Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q2 2007 Earnings Presentation
29 slides from Helix Energy Solutions's earnings presentation, Aug 2, 2007
Slide 1: Second Quarter 2007 Earnings Conference Call
Second Quarter 2007 Earnings Conference Call August 2, 2007
Slide 2: 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 statements that could be deemed "forward-looking statements
Slide 3: Presentation Outline
Presentation Outline H E L I X E N E R G Y S O L U T I O N S Summary of Results Operational Highlights by Segment A. Contracting Services B. Oil & Gas Earnings Guidance Analysis Questions & Answers
Slide 4: Net Income Reconciliation
Net Income Reconciliation Amount in Thousands Diluted EPS Net income before non-recurring items $65,786 $0.70 Equity loss and impairment charge in Cal Dive's minority investment in OTSL, net of tax <10,466> <0.11> Reserve for Cal Dive DOJ settlement, net of tax <2,000> <0.02> Gain on sale of Cal Div
Slide 5: Summary of Results
Summary of Results H E L I X E N E R G Y S O L U T I O N S Second Quarter Second Quarter First Quarter 2007 2006 2007 Revenues $410.6 $305.0 $396.1 Gross Profit $141.8 $131.7 $135.6 Margins 35% 43% 34% Net Income $65.8(2) $69.1 $55.8 Margins 16%(2) 23% 14% Diluted EPS $0.70(2) $0.83 $0.60 Adjusted E
Slide 6: Revenue and Gross Profit by Segment
2Q 2007 2Q 2006 Contracting Services 269 224 Oil & Gas Production 141 81 Revenue and Gross Profit by Segment 2Q 2007 2Q 2006 Contracting Services 86 91 Oil & Gas Production 56 41 Contracting Services Oil & Gas 27% 35% 32% 39% 73% 65% 68% 61% Revenue Gross Profit
Slide 7: Long Term Debt and Net Debt to Book Capitalization
MARAD Other Long Term Debt Term B Facility ($ in millions) 6/30/07 12/31/06 12/31/05 Net Debt To Book Capitalization 40% 38% 43% Convertible Notes H E L I X E N E R G Y S O L U T I O N S Cal Dive Revolver
Slide 8: Contracting Services - Division Reporting (1)
Contracting Services - Division Reporting (1) Second Quarter Second Quarter Second Quarter First Quarter First Quarter First Quarter First Quarter Revenues (A) 2007 2006 2006 2007 Deepwater Construction $82.3 $62.6 $62.6 $92.5 Shelf Construction 135.3 124.8 124.8 149.2 Well Operations 63.3 39.7 39.7
Slide 9: Contracting Services - Division Reporting (2)
Second Quarter Second Quarter First Quarter Utilization 2007 2006 2007 Deepwater - Pipelay 70% 85% 93% - Robotics 86% 75% 70% Shelf Construction 63% 87% 70% Well Operations 94% 83% 65% Marco Polo Production Facility Throughput (MBOE) 3,532 2,951 2,978 Contracting Services - Division Reporting (2) H
Slide 10: Contracting Services - Images of the Quarter
Contracting Services - Images of the Quarter Canyon's ROV Drill Units being deployed on minerals project offshore Papua New Guinea Canyon takes possession of Olympic Canyon vessel to start 3 year charter Q4000 receives 60 day/year 3 year Well Intervention contract in GOM. Helix Producer I leaves dry
Slide 11: Contracting Services - Commentary (1)
Overall Revenues increased by 22% year over year and by 1% from Q1 due to asset additions and strengthening market conditions. Extensive asset downtime for regulatory maintenance skewed gross profitability downwards for the quarter, but we anticipate a return to 35% plus gross profit margins for the
Slide 12: Contracting Services - Commentary (2)
Shelf Construction Cal Dive's fleet utilization was down 24 points year over year due to extensive catch up vessel maintenance. All key assets are now back to work and the outlook for the rest of the year is encouraging. See separate earnings release and conference call for this majority owned subsi
Slide 13: Contracting Services - Commentary (3)
Q2 also saw the completion of a very successful well operations project offshore Australia, using portable intervention equipment designed and built by SEATRAC. Early in Q3 we completed the acquisition of 100% of SEATRAC, which will now operate as our Well Ops SEA business unit. Reservoir/Well Tech
