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
Date of Report (Date of earliest event reported): August 28, 2007
Helix Energy Solutions Group,
Inc.
(Exact name of registrant as
specified in its charter)
| Minnesota | 001-32936 | 95-3409686 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 400 N. Sam Houston Parkway
E., Suite 400 Houston, Texas |
77060 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: 281-618-0400
| (Former name or former address if changed since last report.) |
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:
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 7.01 Regulation FD Disclosure.
On August 28, 2007, Helix Energy Solutions Group, Inc. (“Helix”) issued a press release announcing that Helix will be making a presentation at the Lehman Brothers CEO Energy Conference in New York, New York on September 5, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. The presentation materials to be delivered at the conference are attached hereto as Exhibit 99.2 and incorporated by reference herein. The presentation materials will also be posted in the Investor Relations section of Helix’s website, www.helixesg.com.
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.
Forward-Looking Statements and Assumptions
This Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, included herein or incorporated herein by reference are forward-looking statements. Included among forward-looking statements are, among other things:
| • |
statements related to the volatility in
commodity prices for oil and gas and in the supply of and demand for oil and
gas or the ability to replace oil and gas reserves;
|
| • |
statements regarding our anticipated
production volumes, results of exploration, exploitation, development,
acquisition or operations expenditures and current or prospective reserve
levels with respect to any property or well;
|
| • |
statements regarding any financing
transactions or arrangements, or ability to enter into such transactions;
|
| • |
statements relating to the construction or
acquisition of vessels or equipment and our proposed acquisition of any
producing property or well prospect, including statements concerning the
engagement of any engineering, procurement and construction contractor and any
anticipated costs related thereto;
|
| • |
statements that our proposed vessels, when
completed, will have certain characteristics or the effectiveness of such
characteristics;
|
| • |
statements regarding projections of revenues,
gross margin, expenses, earnings or losses or other financial items;
|
| • |
statements regarding our business strategy,
our business plans or any other plans, forecasts or objectives, any or all of
which are subject to change;
|
| • |
statements regarding any Securities and
Exchange Commission or other governmental or regulatory inquiry or
investigation;
|
| • |
statements regarding anticipated legislative,
governmental, regulatory, administrative or other public body actions,
requirements, permits or decisions;
|
| • |
statements regarding anticipated developments,
industry trends, performance or industry ranking relating to our services or
any statements related to the underlying assumptions related to any projection
or forward-looking statement;
|
| • |
statements related to environmental risks,
drilling and operating risks, or exploration and development risks and the
ability of the company to retain key members of its senior management and key
employees;
|
| • |
statements regarding general economic or
political conditions, whether internationally, nationally or in the regional
and local market areas in which we are doing business; and
|
| • |
any other statements that relate to non-
historical or future information.
|
These forward-looking statements are often identified by the use of terms and phrases such as “achieve,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “plan,” “project,” “propose,” “strategy,” “predict,” “envision,” “hope,” “intend,” “will,” “continue,” “may,” “potential,” “achieve,” “should,” “could” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements.
Our actual results could differ materially from those anticipated in these forward- looking statements as a result of a variety of factors, including those described under the heading “Risk Factors” in our 2006 Form 10-K, as amended. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. Forward-looking statements are only as of the date they are made, and other than as required under the securities laws, we assume no obligation to update or revise these forward-looking statements or provide reasons why actual results may differ.
Reconciliation of Non-GAAP Financial Measures
In addition to net income, we evaluate our financial performance based on other factors, one primary measure of which is earnings before net interest, expenses, taxes, depreciation, amortization and exploration expenses (adjusted EBITDAX). 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.
The Reconciliation of Non-GAAP Measures related to the presentation materials to be delivered at the conference are attached hereto as Exhibit 99.3 and incorporated by reference herein. The Reconciliation of Non-GAAP Measures will also be posted in the Investor Relations section of Helix’s website, www.helixesg.com.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
| Number | Description | |
|
99.1
|
Press Release dated August 28, 2007. | |
|
99.2
|
Lehman Brothers CEO Energy Conference Presentation. | |
|
99.3
|
Reconciliation of Non-GAAP Measures. |
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: September 4, 2007
HELIX ENERGY SOLUTIONS GROUP, INC.
