UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Helix Energy Solutions Group, Inc.

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation)		001-32936 (Commission File Number)		95-3409686 (IRS Employer Identification No.)

400 North Sam Houston Parkway East, Suite 400 Houston, Texas (Address of principal executive offices)		77060 (Zip Code)

281-618-0400
(Registrant’s telephone
number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition.

     On August 1, 2007, Helix Energy Solutions Group, Inc. (“Helix”) issued a press release announcing its second quarter results of operation for the period ended June 30, 2007. Attached hereto as Exhibits 99.1, and incorporated by reference herein, is the press release.

     This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, and such information is not incorporated by reference into any registration statements or other document filed under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, regardless of the general incorporation language contained in such filing, except as shall be expressly set forth by specific reference to this filing.

Item 7.01 Regulation FD Disclosure.

     On August 1, 2007, Helix issued a press release announcing its second quarter results of operation for the period ended June 30, 2007. In addition, on August 2, 2007, Helix is making a presentation (with slides) to analysts and investors regarding its financial and operating results. Attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein are the press release and the slides for the Second Quarter 2007 Earnings Conference Call Presentation issued by Helix.

     This information is not deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and such information is not incorporated by reference into any registration statements or other document filed under the Securities Act or the Exchange Act, regardless of the general incorporation language contained in such filing, except as shall be expressly set forth by specific reference to this filing.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Number		Description
99.1		Press Release of Helix Energy Solutions Group, Inc. dated August 1, 2007 reporting financial results for the second quarter of 2007.
99.2		Second Quarter 2007 Earnings Conference Call Presentation.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 1, 2007

Index to Exhibits

Exhibit No.		Description
99.1		Press Release of Helix Energy Solutions Group, Inc. dated August 1, 2007 reporting financial results for the second quarter of 2007.
99.2		Second Quarter 2007 Earnings Conference Call Presentation.

Exhibit 99.1

		PRESSRELEASE     www.HelixESG.com

Helix Energy Solutions Group, Inc. • 400 N. Sam Houston Parkway E., Suite 400 • Houston, TX 77060-3500 • 281-618-0400 • fax: 281-618-0505

For Immediate Release		07-016

		Contact:		Wade Pursell
Date: August 1, 2007		Title:		Chief Financial Officer

Helix Reports Second Quarter Results

HOUSTON, TX —Helix Energy Solutions (NYSE: HLX) reported second quarter net income of $65.8 million, or $0.70 per diluted share, excluding three non-recurring items recorded by its majority owned subsidiary, Cal Dive International, Inc. Including the non-recurring items, Helix reported second quarter net income of $57.7 million, or $0.61 per diluted share.

The non-recurring items recorded by Cal Dive in the second quarter include $11.8 million in non-cash equity losses and a related asset impairment charge in connection with Cal Dive’s investment in Offshore Technology Solutions Limited (“OTSL”), a Trinidad and Tobago entity in which Cal Dive owns a 40% minority interest, and a $2.0 million cash settlement, subject to final negotiation of a court-approved settlement agreement, to be paid for a civil claim by the Department of Justice related to the Stolt and Torch acquisitions in 2005. Cal Dive also reported a $1.7 million gain on a sale of a portable saturation diving asset during the second quarter.

Summary of Results
(in thousands, except per share amounts and percentages)

		Second Quarter								First Quarter				Six Months
		2007				2006				2007				2007				2006
Revenues		$	410,574			$	305,013			$	396,055			$	806,629			$	596,661
Gross Profit			141,765				131,692				135,615				277,380				233,958
			35	%			43	%			34	%			34	%			39	%
Net Income			57,702				69,139				55,820				113,522				124,528
			14	%			23	%			14	%			14	%			21	%
Diluted Earnings Per Share			0.61				0.83				0.60				1.21				1.51

Martin Ferron, President and Chief Executive Officer of Helix, stated, “We expected Q2 earnings to be similar to those reported for Q1 and actually posted an improved result, even after the negative impact of the non-recurring items described above. This improvement was also achieved despite another very busy quarter for marine asset maintenance, with the Intrepid and several key Cal Dive vessels undergoing regulatory drydockings during the period. That maintenance work is now largely behind us,

except for the planned upgrade to the Q4000, and we are anticipating a strong second half of the year for Contracting Services.

