Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q2 2009 Earnings Presentation
31 slides from Helix Energy Solutions's earnings presentation, Jul 30, 2009
Slide 1: Second Quarter 2009 Earnings Conference Call
1 Second Quarter 2009 Earnings Conference Call July 30, 2009
Slide 2: Forward-looking statements
2 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 statemen
Slide 3: Presentation Outline
3 • Executive Summary Summary of Q2 2009 Results (pg. 4) 2009 Outlook (pg. 7) Liquidity and Capital Resources (pg. 11) • Operational Highlights by Segment Contracting Services (pg. 17) Oil & Gas (pg. 25) • Non-GAAP Reconciliations (pg. 28) • Questions & Answers Presentation Outline Subsea Interventi
Slide 4: Summary of Q2 2009 Results
Quarter Ended Six Months Ended Pee ee cept perssharsidate) 6/30/2009 a) «6/30/2008 +~—«-3/31/2009 +=» 6 80/2009) 6/30/2008 Revenues $ 495 $ 530 $ 571 §$ 1066 $ 972 Gross Proft Operating $ 201 $ 191 $ 161 $ 362 § 328 40% 36% 28% 34% 34% Oil & Gas Impairments/ARO Increases (63) 2 2 (63) (17) Explorati
Slide 5: Executive Summary
5 Second quarter results reflect the following matters on a pre-tax basis: • $59.4 million gain on the sale of 24.2 million shares of Cal Dive stock • $8.8 million gain on the sale of Helix RDS • $43.0 million gain associated with insurance recoveries received in connection with damage caused by Hur
Slide 6: Executive Summary (continued)
6 Executive Summary (continued) • Net debt balance decreased by $703 million year-to-date • Oil and gas production totaled 12.4 Bcfe for Q2 2009 versus 11.9 Bcfe in Q1 2009 • Avg realized price for oil $72.29 / bbl ($57.82 / bbl in Q1 2009), including effect of settled hedges • Avg realized price fo
Slide 7: 7
7
Slide 8: 2009 Outlook
8 • Contracting Services demand in 2H 2009 expected to soften • Express dry-dock, transit and utilization on Danny pipeline will impact external revenues • Capital expenditures of approximately $370 million • $200 million relates to completion of three major vessel projects (Well Enhancer, Caesar an
Slide 9: 2009 Outlook (continued)
9 2009 Outlook (continued) Independence Hub production platform
Slide 10: Moving Forward
10 • Continued focus on strengthening balance sheet and debt reduction • No major new capex projects planned • Capex levels significantly below 2009 level as major vessel programs are completed • 2010 capex range $150 - $200 million (preliminary estimate) • Phoenix and Danny PUD conversions in early
Slide 11: Liquidity and Capital Resources
11 Liquidity and Capital Resources
Slide 12: Significant Balance Sheet Improvements
12 Significant Balance Sheet Improvements Debt Liquidity (A) (A) Liquidity defined as Helix cash and cash equivalents on hand plus Helix revolver availability.
