 7 5 41 12 8 5 Well Intervention Vessels Seven dedicated well intervention vessels ROV Supp
Slide 7: Corporate Sustainability
7 7 ENERGY TRANSITION Corporate Sustainability “Safety, Sustainability and Value Creation – our core goals – support our vision as a preeminent offshore energy transition Company.” Owen Kratz, President and Chief Executive Officer, Helix Energy Solutions Group, Inc. Sustainability continues to drive
Slide 8: Environmental, Social and Governance
8 8 Environmental, Social and Governance Environmental • Our business supports the responsible transition from a carbon-based economy through a three-pronged strategy of maximizing remaining oil and gas reserves, abandonment and decommissioning end of life wells and applying the techniques and techn
Slide 9: Market Updates
9 Market Updates
Slide 10: Macro Outlook Supports Upside Potential
10 10 Oil & Gas • Helix business lines are primarily production focused and activity driven by Upstream OpEx budgets • Current high commodity pricing environment favorable for offshore spending on both enhancement and decommissioning activities Renewable Energy • Robotics segment continues to expand
Slide 11: Key Performance Indicators in the Energy Service Market
11 11 KEY PERFORMANCE INDICATORS In The Energy Service Market Rystad Energy | Oilfield Service Contract March 10, 2023
Slide 12: North America: Market Outlook 2023-2027
12 12 North America: Market Outlook 2023-2027 Source: Rystad Energy ServiceCube, SubseaCube, WellCube as of February 2023 DECOMMISSIONING MARKET
Slide 13: Global: Market Outlook 2023-2027
13 13 Global: Market Outlook 2023-2027 Source: Rystad Energy ServiceCube as of February 2023 DECOMMISSIONING MARKET
Slide 14: Offshore Wind Renewables Market
14 14 OFFSHORE WIND RENEWABLES MARKET Cumulative Offshore Wind Cable Installations by Continent, 2020 - 2030 Rystad Energy | Offshore WindCube March 16, 2023
Slide 15: Markets Snapshot: Regional (GOM, Brazil)
15 GOM • Regulatory driven, strong P&A • Commodity price driven, production enhancement • Current rig market is tight • Strong market expected to strengthen further • Competition: Rigs Limited riserless • Helix expects 2 riser-based vessels committed to GOM Brazil • Strengthening market for both
Slide 16: Markets Snapshot: North Sea UK and Norway
16 North Sea UK • 2021 Market focused on P&A with 2023/2024 timing • 2021 Weak market for production enhancement • 2023 P&A work deferred; energy security focused • Strong market expected for 2023 for production enhancement • Competition Moored rigs – approximately 5 available Riserless – 1 seas
Slide 17: Markets Snapshot: West Africa and APAC
17 West Africa – Nigeria, Equatorial Guinea, Ghana, Angola • Each market is independently managed within producers • Primarily production enhancement and remediation work • Vessels not allowed to remain in region without a contract • Relatively little work for 2023; significant volume of work likely
Slide 18: Beyond 2023
18 18 HELIX ENERGY SOLUTIONS Beyond 2023 • We plan to continue momentum on the three legs of our Energy Transition business model: production maximization, decommissioning and renewables • Expected continued strong operating and free cash flows • Maintenance capex anticipated to be approximately $50
Slide 19: Business Segments
19 Business Segments
Slide 20: Well Intervention
20 • Global leader in rig-less intervention Lower costs and reduced carbon footprint • Fleet of seven purpose-built well intervention vessels • Both riser-based and riserless intervention systems • Approximately 2,000 subsea well intervention operations performed worldwide Approximately 50/50 pr
Slide 21: Helix Well Intervention Vessels & Assets
21 21 HELIX WELL INTERVENTION Vessels & Assets Q4000 (Gulf of Mexico) Dynamically positioned class 3 (“DP3”) purpose-built semisubmersible vessel for well intervention, decommissioning and other subsea projects Q5000 (Gulf of Mexico) DP3 purpose-built semisubmersible vessel for well intervention, de
Slide 22: Helix Well Intervention Vessel Utilization
22 22 HELIX WELL INTERVENTION Vessel Utilization 59% 93% 92% 83% 88% 58% 74% 89% 86% 80% 88% 97% 63% 40% 31% 9% 38% 63% 71% 38% 42% 44% 79% 99% 99% 99% 99% 98% 100% 100% 72% 52% 87% 88% 99% 92% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3
Slide 23: Subsea Services Alliance with SLB
23 23 Subsea Services Alliance created in 2015 to combine the expertise and capabilities of Helix and SLB • Comprehensive subsea well construction, intervention and decommissioning portfolio • Helix provides marine support, operational expertise and project management capabilities • SLB provides int
Slide 24: Robotics
24 24 Renewable Energy Specialty Services • Leading provider for water jetting and mechanical cutting trenching solutions and ROV support for offshore oil and gas and wind farm development • A fleet of advanced work-class ROVs and trenchers, including several units custom built to our specifications
Slide 25: Helix Robotics Vessels & Assets