Slide 14: Contracting Services Backlog
Contracting Services Backlog (excl. Cal Dive) Internal External Equity Earnings PF(1) East 245.5 1178.1 333.6 Deepwater Pipelay Production Facilities(1) Global Well Ops Canyon Offshore East 415.6 583.6 567.3 190.7 Notes Production Facilities backlog consists of (i) expected equity earnings from Deep
Slide 15: Oil & Gas - Financial Highlights
Oil & Gas - Financial Highlights Includes effect of NGLs. Second Quarter Second Quarter First Quarter 2007 2006 2007 Revenue (in millions) $142.1 $81.1 $131.0 Gross Profit (in millions) $55.7 $41.5 $48.6 Margin 39% 51% 37% Production (BCFe) Shelf 12.6 6.0 12.2 Deepwater 3.2 2.5 3.4 Average Commodity
Slide 16: Oil & Gas - Statistics
Oil & Gas - Statistics (A) Second Quarter Second Quarter Second Quarter Second Quarter First Quarter First Quarter 2007 2007 2006 2006 2007 2007 Total Per Mcfe Total Per Mcfe Total Per Mcfe Operating Expenses $22.9 $1.45 $9.7 $1.12 $22.0 $1.41 Exploration Expense (B) 3.0 0.19 (0.3) (0.04) 1.2 0.08 R
Slide 17: Exploration Program Discoveries
NOONAN 100% W.I. Exploration Program 12 of 12 Exploratory Wells Were Discoveries (1/07-7/07), 19 of 21 Since 7/06 Est. Discovered 2007 Reserves: 140 BCFE Proven: 330 BCFE P+P+P Est. Proven Finding & Development Cost < $2.50 MCFE E. Cameron 157 60 % W.I. Main Pass 232 50% W.I. E. Cameron 316 100 % W.
Slide 18: 2007 Production Estimate
2007 Production Estimate Q1 Actual 15.6 Bcfe New Developments Q3 Estimate Low Case 16.9 Bcfe High Case 21.3 Bcfe Q2 Actual 15.8 Bcfe Q4 Estimate Low Case 21.8 Bcfe High Case 27.4 Bcfe PDP Reserves PUD Reserves
Slide 19: Major Shelf Development Projects
Major Shelf Development Projects Project Name Working Interest % Estimated Initial Rate Predominant Hydrocarbon Phase (Net MMCFE/D) Est. 1st Production East Cameron 339 100 13 Oil Q3 2007 East Cameron 157/169 60/100 15 Gas Q3 2007 East Cameron 316 100 13 Gas Q3 2007 Brazos 436 90 6 Gas Q3 2008 High
Slide 20: Deepwater Development Projects
Deepwater Development Projects Project Name Working Interest Estimated Initial Rate Predominant Hydrocarbon Phase 1st Production % (Net MMCFE/D) Est. Atwater Valley 426 "Bass Lite" 18 20 Gas Q1 2008 Garden Banks 506 "Danny" "Noonan" 100 100 Oil & Gas Q3 2008 Green Canyon 236/237 "Phoenix" 100 175 Oi
Slide 21: Helix Hedges - As Of July 31, 2007
Helix Hedges - As Of July 31, 2007 H E L I X E N E R G Y S O L U T I O N S
Slide 22: Key Guidance Variables - YTD Performance
Key Guidance Variables - YTD Performance Present Trend ($ in millions) A. Actual YTD revenues are before intercompany elimination. See GAAP reconciliation on slide 27. B. See GAAP reconciliation on slides 28 and 29 .
Slide 23: Key Guidance Variables - YTD Performance (2)
Key Guidance Variables - YTD Performance (2) Present Trend H E L I X E N E R G Y S O L U T I O N S
Slide 24: Key Guidance Variables - YTD Performance (3)
Key Guidance Variables - YTD Performance (3) Present Trend (in millions, except percentages) H E L I X E N E R G Y S O L U T I O N S (A) Net of interest income and capitalized interest
Slide 25: Non-GAAP Measure Reconciliations
NON-GAAP MEASURE RECONCILIATIONS
Slide 26: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations H E L I X E N E R G Y S O L U T I O N S
Slide 27: Non-GAAP Measure Reconciliations cont.
Non-GAAP Measure Reconciliations cont. H E L I X E N E R G Y S O L U T I O N S
Slide 28: Non-GAAP Measure Reconciliations cont.
Non-GAAP Measure Reconciliations cont. H E L I X E N E R G Y S O L U T I O N S
Slide 29: Non-GAAP Measure Reconciliations cont.
Non-GAAP Measure Reconciliations cont. 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 2007 Earnings Presentation on 6ix