Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q4 2010 Earnings Presentation
29 slides from Helix Energy Solutions's earnings presentation, Feb 24, 2011
Slide 1: Fourth Quarter 2010 Conference Call
Fourth Quarter 2010 Conference Call February 24, 2011
Slide 2: Forward-Looking Statements
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 “forward-looking statements” wit
Slide 3: Presentation Outline
Presentation Outline • Executive Summary Summary of Q4 2010 Results (pg. 4) • Operational Highlights by Segment Contracting Services (pg. 9) Oil & Gas (pg. 16) • Key Balance Sheet Metrics (pg. 19) • 2011 Outlook (pg. 21) • Non-GAAP Reconciliations (pg. 26) • Questions & Answers Caesar installing EOG
Slide 4: Executive Summary
4 Executive Summary
Slide 5: Executive Summary
Executive Summary ($ in millions, except per share data) (A) Results of Cal Dive, our former Shelf Contracting business, were consolidated through June 10, 2009, at which time our ownership interest dropped below 50%; thereafter, our remaining interest was accounted for under the equity method of ac
Slide 6: Executive Summary
Executive Summary • Q4 2010 as reported EPS of $(0.48) per share o Non-cash impairment charge of $16.7 million to write-off the carrying value of goodwill and a $7.1 million deferred tax asset valuation allowance attributable to our Southeast Asia well operations subsidiary (total of $23.9 million a
Slide 7: Executive Summary
Executive Summary • Oil and Gas o Fourth quarter average production rate of approximately 149 Mmcfe/d (51% oil) o Phoenix production commenced on 10/19/2010 after HP I returned from BP spill containment operations o Q1 production through February 22 averaged approximately 162 Mmcfe/d (63% oil) § Pho
Slide 8: Operational Highlights
8 Operational Highlights
Slide 9: Contracting Services
($ in millions, except percentages) (A) See non-GAAP reconciliation on slides 27-28. Amounts are prior to intercompany eliminations. Contracting Services • Gross margins adversely impacted by losses on lump sum Lufeng field abandonment project offshore China ($21.4 million in Q4) • Strong contributi
Slide 10: Equity in Earnings of Equity Investments
($ in millions) Equity in Earnings of Equity Investments (A) Results of Cal Dive, our former Shelf Contracting business, were consolidated through June 10, 2009, at which time our ownership interest dropped below 50%; thereafter, our remaining interest was accounted for under the equity method of ac
Slide 11: Contracting Services - Well Ops
Contracting Services - Well Ops GOM • Q4000 worked for Noble, Newfield and Mariner in the fourth quarter • Strong outlook for 2011 North Sea • Seawell and Well Enhancer enjoyed 85% utilization in the fourth quarter; a delay in completing the coiled tubing unit on the Well Enhancer prevented full uti
Slide 12: Contracting Services - Robotics
Contracting Services - Robotics • Enjoyed good utilization for five chartered ROV support vessels • Island Pioneer and Deep Cygnus with Canyon trenchers T750 and iTrencher active in GOM/North Sea with prospects for West Africa and backlog for the iTrencher • Olympic Canyon enjoyed full utilization w
Slide 13: Contracting Services - Subsea Construction
Contracting Services - Subsea Construction • Caesar completed EOG Toucan pipelay operation in Trinidad; then entered shipyard for planned maintenance and upgrades • Intrepid performed pipelay operations in Trinidad and the GOM • Express completed pipelay operations for BP’s Calisto, Mariner’s Balboa
Slide 14: Helix Fast Response System (HFRS)
Helix Fast Response System (HFRS) • Utilizes vessels and subsea systems proven in Macondo spill response • Interim system is ready for deployment • Enhanced system will capture and process up to 55,000 bpd in water depths to 8,000 feet (ready in Q2 2011) • 20 independent E&P operators have signed on
Slide 15: Contracting Services Utilization
Contracting Services Utilization • Express • Caesar (in service 5/31/10) • Island Pioneer (1) • Deep Cygnus (1) • Normand Fortress (1) • Olympic Triton (thru 10/23/2010) (1) • Well Enhancer • Q4000 • Normand Clough (1) • 2 ROVDrill Units • 5 Trenchers (1) Chartered vessels.
Slide 16: Oil & Gas
(A) Fourth quarter 2010 and 2009 impairments primarily associated with the reduction in carrying values of certain oil and gas properties due to year-end revisions in reserves. (B) Primarily consisted of $6.4 million and $20.1 million of costs associated with expiring offshore leases in the fourth q
Slide 17: Oil & Gas Operating Costs
Oil & Gas (A) Included accretion expense. (B) Excluded exploration expenses of $6.5, $21.5 and $0.4 million (of which $6.4, $20.1 and $0.0 million related to unproved property write-offs), and abandonment costs of $(0.3), $0.0 and $0.2 million for the quarters ended December 31, 2010, December 31, 2
Slide 18: Oil & Gas - Reserve Report Highlights
Proved Developed Proved Undeveloped Total Total Reserves (Bcfe) 146 230 376 Shelf 87 79 166 Deepwater 59 151 210 Oil (mmbbls) 12 13 25 Gas (Bcf) 76 151 227 SEC Case PV-10 (pre-tax, in millions) $ 490 $ 840 $ 1,330 PV-10 Forward Strip Price* (pre-tax, in millions) $ 681 $ 1,032 $ 1,713 Oil & Gas - Re
Slide 19: Key Balance Sheet Metrics
19 Key Balance Sheet Metrics
Slide 20: Debt and Liquidity Profile
Debt and Liquidity Profile Liquidity of approximately $787 million at 12/31/2010 (A) Includes impact of unamortized debt discount under our Convertible Senior Notes. (B) Liquidity as we define it is equal to cash and cash equivalents ($391 million), plus available capacity under our revolving credit
Slide 21: 2011 Outlook
21 2011 Outlook
Slide 22: 2011 Outlook
Broad Metrics 2011 Forecast 2010 Actual Oil and Gas Production 49 Bcfe 47 Bcfe EBITDAX $475 million $430 million CAPEX $225 million $179 million Commodity Price Deck 2011 Forecast 2010 Actual Hedged Oil $87.11 / bbl $75.27 / bbl Gas $4.80/ mcf $6.01 / mcf 2011 Outlook We expect to continue to improv
Slide 23: 2011 Outlook
2011 Outlook • Contracting Services o Strong backlog for the Q4000, Well Enhancer and Seawell in 2011 o Reduced visibility for Robotics utilization in first half of 2011 o Current regulatory environment in the GOM limits short-term opportunities in Subsea Construction and Robotics businesses o Conti
Slide 24: 2011 Outlook
2011 Outlook • Capital Expenditures o Contracting Services ($65 million) § No major vessel projects or dry docks planned for 2011 § Completion of HFRS upgrades in Q1 § Incremental investment in Robotics business § Additional capital expenditures required if awarded Statoil Cat B project o Oil and Ga
Slide 25: Summary of Hedging Positions
Summary of Hedging Positions * * As of February 23, 2011
Slide 26: Non-GAAP Reconciliations
26 Non-GAAP Reconciliations
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDAX ($ in millions) We calculate Adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization and exploration expense. Further, we do not include earnings from our interest in Cal Dive in any periods presented in our Adjusted EB
Slide 28: Revenue and Gross Profit As Reported
Revenue and Gross Profit As Reported ($ in millions) Non-GAAP Reconciliations
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