Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q4 2007 Earnings Presentation
24 slides from Helix Energy Solutions's earnings presentation, Feb 29, 2008
Slide 1: Fourth Quarter Earnings Conference Call & 2008 Outlook
Fourth Quarter Earnings Conference Call & 2008 Outlook February 29, 2008
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 Subsea Intervention Lubricator stack-up on Seawell Executive Summary Summary of Results 2008 Outlook Strategy Operational Highlights by Segment Contracting Services Oil & Gas Questions & Answers
Slide 4: Executive Summary
Executive Summary Fourth Quarter Fourth Quarter Full Year Full Year Results 2007 2006 2007 2006 Revenue $500.2 $395.8 $1,767.4 $1,366.9 Adj. EBITDAX(A) 233.1 182.4 823.6 674.0 Net Income 120.4 162.5 316.8 344.0 EPS $1.25 $1.73 $3.34 $3.87 Highlights 2007 Highlights Adjusted EBITDAX Totaled $823 MM C
Slide 5: 2007 Reserve Report
Oil & Gas - 2007 Reserve Report Amounts in BCFe 12/31/06 Reserves 2007 Production Exploration Additions Sales Revisions 12/31/07 Reserves Shelf * 406 (52) 38 (15) (4) 373 Deepwater 130 (13) 206 (14) (5) 304 Total 536 (65) 244 (29) (9) 677 * Includes Onshore and U.K. reserves. Other 12/31/07 Reserve
Slide 6: Summary of Results - Reconciliation
Summary of Results - Reconciliation ($ in millions, except per share data) Fourth Quarter Fourth Quarter Fourth Quarter 2007 2006 Reported Net Income $120.4 $162.5 Unusual Items (net of tax): IPO gain _ (96.5) Gain from Cal Dive acquisition of Horizon (98.6) _ Oil & Gas impairments and other 61.4 _
Slide 7: Summary of Unusual Items
Summary of Unusual Items Description Amount Comments Oil & Gas Impairments $59.4 Devil's Island, Non-Commercial PUDs, PDP Impairments Prospect Impairments 9.0 Non-Commercial Prospects on Expiring Leases Accelerated DD&A (Impaired Properties) 12.5 Tiger & EC 235 Impaired Properties Dry hole Costs 10.
Slide 8: Earnings Outlook and Normalization
Earnings Outlook and Normalization 2008 Estimate 2007 Actual EPS before Interest Expense, Profit Deferral & Sales $3.33 $3.34 Interest expense (0.72) (0.41) Intercompany profit deferral (0.40) (0.15) EPS before sales and unusual items $2.21 $2.78 Impact from Oil & Gas Sales: 30% Phoenix sale gain _
Slide 9: 2008 Outlook
2008 Outlook Revenue 2008E 2007 % Contracting Service $1,700 $1,335 27% Oil & Gas 600 582 3% Elimination (200) (150) Total Revenue $2,100 $1,767 19% EBITDAX (A) Contracting Service $400 380 5% Oil & Gas 590 467 26% Elimination (50) (23) _ Total EBITDAX $940 $824 14% Nomalized EPS $3.36 $3.05 10% Hig
Slide 10: 2008 Estimate Assumptions
2008 Estimate Assumptions Contracting Services Revenues: $1.7 billion Margins: 26% Assets Placed in Service: Q4000 April 2008 Caesar Q3 2008 Helix Producer I Q4 2008 Internal Profit Deferral: $60 million (assuming no property sell downs) Oil & Gas Commodity Prices: $7.50 (NG)/$75 (0il) Production: 6
Slide 11: Strategy
STRATEGY
Slide 12: Strategy
Last Three Years Significantly shifted contracting focus from Shelf to Deep Acquired Remington for deepwater prospect generation potential Added value through investment in new deepwater service and reservoir assets Next Three Years - Continue to Evolve Capture value created in deepwater prospects v
Slide 13: Operational Highlights by Segment
OPERATIONAL HIGHLIGHTS BY SEGMENT
Slide 14: Contracting Services - World Class Fleet and Capabilities
Contracting Services - World Class fleet and Capabilities Robotics (Canyon Offshore) 39 ROVs 5 trenchers 2000 HP i- trencher (2008; under construction) 2 ROV drill units Portable pipelay system (2008; under construction) Long term charters DP2 Northern Canyon DP2 Olympic Canyon DP2 Olympic Triton DP
Slide 15: Contracting Services
Contracting Services Fourth Quarter Fourth Quarter Fourth Quarter Third Quarter Third Quarter Third Quarter Revenues (A) 2007 2006 2007 Deepwater Construction $175.8 $98.0 $126.9 Shelf Construction (Cal Dive) 162.2 137.0 176.9 Well Operations 39.9 41.4 57.7 Reservoir/Well Tech 8.4 9.4 7.7 Contractin
Slide 16: Contracting Services Continued: Utilization
Fourth Quarter Fourth Quarter Third Quarter Utilization 2007 2006 2007 Deepwater: - Deepwater Contracting 100% 95% 97% - Robotics 68% 67% 86% Shelf Construction (Cal Dive) 52% 77% 74% Well Operations 44% 85% 83% Independence Hub & Marco Polo Production Total throughput: Marco Polo (MBOE) 3,554 3,653
Slide 17: Contracting Services Commentary
Contracting Services Commentary (1) Deepwater Contracting The Intrepid and the Express had full utilization and contributed $21.4 MM of gross profit. Margins were lower due to the large amount of work performed by a chartered third party vessel on a major GOM job. The Express arrived in India in Nov
Slide 18: Shelf Construction and Well Operations
Shelf Construction (Cal Dive) Cal Dive closed its acquisition of Horizon Offshore in December 2007. Utilization and margins down due to normal seasonality. See separate earnings release and conference call for this majority owned subsidiary. Well Operations The Seawell enjoyed high utilization with
Slide 19: Reservoir / Well Technology Services and Production Facilities
Reservoir / Well Technology Services Helix RDS had another difficult quarter due to seasonal vacation related impact and the net loss of revenue generating personnel. We have appointed a new Managing Director in December 2007 and expect a turnaround in 2008. Production Facilities Q4/07 Review Record
Slide 20: Images of the Quarter
Images of the Quarter Conversion of Caesar underway in China ERT drilled second Noonan production well Express working on Reliance KGD6 project Offshore India Canyon Offshore took delivery of second Olympic Shipping vessel Helix Producer I in Croatia System Integration Test of WOSEA VDS with Woodsid
Slide 21: Oil & Gas Financial Highlights
Oil & Gas Financial Highlights 4Q 2007 Gross Profit reflects the oil & gas amount without the $91.0 million of impairment / dry hole related items. Fourth Quarter Fourth Quarter Third Quarter 2007 2006 2007 Revenue (in millions) $169.7 $123.2 $141.8 Gross Profit (in millions) $64.8 (A) $53.7 $43.6 G
Slide 22: Oil & Gas Statistics
Oil & Gas - Statistics (A) Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Third Quarter Third Quarter 2007 2007 2007 2007 2006 2006 2007 2007 Total Total Per Mcfe Total Per Mcfe Total Per Mcfe Operating Expenses Operating Expenses $23.3 $1.33 $1.33 $20.5 $1
Slide 23: Summary of 2007 - 2009 Hedging Positions
Summary of 2007 - 2009 Hedging Positions a
Slide 24: Thank You
Oe HELIX ENERGY SOLUTIONS Thank You
Helix Energy Solutions Group — Q4 2007 Earnings Presentation on 6ix