Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Raymond James 27th Annual Institutional Investors Conference (March 2006)
43 slides from Helix Energy Solutions's conference presentation, Mar 17, 2006
Slide 1: Raymond James 27th Annual Institutional Investors Conference
Raymond James 27th Annual Institutional Investors Conference Orlando, Florida March 7, 2006 Owen Kratz - Chief Executive Officer Wade Pursell - Chief Financial Officer
Slide 2: Forward-Looking Statements
Certain statements made herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "will," "look forward to" and similar expressions are intended to ide
Slide 3: Additional Information
Helix and Remington will file 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 when it becomes available and any other relevant document
Slide 4: Presentation Outline
Helix Strategy Contracting Services Oil & Gas Production Financial Information Report Card Presentation Outline
Slide 5: Helix Energy Solutions Group, Inc.
Helix Energy Solutions Group, Inc. Ticker symbol: NASDAQ: HELX Website: www.HelixESG.com Trading will commence on the NASDAQ with new ticker symbol HELX on Monday March 6, 2006 Helix Energy Solutions H E L I X E N E R G Y S O L U T I O N S
Slide 6: Strategy
Strategy H E L I X E N E R G Y S O L U T I O N S
Slide 7: Industry Macro Issues
Industry Macro Issues H E L I X E N E R G Y S O L U T I O N S Increasing World Demand for Oil and Natural Gas Global Production Rates Peaked or Peaking Globalization of Natural Gas Market Increasing Number of Mature and Small Reservoirs Increasing Ratio of Contribution to Global Production from Marg
Slide 8: Helix: A Full Cycle Energy Service Company
Helix: A Full Cycle Energy Service Company H E L I X E N E R G Y S O L U T I O N S We provide development solutions and related services to the energy market and specialize in the exploitation of marginal fields where we differentiate ourselves by taking oil and gas production as well as cash as pay
Slide 9: Two Stranded Strategy
Two Stranded Strategy Services Production & = Reduced Cyclicality (Steady Growth) And Superior Financial Returns H E L I X E N E R G Y S O L U T I O N S
Slide 10: Services and production structure and resources
Q4000 Seawell Intrepid Express Caesar 25 ROVs 4 Trenchers Structure / Resources Structure / Resources Service Contracting Marco Polo Independence Hub Gunnison Shelf Contr. (Cal Dive) Reservoir & Well Tech Serv Deepwater Contracting Well Operations Pipelay Robotics 4 DP DSVs 4 Sat DSVs 15 Diving Vess
Slide 11: Contracting Services
Contracting Services H E L I X E N E R G Y S O L U T I O N S
Slide 12: Two Stranded Approach
Two Stranded Approach External Contracting & = H E L I X E N E R G Y S O L U T I O N S Production Contracting Internal Backlog And Superior Return on Capital Reservoir Engineering Drilling Facility Solutions Construction Well Ops.
Slide 13: Application of Contracting Services
H E L I X E N E R G Y S O L U T I O N S Exploration Appraisal Development Abandonment Production Application of Contracting Services Prospect Generation Drilling Eng Well Design Modeling Development Eng. Pipe/Umbilical Lay & Burial Tie-In Facilities IMR Field Ops. Production Enhancement Well Ops. Dr
Slide 14: Contracting Services: Near Term Goals
H E L I X E N E R G Y S O L U T I O N S Deepwater Focus on services that provide best "niche" financial returns in broader market and add value for production contracting. Shelf Integrate Stolt and Torch acquisitions into existing operations and possibly complete sale (retaining a majority stake) of
Slide 15: Shelf Consolidation
H E L I X E N E R G Y S O L U T I O N S Asset Type Cal Dive Stolt Torch Total Moored Pipelay 0 1 2 3 DP Sat Diving 3 1 0 4 Moored Sat Diving 2 1 1 4 Moored Surface Diving 2 3 1 6 Diving Utility Boats 6 2 1 9 Portable Sat Systems 2 1 0 3 Total 15 9 5 29 Shelf Consolidation 2006 estimated EBITDA in th
Slide 16: Why Shelf Diving Carve-Out
H E L I X E N E R G Y S O L U T I O N S Market Differences (Mature vs. Growth) Strategy Differences (Volume/Market Share vs. Less Services) Focus Objectives/Goals and Simplify Story for Investors Unlock Value Selling Minority stake in higher multiple business recouping all of investment made in asse