“In our Oil and Gas business unit we had another very successful quarter with the drill bit, going six for six with exploratory wells. This takes our success record to 12 for 12 for the first half of the year and improves our proven reserve base by around 140 bcfe. On the production front we plan to bring several key shelf development projects onstream in the second half of the year, and our deepwater development projects remain on schedule to boost output next year.

“We have updated the assessment of the key variables that drive our earnings for the year and this will be covered in the conference call tomorrow. Based on our analysis we are comfortable with the present consensus earnings estimate for 2007 of $3.26/share, subject to no further significant deterioration in the natural gas price. We have created very meaningful future value in our deepwater development projects portfolio and, as set out in our initial earnings guidance, we may monetize part of that value, in order to reduce debt and contribute to near term earnings.”

Financial Highlights

	•		Revenues: The $105.6 million increase in year-over-year second quarter revenues was driven primarily by an increase in oil and gas sales of $61.0 million due primarily to the production added from the acquisition of Remington Oil and Gas Corporation. The remaining increase was due to improvements in contracting services revenues due to much better market conditions.
	•		Margins: 35% is eight points less than the year ago quarter due primarily to significant out of service days for Cal Dive’s vessels in regulatory drydocks (373 days in 2Q 2007 vs. 89 days in 2Q 2006) and an increased DD&A rate for oil and gas production due to the Remington acquisition.
	•		SG&A: $33.4 million increased $6.0 million from the same period a year ago due primarily to increased overhead to support our growth. This level of SG&A was 8% of second quarter revenues, down from the 9% in the year ago quarter.
	•		Equity in Earnings: Net losses of $4.7 million is comprised of the $11.8 million impairment / equity losses in Cal Dive’s minority interest in OTSL offset by $7.0 million for our share of earnings for the quarter of Deepwater Gateway, L.L.C.’s earnings relating to the Marco Polo facility and demand fees relating to the Independence Hub facility.
	•		Income Tax Provision: The Company’s effective tax rate for the quarter was 35%, compared to 34% for last year’s second quarter due primarily to the nondeductibility of the OTSL charges and the DOJ reserve.
	•		Balance Sheet: Total consolidated debt as of June 30, 2007 was $1.4 billion. This includes $140 million under Cal Dive’s revolving facility which is non-recourse to Helix. This represents 43% net debt to book capitalization and with $735 million of adjusted EBITDAX during the last twelve months, this represents 1.8 times trailing twelve month adjusted EBITDAX.

Further details are provided in the presentation for Helix’s quarterly conference call (see the Investor Relations page of www.HelixESG.com). The call, scheduled for 9:00 a.m. Central Daylight Time on Thursday, August 2, 2007, will be webcast live. A replay will be available from the Audio Archives page on our website.

Helix Energy Solutions, headquartered in Houston, Texas, is an international offshore energy company that provides development solutions and other key life of field services to the open energy market as well as to our own oil and gas business unit. That business unit is a prospect generation, exploration, development and production company. Employing our own key services and methodologies, we seek to lower finding and development costs, relative to industry norms.

This press release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All 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 statement concerning developments, performance or industry rankings; any statements regarding future economic conditions or performance; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. 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, including the Company’s Annual Report on Form 10-K, as amended by our Form 10-K/A filed on June 18, 2007 (“2006 Form 10-K”), for the year ending December 31, 2006 and any subsequent reports on Form 10-Q. We assume no obligation and do not intend to update these forward-looking statements.

HELIX ENERGY SOLUTIONS GROUP, INC.