Slide 13: Liquidity and Capital Resources: Monetization of non-core assets
13 • Company continues to take a measured approach on its efforts to monetize non -core assets and businesses • Oil and gas assets • Bass Lite sale December 08 & January 09 ($49 million) • EC 316 sale in February 09 ($18 million) • Cal Dive (approximate 26% owned subsidiary) • Sold a total of 15.2 m
Slide 14: Key Credit Facility Covenants
14 Covenant Test Explanation Collateral Coverage Ratio > 1.75 : 1 Basket of collateral to Senior Secured Debt Fixed Charge Coverage Ratio > 2.75 : 1 Consolidated EBITDA to consolidated interest charges Consolidated Leverage Ratio < 3.5 : 1 Consolidated EBITDA to consolidated debt Company is in compl
Slide 15: Credit Facilities, Commitments and Amortization
15 Liquidity and Capital Resources Credit Facilities, Commitments and Amortization – $420 Million Revolving Credit Facility - Committed facility through June 2011. No required amortization. Fully paid down as of 6/30/2009. $408 million of revolver availability ($12 million of LCs outstanding) at 6/3
Slide 16: Operations Highlights
16 Operations Highlights
Slide 17: Subsea Construction
Ae HELIX ENERGY SOLUTIONS: Subsea Construction + Intrepid completed work on ENI Longhorn and Murphy Thunder Hawk deepwater projects in the Gulf of Mexico — Thunder Hawk project marked first time Helix installed large pipeline end manifolds in 6,000-foot water depths, using a single-line crane — Each
Slide 18: Contracting Services: Subsea Construction
18 Contracting Services Aerial view of Ingleside Spoolbase, with slip dredging project underway Subsea Construction • New spoolbase facility in Ingleside, Texas under construction – Pipe stalk length 5,230 feet – 32-foot slip can accommodate entire Helix fleet in the Gulf of Mexico • Welding of Heli
Slide 19: Contracting Services
19 Contracting Services Northern Canyon burying power cables for North Sea wind farm
Slide 20: Contracting Services: Well Ops
20 Contracting Services Coiled tubing operations for Marubeni on a deepwater well in the Gulf of Mexico Well Ops • Seawell is working for Shell in the North Sea • Q4000 is operational in the Gulf of Mexico: – Finished a 21-day drilling project in the Gulf of Mexico in support of a U.S. government-sp
Slide 21: Assets Under Construction
21 Assets Under Construction Caesar • Conversion 99% complete • Stinger has been installed • Commissioning of marine and pipelay systems ongoing • Transits to Gulf of Mexico following conversion and sea trials scheduled for fourth quarter 2009 Well Enhancer • Final incline test completed • Installat
Slide 22: Contracting Services
22 Contracting Services (A) Results of Cal Dive, our Shelf Contracting business, were consolidated through June 10, 2009, at which time our ownership interest dropped below 50%; thereafter, our remaining interest is accounted for under the equity method of accounting. (B) See non-GAAP reconciliation
Slide 23: Contracting Services: Revenue and Gross Profit by Division
23 Contracting Services (A) Amounts are before intercompany eliminations. See non-GAAP reconciliation on slides 29-30. Revenue and Gross Profit by Division ($ in millions)
Slide 24: Vessel Utilization and Production Facilities Throughput
ENERGY SOLUTIONS. Ae HELIX Quarter Ended June 30 March 31 Vessel Utilization 2009 2008 2009 Contracting Services Subsea Construction Vessels (A) 88% 93% 79% Well Operations 98% 60% 76% Robotics 72% 70% 64% Production Facilities Throughput Marco Polo (MBOE) 949 3,634 191 Independence Hub (BCFE) 79.5
Slide 25: Oil & Gas
25 Oil & Gas (A) Reflects reversal in first quarter 2009 of $73.5 million in previously disputed accrued royalties. (B) Reflects hurricane proceeds less related costs. In Q2 2009 proceeds totaled $97.7 million, offset by $7.4 million of hurricane-related repair costs and $51.5 million of additional
Slide 26: Oil & Gas: Operating Costs
26 Oil & Gas (A) Includes accretion expense. (B) Excludes hurricane-related repairs of $7.4 and $12.7 million, net of insurance recoveries of $97.7 and $3.1 million, for the quarters ended June 30, 2009 and March 31, 2009, respectively. (C) Excludes exploration expenses of $1.5, $1.5 and $0.5 millio
Slide 27: Summary of July 2009-Dec 2010 Hedging Positions
27 Summary of July 2009-Dec 2010 Hedging Positions
Slide 28: Non-GAAP Reconciliations
28 Non-GAAP Reconciliations
Slide 29: Adjusted EBITDAX reconciliation
} Quarter Ended Six Months Ended dune 30 March 31 June 30 June 30 Adjusted EBITDAX ($ in millions) 2008 2008 2009 2008 2008 Net income applicable to cammon shareholders $ 100 $ so $ 53 184 163 Non-cash impairments 19 2 s 19 17 Gain on asset sales (69) (19) () 70) 80) Prefered stock dividends 2 1 54
Slide 30: Non-GAAP Reconciliations: Revenue and Gross Profit As Reported
30 Non GAAP Reconciliations Revenue and Gross Profit As Reported ($ in millions)
Slide 31: Helix Energy Solutions
Aa HELIX 1 ENERGY SOLUTIONS
Helix Energy Solutions Group — Q2 2009 Earnings Presentation on 6ix