Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q2 2006 Earnings Presentation
22 slides from Helix Energy Solutions's earnings presentation, Aug 2, 2006
Slide 1: Second Quarter 2006 Earnings Conference Call
Second Quarter 2006 Earnings Conference Call August 2, 2006 Owen Kratz - Chief Executive Officer Martin Ferron - President Wade Pursell - Chief Financial Officer
Slide 2: 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 statements of historical fact, are statements that
Slide 3: Presentation Outline
Presentation Outline I. Summary of Results II. Operational Highlights by Segment A. Contracting Services B. Oil & Gas Production III. Strategic Overview IV. Questions & Answers H E L I X E N E R G Y S O L U T I O N S
Slide 4: Summary of Results
Summary of Results (all amounts in thousands, except per share amounts and percentages) Second Quarter Second Quarter First Quarter 2006 2005 2006 Revenues $305,013 $166,531 $291,648 Gross Profit 131,692 52,419 102,266 43% 31% 35% Net Income 69,139 26,027 55,389 23% 16% 19% Diluted Earning Per Share
Slide 5: Revenues and Gross Profit by Segment
2Q 2005 2Q 2006 Contracting Services 98.9 223.9 Oil & Gas Production 67.6 81.1 Revenues and Gross Profit by Segment 2Q 2005 2Q 2006 Contracting Services 16.3 90.2 Oil & Gas Production 36.1 41.5 Revenues in Millions Gross Profit in Millions H E L I X E N E R G Y S O L U T I O N S Contracting Services
Slide 6: Earnings Growth
2Q 2005 2Q 2006 2005 Actual 2006 Estimate 26 69.1 0 150.1 226 51 Earnings Growth (Net Income in Millions) H E L I X E N E R G Y S O L U T I O N S 26.0 69.1 150.1 334 289 Guidance Range
Slide 7: Return on Capital Invested
2001 2002 2003 2004 2005 2006 12.3 4.9 7.4 13.4 16.5 23 Return on Capital Invested 2nd QTR YTD (See GAAP reconciliation at Company's website - www.HelixESG.com) 12 5 7 13 17 23 H E L I X E N E R G Y S O L U T I O N S (Percentage)
Slide 8: Long Term Debt and Debt to Book Capitalization
MARAD Construction and Other Long Term Debt Term B Facility (Amounts in Millions) 7/01/06 6/30/06 12/31/05 12/31/04 Debt To Book Capitalization 22% 40% 35% 48% Convertible Notes H E L I X E N E R G Y S O L U T I O N S Pro Forma
Slide 9: Contracting Services (CS)
Contracting Services (CS) Second Quarter Second Quarter First Quarter 2006 2005 2006 Revenues $237,354 $103,391 $220,821 Gross Profit 91,190 17,577* 79,644 38% 17% 36% (Amounts reflected are in thousands, except percentages, and are before intercompany eliminations and pre-tax charges for asset valu
Slide 10: Contracting Services (CS) cont.
Contracting Services (CS) cont. Gross profit margins improved by 21 points year over year and by two points sequentially. The sequential improvement was due to better pricing in all segments. Q3/06 and Outlook: We expect further improvement in 2H/06 financial performance driven mainly by pricing. Th
Slide 11: CS - Reservoir and Well Technology
CS - Reservoir and Well Technology Second Quarter First Quarter 2006 2006 Revenues $10,263 $9,605 Gross Profit 3,320 2,509 32% 26% H E L I X E N E R G Y S O L U T I O N S Q2/06: Both revenue and gross profit were in line with our expectations for this second quarter since the acquisition of Helix RD
Slide 12: CS - Shelf Construction
CS - Shelf Construction Second Quarter Second Quarter First Quarter 2006 2005 2006 Revenues $124,765 $40,699 $119,790 Gross Profit 60,944 9,584* 50,205 49% 24% 42% Utilization 87% 54% 90% (Amounts in thousands, except percentages and are before intercompany; eliminations and before pre-tax charges f
Slide 13: CS - Shelf Construction Continued
CS - Shelf Construction Continued Q2/06: Utilization remained at near the record level of Q1, helped by continued incremental demand caused by the 2005 hurricanes. Gross profit margins increased seven points sequentially to just under 50%. Q3/06 and Outlook: We expect this level of utilization to be
Slide 14: CS - Deepwater Construction
CS - Deepwater Construction Second Quarter Second Quarter First Quarter 2006 2005 2006 Pipelay 85% 91% 100% Robotics 67% 68% 70% Utilization Q2/06: Pipelay asset utilization declined by 15% sequentially due to 15 days of unscheduled downtime for the Intrepid and the commencement of the Express upgra
Slide 15: CS - Deepwater Construction Outlook
CS - Deepwater Construction Both deepwater pipelay assets are booked through the end of the year (apart from the upgrade program for the Express which is scheduled for a further 55 days in Q3). The outlook is also bright for 2007 based on brisk bidding activity. H E L I X E N E R G Y S O L U T I O N
Slide 16: CS - Well Operations
CS - Well Operations Q2/06: Utilization increased by 12% sequentially although the Q4000 had another period of unscheduled downtime in Q2. Q3/06 and Outlook: Both vessels are fully booked until next year, with the Seawell in particular looking set to see at least a 10 point gross profit increase com
Slide 17: CS - Production Facilities
CS - Production Facilities Second Quarter Second Quarter First Quarter 2006 2005 2006 Equity in Earnings $4,629 $2,708 $3,365 Production throughput (MBOe) 2,951 718 1,273 Q2/06: Continued well problems, related to the K2 field development, curtailed production flowing to the Marco Polo platform. The
Slide 18: Oil & Gas Production
Oil & Gas Production Second Quarter Second Quarter First Quarter 2006 2005 2006 Revenues $81,110 $67,590 $80,312 Gross Profit (before asset impairments) 41,499 38,389 43,369 51% 57% 54% Asset Impairments - <2,757> <20,746> Production (BCFe): Shelf 6.0 6.7 5.4 Gunnison 2.5 2.2 2.7 Average Commodity P
Slide 19: Oil & Gas Production
Oil & Gas Production Q2/06: Shelf: Production of 6.0 Bcfe was 11% greater than achieved in the first quarter due to a continued ramp up following the shut-ins caused by the 2005 hurricanes. Realized commodity prices were down 7% overall sequentially but 20% higher than those achieved in last year's
Slide 20: Deepwater Production - Project Update
Deepwater Production - Project Update Field / Prospect ERT Interest Q2 Activity Outlook Estimated Production Date GB 689 - - Dawson Deep 10% Tie-back construction work completed to Gunnison Spar Production commenced early in Q3 Q3/06 GC 195 - - Tiger 40% Drilling and completion activities completed.
Slide 21: Deepwater Production - Project Update Continued
Deepwater Production - Project Update Continued Field / Prospect ERT Interest Q1 Activity Outlook Estimated Production Date GB 346 Huey 20% Drilling commenced Drilling to be completed in Q3 1H/07 AT 426 Bass Lite 17.5% None Development drilling planned for Q4/06 1H/08 H E L I X E N E R G Y S O L U T
Slide 22: Helix Hedges: As Of July 31, 2006
Helix Hedges: As Of July 31, 2006 H E L I X E N E R G Y S O L U T I O N S
Helix Energy Solutions Group — Q2 2006 Earnings Presentation on 6ix