Slide 17: Deepwater Key Assets and Commercial Model
H E L I X E N E R G Y S O L U T I O N S Drilling/Completion Production Facilities Construction Well Ops Key Assets Q4000 Mobile Production Units Intrepid Express Caesar ROVs Q4000 Seawell ROVs Value Creating Methodologies Slimbore Wells Re- Deployment of Floater Pipe Burial Non Drill Rig Interventio
Slide 18: Services - Reservoir and Well Technology
Services - Reservoir and Well Technology CoreTeams(tm) - outsourced integrated reservoir management and well technology capabilities OnDemand(tm) - consultancy services Pulse(tm) - online analysis of upstream data FaultFinder(tm) - high definition analysis of faulting FlowDoctor(tm) - flow assurance
Slide 19: Drilling: Q4000 Upgrade
H E L I X E N E R G Y S O L U T I O N S Addition Of Modular-Based Drilling System Hybrid Slimbore Technology Designed For Deepwater Exploration And Appraisal Scheduled Completion: Early 2007 Drilling: Q4000 Upgrade
Slide 20: Risk Mitigation on Internal Exploration Prospects
Risk Mitigation on Internal Exploration Prospects Use of Q4000 Availability Low Relative Cost for Drilling Prospect Proximity to Existing Infrastructure Ease of Development Use of Partners on a Promoted Basis High Quality Prospects Low Cost Drilling Many Investors / Few Opportunities H E L I X E N E
Slide 21: Drilling with Q4000 - Value Proposition
Drilling with Q4000 - Value Proposition 60 Days of Work Indicative Dayrate ($K/Day) Revenue ($MM) Gross Profit ($MM) Construction 150 9 2 Well Intervention 200 12 4 Drilling for Third Party 300 18 6 Drilling Internal Prospect with two equal Partners 300 12* 4* H E L I X E N E R G Y S O L U T I O N S
Slide 22: Production Facilities: Strategy
H E L I X E N E R G Y S O L U T I O N S Host production facilities capitalizing on "Hub and satellite" field concept of the Deepwater Gulf Fixed monthly demand charges and volumetric tariff charges Farm-In opportunities Installation of facility and Subsea tiebacks Minimal re-deployable production fa
Slide 23: Production Facilities: Independence Hub
H E L I X E N E R G Y S O L U T I O N S Jointly owned (20%) with Enterprise Products L.P. Semi-submersible Capacity: Increased to 1 bcf/day Project is in build phase and will be deployed in MC920 (8,000 fsw) Mechanical completion expected in late 2006 with first production in early 2007 We see good
Slide 24: Subsea Tree Orders Are a Good Leading Indicator
H E L I X E N E R G Y S O L U T I O N S 2004 2005 2006 2007 2008 2009 50 78 82 92 88 92 Each tree installation can generate: Pipelay and Pipe Burial Intrepid Express Caesar Northern Canyon Downhole Well Intervention Q4000 Seawell (North Sea) Robotic Maintenance Canyon ROVs (28 units) Source: Quest O
Slide 25: Oil and Gas Production
H E L I X E N E R G Y S O L U T I O N S 2002 2003 2004 2005 Exploitation Additions Purchased Reserves 157 150 116 225 other Operator of 40 fields, 120 platforms and 500 wells 14 year history Focus on Production efficiency Well exploitation and enhancement Hedge commodity risk Total Proven Reserves a
Slide 26: Oil & Gas Production: 2005 Acquisitions
H E L I X E N E R G Y S O L U T I O N S Acquisitions Working Interest (%) Est. Acquisition & Development Costs Est. Acquisition Reserves Est. Marine Contracting Work Est. First Production Timing Development Property (PUD): $350 M - $400 M 130 - 200 Bcfe $100 - $130MM Telemark 30 1Q 2008 Devil's Isla
Slide 27: Remington Acquisition Overview
H E L I X E N E R G Y S O L U T I O N S $27.00 per share cash, 0.436 Cal Dive shares per Remington share $1.4 billion enterprise value based on 30.15 million Remington shares 58% cash / 42% stock Tax free reorganization Pro forma ownership: 86% Cal Dive, 14% Remington. Remington debt free with cash
Slide 28: Strategic Rationale
H E L I X E N E R G Y S O L U T I O N S Access to both deepwater prospects and the means to exploit them. Cal Dive operatorship. Results in continuation of differentiated long-term earnings growth. REM's prospect generation based growth strategy is highly complementary to Cal Dive's production model
