Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q4 2006 Earnings Presentation
30 slides from Helix Energy Solutions's earnings presentation, Feb 27, 2007
Slide 1: Fourth Quarter 2006 Earnings Conference Call
Fourth Quarter 2006 Earnings Conference Call February 27, 2007
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of historical fact, are statements that could be deemed "forward-looking statements
Slide 3: Presentation Outline
Presentation Outline H E L I X E N E R G Y S O L U T I O N S Summary of Results Operational Highlights by Segment A. Contracting Services B. Oil & Gas Status of Capital Projects (Services) Questions & Answers
Slide 4: 2006 Results - IPO Impact
2006 Results - IPO Impact Reported Net Income $344.0 Fourth Quarter Gain on Sale, net of tax <96.5> Incremental Overhead during 2006 ($8MM pre-tax) 5.3 Net Income, ex. IPO impact $252.8 Diluted EPS $2.85 ($MM, except per share data) H E L I X E N E R G Y S O L U T I O N S
Slide 5: Summary of Results
Summary of Results H E L I X E N E R G Y S O L U T I O N S ($MM, except per share data) Fourth Quarter Fourth Quarter Third Quarter 2006 2005 2006 Revenues $395.8 $264.0 $374.4 Gross Profit 151.0 95.9 130.5 Margins 38% 36% 35% Net Income 162.5 56.0 57.0 Margins 41% 21% 15% Diluted EPS 1.73 0.69 0.60
Slide 6: Revenue and Gross Profit by Segment
4Q 2005 4Q 2006 Contracting Services 195 272.8 Oil & Gas Production 69 123 Revenue and Gross Profit by Segment 4Q 2005 4Q 2006 Contracting Services 61 97.3 Oil & Gas Production 35 55 Contracting Services Oil & Gas 26% 31% 36% 36% 74% 69% 64% 64% Revenue Gross Profit
Slide 7: Return on Capital Invested
2001 2002 2003 2004 2005 2006 12.3 4.9 7.4 13.4 16.5 15 Return on Capital Invested (See GAAP reconciliation at Company's website - www.HelixESG.com) 12 5 7 13 17 15 H E L I X E N E R G Y S O L U T I O N S
Slide 8: Net Debt to Book Capitalization
MARAD Other Long Term Debt Term B Facility (Amounts in Millions) 12/31/06 12/31/05 12/31/04 Net Debt To Book Capitalization 22% 40% 38% Convertible Notes H E L I X E N E R G Y S O L U T I O N S Cal Dive Revolver
Slide 9: Continuation of Growth Story in 2006
Revenues Operating Income Equity Earnings Net Income EBITDA EBITDAX 2005 799 222 13 150 354 361 2006 1367 407 18 253 623 665 Continuation of Growth Story in 2006 71% 83% 35% 69% 76% 84% (1) (1) (1) (1) 2006 results exclude the impact of the Gain on Sale in the Cal Dive IPO and estimated incremental
Slide 10: 2006 Highlights
2006 Highlights Integration of Helix RDS Announcement of New Build Well Intervention Vessel for North Sea Planning of Drilling Upgrade for Q4000 Planning for H4500 Acquisition of Remington Oil & Gas Acquisition of Phoenix (a.k.a. Typhoon) Field Investment in 4 New ROVs Purchase of Caesar and Plannin
Slide 11: Contracting Services Summary
Contracting Services Summary H E L I X E N E R G Y S O L U T I O N S ($MM) Fourth Quarter Fourth Quarter Third Quarter 2006 2005 2006 Revenues 285.8 203.2 251.2 Gross Profit 98.3 60.8 91.9 GPM 34% 30% 37% Note: Amounts are before intercompany eliminations Fourth Quarter Review Overall revenues incre
Slide 12: Deepwater Construction
Deepwater Construction H E L I X E N E R G Y S O L U T I O N S Fourth Quarter Fourth Quarter Third Quarter ($MM) 2006 2005 2006 Revenues 98.0 61.5 72.6 Gross Profit 28.8 18.3 24.5 GPM 29% 30% 34% Utilization: Pipelay 95% 96% 66% Robotics 67% 75% 82% Fourth Quarter Review The Express returned to work
Slide 13: Deepwater Construction First Quarter and 2007 Outlook
Deepwater Construction H E L I X E N E R G Y S O L U T I O N S First Quarter and 2007 Outlook: Both the Intrepid and the Express have strong backlogs and pricing continues to escalate in accordance with our expectations. The Express is due to leave for the year long, project in East Indian waters, d
Slide 14: Shelf Construction
Shelf Construction H E L I X E N E R G Y S O L U T I O N S Fourth Quarter Fourth Quarter Third Quarter ($MM) 2006 2005 2006 Revenues 137.0 97.1 128.4 Gross Profit 53.6 33.6 57.7 GPM 39% 35% 45% Utilization 77% 85% 83% Fourth Quarter Review These results will be discussed on a separate Cal Dive Confe
Slide 15: Well Operations
Well Operations Fourth Quarter Fourth Quarter Third Quarter ($MM) 2006 2005 2006 Revenue 41.4 39.1 40.8 Gross Profit 14.5 9.4 8.3 GPM 35% 24% 20% Utilization 85% 98% 86% Fourth Quarter Review The Seawell achieved full utilization on a winter intervention campaign for Shell on old contract rates, whi
Slide 16: 2007 Drydock Schedule
2007 Drydock Schedule Q1 Q2 Q3 Q4 Eclipse (A) X Cal Diver II (A) X Seawell X Kestrel (A) X Intrepid X American Triumph (A) X Brave (A) X Q4000 X Mr. Jack (A) X Sterling Pony (A) X American Star (A) X Cal Dive vessel
