Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K DATED OCTOBER 28, 2009 - HELIX ENERGY SOLUTIONS GROUP INC | form8k.htm |
| EX-99.1 - PRESS RELEASE DATED OCTOBER 28, 2009 - HELIX ENERGY SOLUTIONS GROUP INC | exh991.htm |
Third
Quarter 2009
Earnings Conference Call
Earnings Conference Call
October
29, 2009
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 statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other financial items; future production volumes, results of
exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of
property or wells; any statements of the plans, strategies and objectives of management for future operations; any
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
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” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other financial items; future production volumes, results of
exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of
property or wells; any statements of the plans, strategies and objectives of management for future operations; any
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
The
United States Securities and Exchange Commission permits oil and gas companies,
in their filings with the SEC,
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
Forward-Looking
Statements
Summary of Q3 2009
Results (pg. 4)
2009 Outlook
(pg.
7)
Liquidity and
Capital Resources (pg.
10)
• Operational
Highlights by Segment
Contracting Services
(pg.
16)
Oil & Gas
(pg.
24)
• Non-GAAP
Reconciliations (pg.
27)
Well
Enhancer helideck
Presentation
Outline
(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 accounting until September 23, 2009, when we reduced our holdings with
the sale of the substantial majority of our remaining interest in Cal Dive. Second quarter revenues from our former Shelf Contracting business totaled $197.7
million.
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings with
the sale of the substantial majority of our remaining interest in Cal Dive. Second quarter revenues from our former Shelf Contracting business totaled $197.7
million.
(B) See non-GAAP
reconciliation on slides 28-29.
(C) Excludes Cal Dive
contribution in all periods presented.
Executive
Summary
• $17.9 million gain
on the sale of 23.2 million shares of Cal Dive stock
• $7.1 million of
incremental expense recorded as a result of the Company’s weather
derivative contract
derivative contract
•Expense concentrated
in Q3 2009 to coincide with hurricane season vs. straight
line expense
line expense
•Q3 results excluded
realized hedge gains of approximately $25 million for natural gas
hedge mark-to-market adjustments previously recognized as unrealized gains in Q1
and Q2 of 2009
hedge mark-to-market adjustments previously recognized as unrealized gains in Q1
and Q2 of 2009
The
after-tax effect of the above two items on EPS totaled $0.07 per
diluted
share.
share.
Executive
Summary
• Net debt balance
decreased by $853 million year-to-date
• Oil and gas
production totaled 9.8 Bcfe for Q3 2009 versus 12.4 Bcfe in Q2 2009
• Avg realized price
for oil $68.86 / bbl ($72.29 / bbl in Q2 2009), including effect of
settled hedges
settled hedges
• Avg realized price
for gas $8.02 / Mcf ($7.62 / Mcf in Q2 2009), including the effect of
settled hedges
settled hedges
Executive
Summary (continued)
Helix
Producer I topside module installation progress at Kiewit Offshore Services
fabrication yard
• Express dry-dock, transit
and utilization on
Danny pipeline is impacting external revenues
Danny pipeline is impacting external revenues
• Capital expenditures
of approximately $340 to
$360 million for 2009, $209 million spent
year-to-date
$360 million for 2009, $209 million spent
year-to-date
• $205 million
relates to completion of three
major vessel projects (Well Enhancer, Caesar
and Helix Producer I)
major vessel projects (Well Enhancer, Caesar
and Helix Producer I)
• $55 million relates
to development of Danny
and Phoenix oil fields
and Phoenix oil fields
• Improved liquidity
and debt levels (see slide 11)
Express
spooling pipe for ERT Danny project
2009
Outlook
• Production range:
43 - 47 Bcfe
• Oil and gas
prices
• Without hedges:
$4.37 /mcfe;
$66.41 /bbl
$66.41 /bbl
• With realized
hedges and mark-to-
market adjustments (gas only):