Slide 29: Strategic Rationale
H E L I X E N E R G Y S O L U T I O N S Helix can enhance financial results of key deepwater prospects by promoting partnership arrangements Exploitation of REM's prospect inventory will provide increased backlog for Marine Contracting Combined Shelf Production business has critical mass. Operating
Slide 30: Remington Prospect Portfolio
H E L I X E N E R G Y S O L U T I O N S Bottom-up reserve risk assessment based on historical success rates. Risked Pretax PV?10 Number Of Prospects Net Unrisked Potential Net Risked Potential Forward Curve $8.50 Gas / $55 Oil (Bcfe) (Bcfe) ($MM) ($MM) Low Risk Shelf (Ps > 50%) 44 165 109 $315 $248
Slide 31: Remington Deepwater Inventory
Remington Deepwater Inventory All Prospects: 100% Operated, 100% Working Interest Noonan 45-65 MMboe potential Transocean Amirante under contract Q3 2006 exploration well $102,500 dayrate (1/3 of current spot dayrate) Option for second well at $135,000 per day High quality inventory enables mitigati
Slide 32: Combined Deepwater Portfolio
Combined Deepwater Portfolio Independence Hub Telemark Bass Lite Marco Polo Noonan Devil's Island Tiger Gunnison Tulane Ty Webb Motor Mouth Al Czervik H E L I X E N E R G Y S O L U T I O N S Drillable with Q4000 Remington Deepwater Prospects Helix Fields Helix Production Facilities
Slide 33: Post Remington Numbers
Combined Production : > 220 mcfe/d (2006) Combined Proven Reserves : > 500 bcfe (end 2005) Combined Deepwater Fields : > 30 Combined Risked Prospects : > 1,400 bcf Associated Services Backlog : > $1,500 m Post Remington Numbers H E L I X E N E R G Y S O L U T I O N S
Slide 34: Oil and Gas Production: Near Term Goals
Oil and Gas Production: Near Term Goals Oil and Gas Production: Near Term Goals Close Remington acquisition Opportunities for mature property deals possible as several independent E&P companies have divestment plans International areas opening up for our model e.g. North Sea Reserve enhancement on e
Slide 35: Cal Dive Hedges
Cal Dive Hedges: As Of February 28, 2006 H E L I X E N E R G Y S O L U T I O N S Production Period Instrument Type Average Monthly Volumes Weighted Average Price Crude Oil Jan - Dec 2006 Collars 125 MBbl $44.00 - $70.48 Jan - Dec 2007 Collars 50 MBbl $40.00 - $62.15 Natural Gas Jan - Dec 2006 Collar
Slide 36: Financial Information
H E L I X E N E R G Y S O L U T I O N S Financial Information
Slide 37: Consistent Top Line Growth
Consistent Top Line Growth 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marine Contracting 32.7 63.9 93.9 139 128 110 164 240 259 300 500 700 Oil & Gas 4.8 12.2 16.5 12.6 32.5 70.8 63.4 62.8 137.3 243 272 400 36% CAGR Revenues in Millions H E L I X E N E R G Y S O L U T I O N S Estima
Slide 38: Bottom Line
Bottom Line 2002 2003 2004 2005 2006 12.4 32.8 79.9 150 191 82 Net Income in Millions Range H E L I X E N E R G Y S O L U T I O N S Estimate
Slide 39: Significant Cash Generation
Significant Cash Generation 2002 2003 2004 2005 2006 65.8 126.9 239.3 353 490 128 EBITDA in Millions (see GAAP reconciliation at www.HelixESG.com) Estimate Range H E L I X E N E R G Y S O L U T I O N S
Slide 40: Return on Capital Invested
2001 2002 2003 2004 2005 2005 12 5 7 13 17 22 Return on Capital Invested 4th QTR 12 5 7 13 17 22 Percentage (see calculation at Company's website - www.HelixESG.com) H E L I X E N E R G Y S O L U T I O N S 42
Slide 41: CAPEX Mix
CAPEX MIX Marine Contracting Oil & Gas Production 58 42 2002 - 2005 $1 Billion Marine Contracting Oil & Gas Production 25 75 Contracting Services Oil & Gas Production 42 58 $ 1.5 Billion 2007 - 2009 Projected $1.2 Billion 2006 Projected Contracting Services Oil & Gas Production H E L I X E N E R G Y
Slide 42: Debt and Debt to Book Capitalization
MARAD Construction and Other Debt Long Term Revolving Credit (Amounts in Millions) 12/31/05 12/31/04 12/31/03 12/31/02 Debt To Book Capitalization 40% 35% 22% 40% Convertible Notes H E L I X E N E R G Y S O L U T I O N S
Slide 43: 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 for next facility opportunity Oil and Gas Production 44 - 47 Bcfe of production Begin