Comparative Condensed Consolidated Statements of Operations

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except per share data)		2007				2006				2007				2006
		(Unaudited)
Net revenues		$	410,574			$	305,013			$	806,629			$	596,661
Cost of sales			268,809				173,321				529,249				362,703
Gross profit			141,765				131,692				277,380				233,958
Gain on sale of assets, net			5,684				16				5,684				283
Selling and administrative			33,388				27,414				63,988				48,442
Income from operations			114,061				104,294				219,076				185,799
Equity in earnings of investments			(4,748	)			4,520				1,356				10,756
Net interest expense and other			14,286				2,983				27,298				5,440
Income before income taxes			95,027				105,831				193,134				191,115
Income tax provision			33,261				35,887				66,384				64,978
Minority interest			3,119				—				11,338				—
Net income			58,647				69,944				115,412				126,137
Preferred stock dividends			945				805				1,890				1,609
Net income applicable to common shareholders		$	57,702			$	69,139			$	113,522			$	124,528
Weighted Avg. Shares Outstanding:
Basic			90,047				78,462				90,021				78,216
Diluted			95,991				83,965				95,262				83,659
Earnings Per Share:
Basic		$	0.64			$	0.88			$	1.26			$	1.59
Diluted		$	0.61			$	0.83			$	1.21			$	1.51

Comparative Condensed Consolidated Balance Sheets

ASSETS										LIABILITIES & SHAREHOLDERS’ EQUITY
(in thousands)		June 30, 2007				Dec. 31, 2006				(in thousands)		June 30, 2007				Dec. 31, 2006
		(unaudited)										(unaudited)
Current Assets:										Current Liabilities:
Cash and equivalents		$	96,390			$	206,264			Accounts payable		$	268,877			$	240,067
Short term investments			10,000				285,395			Accrued liabilities			188,148				199,650
Accounts receivable			368,226				370,709			Income taxes payable			—				147,772
Other current assets			76,832				61,532			Current mat of L-T debt (1)			26,165				25,887
Total Current Assets			551,448				923,900			Total Current Liabilities			483,190				613,376
										Long-term debt (1)			1,386,011				1,454,469
Net Property & Equipment:										Deferred income taxes			476,094				436,544
Contracting Services			928,467				800,503			Decommissioning liabilities			140,682				138,905
Oil and Gas			1,608,929				1,411,955			Other long-term liabilities			4,231				6,143
Equity investments			212,319				213,362			Minority interest			73,152				59,802
Goodwill			828,228				822,556			Convertible preferred stock (1)			55,000				55,000
Other assets, net			137,758				117,911			Shareholders' equity (1)			1,648,789				1,525,948
Total Assets		$	4,267,149			$	4,290,187			Total Liabilities & Equity		$	4,267,149			$	4,290,187

Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Six Months Ended June 30, 2007

Earnings Release:

Balance Sheet:		“...1.8 times trailing twelve month adjusted EBITDAX.”

Reconciliation From Net Income to Adjusted EBITDAX (excluding gain on sale of Cal Dive IPO in 4Q06 and non-recurring items:

     OTSL impairment and DOJ accrual in 2Q07):

		2Q07				1Q07				4Q06				3Q06				2Q06
		(in thousands, except ratio)
Net income applicable to common shareholders		$	57,702			$	55,820			$	65,948			$	57,029				69,139
Preferred stock dividends			945				945				945				804				805
Income tax provision			30,456				28,617				34,166				31,409				35,887
Net interest expense and other			13,605				12,331				13,981				15,103				2,983
Non-cash stock compensation expense			3,546				3,267				2,797				1,910				2,251
Depreciation and amortization			71,918				67,558				61,809				63,879				34,346
Exploration expense			2,978				1,190				1,820				19,520				(330	)
Non-recurring items			8,602				—				—				—				—
Share of equity investments:
Depreciation			1,965				1,004				1,004				1,004				1,003
Interest expense, net			(38	)			(57	)			(70	)			(59	)			(43	)
Adjusted EBITDAX		$	191,679			$	170,675			$	182,400			$	190,599			$	146,041
Trailing Twelve Months Adjusted EBITDAX		$	735,353
Net Debt at June 30, 2007 (a)		$	1,305,786
Ratio			1.8

We calculate adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization, exploration expense, non-cash stock compensation expense and our share of depreciation, net interest expense and taxes from our equity investments. Further, we reduce adjusted EBITDAX for the minority interest in Cal Dive that we do not own. Adjusted EBITDAX margin is defined as adjusted EBITDAX divided by net revenues. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company’s operating performance without regard to items which can vary substantially from company to company and help investors meaningfully compare our results from period to period. Adjusted EBITDAX should not be considered in isolation or as a substitute for, but instead is supplemental to, income from operations, net income or other income data prepared in accordance with GAAP. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions which are excluded.

(a) Total debt less cash, cash equivalents and short term investments