25 25 Grand Canyon II (Asia Pacific) A versatile and technically advanced DP3 multi-role construction support vessel Under charter agreement through December 2027 Grand Canyon III (North Sea) A versatile and technically advanced DP3 multi-role construction support vessel Under charter agreement thro
Slide 26: Helix Robotics Asset Utilization
26 26 HELIX ROBOTICS Asset Utilization , 405 499 450 336 165 236 358 419 323 370 376 332 42 119 154 92 72 84 90 90 66 81 176 160 34% 34% 37% 32% 24% 36% 43% 38% 35% 53% 66% 58% - 50 100 150 200 250 300 350 400 450 500 0% 10% 20% 30% 40% 50% 60% 70% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1
Slide 27: Shallow Water Abandonment
27 • The leading provider of full-field decommissioning in the GOM Shelf • Full planning, engineering and project management • Sole GOM in-house provider of all required capabilities for integrated full-field decommissioning • Well P&A • Facility decommissioning • Sub-sea architecture removal • Stru
Slide 28: Shallow Water Abandonment Services
28 28 SHALLOW WATER ABANDONMENT Well Services: Well P&A and Coiled Tubing Marine Services: Crew boats & OSV’s Heavy Lift: Installations, IMR & Decommissioning Commercial Diving: Subsea IMR & Abandonments Marine Services: Liftboats
Slide 29: Helix Alliance Vessels & Assets
29 29 HELIX ALLIANCE Vessels & Assets Liftboats Ten liftboats ranging in size up to 265 feet P&A Spreads 15 Marketable P&A Spreads, with ability to scale up to 20 P&A Spreads Dive Support Vessels Three dive support vessels Offshore Supply Vessels (OSVs) Six OSV’s ranging from 150 feet to 170 feet an
Slide 30: Shallow Water Abandonment Utilization
30 30 SHALLOW WATER ABANDONMENT Utilization 1 Vessels utilization includes ten liftboats, six OSVs, one crew boat, three diving support vessels, and one heavy lift derrick barge 2 Systems utilization includes six coiled tubing systems and 14 and 15 marketable P&A systems during Q3 2022 and Q4 2022,
Slide 31: Helix Production Facilities
31 Helix Production Facilities includes the Helix Producer 1 floating production unit (FPU), which is operating under a production handling contract until at least June 1, 2024 The segment also includes the Helix Fast Response System and our ownership of the Gulf of Mexico wells and related infrastr
Slide 32: Key Financial Metrics & Outlook
32 Key Financial Metrics & Outlook
Slide 33: Debt & Liquidity Profile
33 33 FINANCIAL Debt & Liquidity Profile ($ In Millions) 1 Cash includes cash and cash equivalents but excludes restricted cash at December 31, 2019, 2021 and 2022 of $54 million, $74 million and $3 million, respectively 2 Long-term debt through December 31, 2020 was net of unamortized discounts and
Slide 34: Debt Instrument Profile
34 34 FINANCIAL Debt Instrument Profile Total funded debt1 of $271 million at 12/31/22 • $30 million Convertible Senior Notes due 2023 – 4.125% • $200 million Convertible Senior Notes due 2026 – 6.75% • $41 million MARAD Debt – 4.93% • Semi-annual amortization payments through maturity in Q1 2027 $0
Slide 35: Five Year Trend
35 35 FINANCIAL Five Year Trend1 ($ In Millions) Revenue Free Cash Flow2 1 Helix Alliance revenue has been included for periods beginning July 1, 2022 (date of acquisition) 2 Adjusted EBITDA and Free Cash Flow are Non-GAAP financial measures; see non-GAAP reconciliations below 3 Revenue, Adjusted EB
Slide 36: Revenue Dispersion
36 36 FINANCIAL Revenue Dispersion ($ In Millions) By Geography By Segment 1 1 1 Revenue percentages net of intercompany eliminations 2 Helix Alliance revenue has been included in Shallow Water Abandonment segment beginning July 1, 2022 (date of acquisition) 37% 39% 42% 34% 51% 28% 29% 28% 23% 10% 2
Slide 37: 2023 Outlook: Forecast
37 37 FINANCIAL 2023 Outlook: Forecast ($ in millions) 2023 2022 Outlook Actual1 Revenues $ 1,020 - 1,200 873 $ Adjusted EBITDA2 210 - 250 121 Free Cash Flow2 110 - 150 18 Capital Additions3 50 - 70 69 Revenue Split: Well Intervention $ 640 - 690 524 $ Robotics 190 - 230 192 Shallow Water Abandonmen
Slide 38: 2023 Outlook: Capital Additions & Balance Sheet
38 38 FINANCIAL 2023 Outlook: Capital Additions & Balance Sheet 1 Excludes unamortized issuance costs 2023 Capital additions are forecasted at approximately $50 - $70 million: • Primarily maintenance capex related to regulatory recertification costs of our vessels and systems, which are reported in
Slide 39: Non-GAAP Reconciliations
39 Non-GAAP Reconciliations
Slide 40: Non-GAAP Reconciliations
40 40 FINANCIAL Non-GAAP Reconciliations ($ in thousands, unaudited) 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Reconciliation from Net Income (Loss) to Adjusted EBITDA: Net income (loss) 28,598 $ 57,697 $ 20,084 $ (61,684) $ (87,784) $ Adjustments: Income tax provision (benefit) 2,400 7
Slide 41: Non-GAAP And Other Definitions
41 41 FINANCIAL Non-GAAP And Other Definitions Non-GAAP Financial Measures We define EBITDA as earnings before income taxes, net interest expense, gains or losses on extinguishment of long-term debt, gains and losses on equity investments, net other income or expense, and depreciation and amortizati
Slide 42: Energy Solutions
ENERGY SOLUTIONS
Helix Energy Solutions Group — Corporate Update (March 2023) on 6ix