$7.45 /mcfe; $70.91 /bbl
market adjustments (gas only):
$7.45 /mcfe; $70.91 /bbl
HPI
pipe racks connecting production modules
to buoy system
to buoy system
2009
Outlook (continued)
Liquidity
and
Capital
Resources
Capital
Resources
Well
Enhancer and Seawell in Aberdeen, Scotland
Debt
Liquidity*
of $781 million at 9/30/09
* Defined as available revolver capacity plus cash
Significant
Balance Sheet Improvements
• Completed (≈ $600
million pre-tax):
•Oil and gas
assets
• Bass Lite sale
December 08 & January 09 ($49 million)
• EC 316 sale in
February 09 ($18 million)
• Cal
Dive
• Sold a total of
15.2 million shares of Cal Dive common stock to Cal Dive
in January and June 2009 for aggregate proceeds of $100 million
in January and June 2009 for aggregate proceeds of $100 million
• Sold 45.8 million
Cal Dive shares in secondary offerings for proceeds of
≈ $405 million (net of offering costs) in June and September 2009
≈ $405 million (net of offering costs) in June and September 2009
• Sold
Helix RDS for $25 million in April 2009
Company
will continue to seek a sale of its shelf oil and gas properties
Liquidity
and Capital Resources
Company
is in compliance as of 9/30/2009, and based on current forecasts expects
compliance at December 31, 2009.
compliance at December 31, 2009.
|
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
|
Liquidity
and Capital Resources
Credit
Facilities, Commitments and Amortization
– $435
Million Revolving Credit Facility -
UNDRAWN.
• Facility extended to
November 2012.
• In July 2011,
commitments reduced to $407 million.
• $50 million of LCs
in place.
– $416
Million Term Loan B - Committed
facility through June 2013. $4.3
million
principal payments annually.
principal payments annually.
– $550
Million High Yield Notes - Interest only
until maturity (January 2016) or called
by Helix. First Helix call date is January 2012.
by Helix. First Helix call date is January 2012.
– $300
Million Convertible Notes - Interest only
until put by noteholders or called by
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
– $119
Million MARAD - Original 25 year
term; matures February 2027. $4.4
million
principal payments annually.
principal payments annually.
Liquidity
and Capital Resources
• Completed the
offshore work on the
Reliance KGD6 Project in the Bay of
Bengal
Reliance KGD6 Project in the Bay of
Bengal
• Express
returned from India
to the Gulf of
Mexico after her regulatory dry-dock in
Spain and began spooling the Helix ERT
Danny 12-inch pipe in 8-inch pipe (PIP)
pipeline at Helix’s new spoolbase in
Ingleside, Texas
Mexico after her regulatory dry-dock in
Spain and began spooling the Helix ERT
Danny 12-inch pipe in 8-inch pipe (PIP)
pipeline at Helix’s new spoolbase in
Ingleside, Texas
• Intrepid
Gulf of
Mexico activities included:
– Completed Newfield
Fastball project
– Installed jumpers
for BP to tie-in
Murphy’s Thunder Hawk and BHP
Shenzi export pipelines
Murphy’s Thunder Hawk and BHP
Shenzi export pipelines
– Worked for Helix ERT
on the
Phoenix Project
Phoenix Project
Caesar
pipelay stinger
Contracting
Services
• Olympic
Canyon working for
Reliance Industries offshore India
under long term inspection, repair
and maintenance contract
Reliance Industries offshore India
under long term inspection, repair
and maintenance contract
• Olympic
Triton supporting
Technip’s Deep Blue on GOM
Projects and will transit to West
Africa under contract with Technip
Technip’s Deep Blue on GOM
Projects and will transit to West
Africa under contract with Technip
• Island
Pioneer and Northern
Canyon enjoyed high utilization on
North Sea trenching projects
Canyon enjoyed high utilization on
North Sea trenching projects
Cable
trencher T200 being launched from the Seacor Canyon offshore
Indonesia
Contracting
Services
• Seawell worked the majority
of the quarter
for Shell under the long term firm contract
and also worked for BP, Apache and
Venture
for Shell under the long term firm contract
and also worked for BP, Apache and
Venture
• Q4000 worked for Chevron
and Walter Oil
& Gas in well intervention mode in July
and for ENI as an accommodation vessel
for the rest of the quarter. ENI work was
contracted at low rates because of delays
in prospective well intervention work.
