Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q1 2006 Earnings Presentation
23 slides from Helix Energy Solutions's earnings presentation, May 3, 2006
Slide 1: First Quarter 2006 Earnings Conference Call
First Quarter 2006 Earnings Conference Call May 3, 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: Additional Information
Helix and Remington have filed a proxy statement/prospectus and other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission ("SEC"). Investors are urged to read the proxy statement/prospectus and any other relevant documents filed with the SEC beca
Slide 4: 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 5: Summary of Results
Summary of Results (all amounts in thousands, except per share amounts and percentages) First Quarter First Quarter Fourth Quarter 2006 2005 2005 Revenues $291,648 $159,575 $264,028 Gross Profit 102,266 51,873 95,852 35% 33% 36% Net Income 55,389 25,411 56,006 19% 16% 21% Diluted Earning Per Share 0
Slide 6: Revenues and Gross Profit by Segment
1Q 2005 1Q 2006 Contracting Services 99.4 210 Oil & Gas Production 63.4 80 Revenues and Gross Profit by Segment 1Q 2005 1Q 2006 Contracting Services 16.8 79 Oil & Gas Production 35.1 23 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 Oil & G
Slide 7: Earnings Growth
1Q 2005 1Q 2006 2005 Actual 2006 Estimate 25.4 53.4 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 25.4 53.4 150.1 277 226 Guidance Range
Slide 8: Return on Capital Invested
2001 2002 2003 2004 2005 2006 12.3 4.9 7.4 13.4 16.5 21 Return on Capital Invested 1st QTR (See GAAP reconciliation at Company's website - www.HelixESG.com) 12 5 7 13 17 21 H E L I X E N E R G Y S O L U T I O N S (Percentage)
Slide 9: Debt to Book Capitalization
MARAD Construction and Other Long Term Debt Revolving Credit (Amounts in Millions) 03/31/06 12/31/05 12/31/04 12/31/03 Debt To Book Capitalization 35% 22% 40% 37% Convertible Notes H E L I X E N E R G Y S O L U T I O N S
Slide 10: Contracting Services (CS)
Contracting Services (CS) First Quarter First Quarter Fourth Quarter 2006 2005 2005 Revenues $220,821 $100,487 $203,249 Gross Profit 79,644 20,961 60,796 36% 21% 30% (Amounts reflected are in thousands, except percentages, and are before intercompany eliminations) Q1/06: Overall revenues more than d
Slide 11: Contracting Services (CS) cont.
Contracting Services (CS) cont. Gross profit margins improved by 15 points year over year and by six points sequentially. Most of the sequential improvement was due to the better pricing environment, with margins already reaching the top end of the forecast range for 2006. Q2/06 and Outlook: We expe
Slide 12: CS - Reservoir and Well Technology
CS - Reservoir and Well Technology First Quarter 2006 Revenues $9,605 Gross Profit 2,509 26% H E L I X E N E R G Y S O L U T I O N S Q1/06: Both revenue and gross profit were in line with our expectations for the first full quarter of business since the acquisition of Helix RDS. Q2/06 and Outlook: A
Slide 13: CS - Shelf Construction
CS - Shelf Construction First Quarter First Quarter Fourth Quarter 2006 2005 2005 Revenues $119,790 $36,204 $97,062 Gross Profit 50,205 11,140 33,614 42% 31% 35% Utilization 90% 50% 85% Q1/06: Utilization reached another record level due to incremental demand caused by the 2005 hurricanes. Q2/06 and
Slide 14: CS - Deepwater Construction
CS - Deepwater Construction First Quarter First Quarter Fourth Quarter 2006 2005 2005 Pipelay 100% 64% 96% Robotics 70% 66% 75% Utilization Q1/06: Pipelay asset utilization again reached 100% on the back of an exceptionally strong market for subsea tie-backs. The Express has enjoyed 98% utilization
Slide 15: CS - Deepwater Construction Outlook
CS - Deepwater Construction Q2/06 and Outlook: Both deepwater pipelay assets are booked through the end of the year (apart from the upgrade program for the Express which is scheduled for 45 days in Q3). The outlook is also bright for 2007 based on brisk bidding activity. The robotics group (Canyon)
Slide 16: CS - Well Operations
CS - Well Operations Q1/06: Utilization declined by 27% sequentially as both the Q4000 and Seawell had periods of unscheduled downtime. Q2/06 and Outlook: Both vessels are fully booked until the end of the year, with the Seawell in particular looking set to see at least a 10 point gross profit incre
Slide 17: CS - Production Facilities
CS - Production Facilities First Quarter First Quarter Fourth Quarter 2006 2005 2005 Equity in Earnings $3,365 $1,729 $3,122 Production throughput (MBOe) 1,273 1,259 1,109 Q1/06: As in Q4/05 production tariff income was negatively impacted by the mechanical shut-in of the first K2 well. Output from
Slide 18: Oil & Gas Production
Oil & Gas Production First Quarter First Quarter Fourth Quarter 2006 2005 2005 Revenues $80,312 $63,386 $69,375 Gross Profit 22,623* 30,912 35,055 28% 49% 51% Production (BCFe): Shelf 5.4 6.7 4.6 Gunnison 2.7 2.3 2.1 Average Commodity Prices (net of hedging impact): Oil/Bbl $58.71 $44.02 $54.31 Gas/
Slide 19: Oil & Gas Production commentary
Oil & Gas Production Q1/06: Shelf: Production of 5.4 Bcfe was 17% greater than fourth quarter due to shut-ins from Hurricanes Katrina and Rita. Realized commodity prices were down 6% overall from last quarter but 39% higher than those achieved in last year's first quarter. Natural gas made up 59% of
Slide 20: Deepwater Production - Project Update
Deepwater Production - Project Update Field / Prospect ERT Interest Q1 Activity Outlook Estimated Production Date GB 689 - - Dawson Deep 10% Well completed Tie back to Gunnison spar to be performed in Q2 Q3/06 GC 195 - - Tiger 40% None Drill rig on location; development well to be completed and tied
Slide 21: Deepwater Production - Project Update Continued
Deepwater Production - Project Update Continued Field / Prospect ERT Interest Q1 Activity Outlook Estimated Production Date GB 114 Tulane 50% Exploratory well abandoned due to mechanical difficulties New well plan being evaluated 2H/07 GB 346 Huey 20% Interest taken in this high quality exploration
Slide 22: Cal Dive Hedges: As Of April 30, 2006
Cal Dive Hedges: As Of April 30, 2006 H E L I X E N E R G Y S O L U T I O N S
Slide 23: 2006 Objectives (Excluding Remington)
2006 Objectives (Excluding Remington) Contracting Services Revenues: $650 - 750 million Margins: 25% - 35% Equity earnings: $27 - 32 million Achieve mechanical completion of the Independence Hub Begin construction of next facility opportunity Oil and Gas Production 44 - 47 Bcfe of production Begin p
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