Slide 17: Production Facilities
Production Facilities Fourth Quarter Fourth Quarter Third Quarter 2006 2005 2006 Equity in Earnings ($MM) 5.3 3.1 5.1 Production Throughput (MBOE) 3,653 1,109 3,148 Fourth Quarter Review Production through Marco Polo improved sequentially but continued below expectations due to well start-up delays
Slide 18: Reservoir and Well Tech Services
Reservoir and Well Tech Services H E L I X E N E R G Y S O L U T I O N S ($MM) Fourth Quarter Third Quarter 2006 2006 Revenues 9.4 9.5 Gross Profit 3.1 3.0 GPM 33% 32% Fourth Quarter Review Revenue and gross profit were essentially flat with Q3 levels. For this first full year since the acquisition
Slide 19: Oil & Gas - Financial Highlights
Oil & Gas - Financial Highlights H E L I X E N E R G Y S O L U T I O N S Fourth Quarter Fourth Quarter Third Quarter 2006 2005 2006 Revenue ($MM) 123.2 69.4 145.0 Gross Profit ($MM) 53.7 35.1 44.6 GPM 44% 51% 31% Production (BCFe) Shelf 12.9 4.6 13.3 Gunnison 2.2 2.1 2.3 Average Commodity Prices (ne
Slide 20: Oil & Gas - Statistics
Oil & Gas - Statistics LOE Fourth Quarter Fourth Quarter Third Quarter 2006 2005 2006 Operating Expenses $23.5 $10.6 $26.8 Repair & Maintenance .1 8.0 6.9 Total LOE $23.6 $18.6 $33.7 Per McFe $1.59 $2.80 $2.16 DD&A $45.5 $15.6 $48.8 Per McFe $3.06 $2.34 $3.13 Proved Reserves (BcFe) Dec 31, 2006 Dec
Slide 21: Oil & Gas - Commentary
Oil & Gas - Commentary H E L I X E N E R G Y S O L U T I O N S Fourth Quarter Review: Shelf Production was 0.5 BCFe lower sequentially, and was around 0.9 BCFe lower than the bottom of our expectation range due to continued pipeline shut-ins and the late start up of production from the deepwater Tig
Slide 22: Exploration Drilling Results Update
Exploration Drilling Results Update Location Working Interest Net Risked Reserves Potential (BCFE) Comments S. Marsh Island - - 80A3 60% 8 Discovery S. Timbalier 145 #1 75% 8 Discovery E. Cameron 339 #1 100% 12 - 24 2 Wells Discovery Drilling #2 Well Main Pass 232 #1 50% 4 Discovery Main Pass 211 #1
Slide 23: PUD Drilling/Completion Activity
PUD Drilling/Completion Activity Well Name Working Interest % Operator Current Activity Main Pass185 #1 50 Cimarex Waiting on Pipeline Main Pass 200 #1 50 Cimarex Completing/ Waiting on pipeline Main Pass 241 #1 50 Cimarex Waiting on Pipeline West Cameron 170 C-2 42 NEXEN Producing Atwater Valley 42
Slide 24: Development Projects - Near Term
Development Projects - Near Term Project Name Working Interest Current Activity Estimated Initial Rate 1st Production % (Net MMCFE/D 6:1) Est. Start Date Eugene Island 391 60 Flowline Installed 5 2/15/07 Eugene Island 302 60 Flowline Installed 5 2/15/07 West Cameron 342 100 Waiting on Platform/Pipel
Slide 25: Helix Hedges - As Of February 26, 2007
Helix Hedges - As Of February 26, 2007 H E L I X E N E R G Y S O L U T I O N S
Slide 26: Organic Growth Capital Projects: Helix Producer I
Organic Growth Capital Projects DP Floating Production Unit - Helix Producer I To be installed on Phoenix field in GOM (formerly known as Typhoon) Initial conversion scheduled to be complete end of 2007 Installation and hook-up of processing facilities on target for completion mid 2008 Total estimat
Slide 27: Phoenix Field Development
Phoenix Field Development H E L I X E N E R G Y S O L U T I O N S Oil Export Gas Export Boris / Little Burn Flowline Typhoon #1 Typhoon #3 Typhoon #4 Boris Umbilical Typhoon Umbilical Typhoon Umbilical Flexible Flowline Risers
Slide 28: Organic Growth Capital Projects: Pipelay Vessel - Caesar
Organic Growth Capital Projects Pipelay Vessel - Caesar Vessel expected to arrive at COSCO yard in Shanghai early March Conversion on schedule to be completed end of 2007 Total estimated cost - $138 million
Slide 29: Organic Growth Capital Projects: Well Enhancer
Organic Growth Capital Projects Well Intervention Vessel - Well Enhancer Contract with Merwede shipyard has been signed Long lead items have been ordered Expected delivery end of 2008 Total estimated cost - $160 million Specifications DP3 Well Intervention Vessel Length of 131 meter Electric and sli
Slide 30: Organic Growth Capital Projects: H4500 and FPSO Shiraz
Organic Growth Capital Projects Deepwater Drilling Semi - H4500 Long lead items have been purchased Detailed design for RFP and model testing completed Firm prices from shipyards being solicited FPSO Shiraz Formed 50/50 JV with AGR Group, a Norwegian-based oil technology and services group JV acquir
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