& Gas in well intervention mode in July
and for ENI as an accommodation vessel
for the rest of the quarter. ENI work was
contracted at low rates because of delays
in prospective well intervention work.
• Well
Ops APAC operations
still
being
impacted by refurbishment of the Vessel
Deployment System and Subsea
Intervention Lubricator
impacted by refurbishment of the Vessel
Deployment System and Subsea
Intervention Lubricator
• Well
Enhancer construction
completed at
end of the third quarter and is now
generating revenue
end of the third quarter and is now
generating revenue
Subsea
Intervention Lubricator system
onboard Well Enhancer
onboard Well Enhancer
Contracting
Services
Well
Enhancer generating revenue
Caesar
completed sea trials offshore China
HPI
external thruster porches, DTS receptacle
and all production modules installed
and all production modules installed
Marine
Capital Projects
• DTS buoy loaded out
and to be installed by
Q4000 in November 2009
Q4000 in November 2009
• Installation of
2,500-ton production modules
underway and expected to be completed
November with hook-up to follow
underway and expected to be completed
November with hook-up to follow
• Expect deployment in
Phoenix field
in Q2 2010
in Q2 2010
HPI
production module installation
Disconnectable
Transfer System
Transfer System
Helix
Producer I
(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 accounting until September 23, 2009, when we reduced our holdings
with the sale of the substantial majority of our remaining interest in Cal Dive.
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings
with the sale of the substantial majority of our remaining interest in Cal Dive.
(B) See non-GAAP
reconciliation on slides 28-29. Amounts
are prior to intercompany eliminations.
(C) Includes corporate
and operational support overheads.
(D) Amounts primarily
represent equity in earnings of Marco Polo and Independence Hub investments and
equity in earnings from Cal Dive from June 11
through September 23, 2009.
through September 23, 2009.
Contracting
Services
(A) Amounts are before
intercompany eliminations. See
non-GAAP reconciliation on slides 28-29.
Contracting
Services
Contracting
Services
(A)
Includes REM
Forza on long-term
charter.
24
(B) Q2 amounts
reflect
$11.5 million of impairments
related to reduction in
carrying values of certain oil
and gas properties due to
reserve revisions.
$11.5 million of impairments
related to reduction in
carrying values of certain oil
and gas properties due to
reserve revisions.
(C) Includes UK
production of 0.1
Bcfe in Q3 2008 and 0.2 Bcfe
in Q2 2009.
Bcfe in Q3 2008 and 0.2 Bcfe
in Q2 2009.
(D) Including effect of
settled
hedges.
hedges.
Oil
& Gas
(A) Includes accretion
expense.
(B) Excludes
hurricane-related repairs of $5.1 , $2.3 and $7.4 million, net of insurance
recoveries of $0, $0, and
$97.7 million, for the
quarters ended September 30, 2009, September 30, 2008 and June 30, 2009, respectively.
quarters ended September 30, 2009, September 30, 2008 and June 30, 2009, respectively.
(C) Includes $10.4
million related to a weather derivative contract in the third quarter of
2009. Excludes
exploration expenses of $0.9,
$1.6 and $1.5 million, and abandonment of $2.9, $6.5 and $0.8 million for the quarters ended September 30, 2009, September 30,
2008 and June 30, 2009, respectively.
$1.6 and $1.5 million, and abandonment of $2.9, $6.5 and $0.8 million for the quarters ended September 30, 2009, September 30,
2008 and June 30, 2009, respectively.
Oil
& Gas
Summary
of Oct 2009-Dec 2010 Hedging Positions
Non
GAAP Reconciliations
Non
GAAP Reconciliations