By: /s/ A. WADE PURSELL
A.
Wade Pursell
Executive Vice President and Chief Financial Officer
Index to Exhibits
| Exhibit No. | Description | |
|
99.1
|
Press Release dated August 28, 2007. | |
|
99.2
|
Lehman Brothers CEO Energy Conference Presentation. | |
|
99.3
|
Reconciliation of Non-GAAP Measures. |
Exhibit 99.1
PRESSRELEASE
www.HelixESG.com
Cal Dive International, Inc. • 400 N. Sam Houston Parkway E., Suite 400 • Houston, TX 77060-3500 • 281-618-0400 • fax: 281-618-0505
| For Immediate Release | 07-018 | |||||||
| Contact: | Wade Pursell | |||||||
Date:
|
August 28, 2007 | Title: | Chief Financial Officer | |||||
Helix to Present at Lehman Brothers CEO Energy Conference
HOUSTON, TX — Helix Energy Solutions (NYSE: HLX) announced today that it will present at the
Lehman Brothers CEO Energy Conference in New York, New York at the Sheraton New York Hotel & Towers
on Wednesday, September 5, 2007.
The presentation will begin at 10:25 a.m. (Eastern Time) in the Empire Ballroom East. Audio of the
presentation will be broadcast live from:
http://cc.talkpoint.com/LEHM002/090407a_jw/default.asp?entity=Helix
The slides will be available on the Helix website, www.HelixESG.com, by first clicking “Investor
Relations” and then “Presentations”.
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.
Exhibit 99.2
| Lehman Brothers 2007 CEO Energy Conference New York, NY September 5, 2007 |
| 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" 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 relating to services; and any statements of assumptions underlying any of the foregoing. Although Helix believes that the expectations reflected 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 ending December 31, 2006 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 press release and presentation. 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 Annual Report on Form 10-K for the year ending December 31, 2006, which was filed on March 1, 2007 and 10-K/A which was filed on June 18, 2007. |
| Helix Strategy Contracting Services Oil & Gas Financial Information Appendix Presentation Outline H E L I X E N E R G Y S O L U T I O N S |
| Helix Strategy H E L I X E N E R G Y S O L U T I O N S |
| Two Stranded Strategy Reservoir & Well Tech Services Drilling Production Facilities Construction Well Ops External Market Internal Market = Reduced Cyclicality Steady Growth And Superior Financial Returns 'Marginal' Field Focus Niche Assets & Services Lower Life Cycle Costs Backlog At Market Rates Oil & Gas Production Contracting Services & 'Cost Reduction' Focus |
| Near Term Strategic Initiatives H E L I X E N E R G Y S O L U T I O N S Key Steps Continue to Add Capacity to Key Contracting Services Generate Prospects and Focus Exploration Drilling on: Low Risk Shallow Water Program Deepwater Prospects which can be drilled with Q4000 Convert PUDs to PDPs Monetize Services and Assets which do not Minimize F&D Costs Continue to Expand Model Internationally |
| Contracting Services H E L I X E N E R G Y S O L U T I O N S |
| H E L I X E N E R G Y S O L U T I O N S Drilling/Completion Production Facilities Construction Well Ops Key Assets Q4000 Mobile Production Units Intrepid Express Caesar ROVs Q4000 Seawell Value Creating Methodologies Slimbore Wells Floater Re-Deployment Pipe Burial Non-Drill Rig Intervention 'Full cycle cost can be reduced by at least 20% compared to conventional approaches' Focus on Exploitation Cost Reductions Reservoir & Well Technology 120 + Engineers Reservoir Management |
| Organic Growth via Asset Additions Doubling Service Asset Base (see CAPEX details in Appendix) Reservoir Technology Drilling/Completion Production Facilities Construction Well Ops Current Assets 120 + Engineers Q4000 - Marco Polo TLP (50%) Pipelay - - Intrepid Express - Q4000 - - Seawell - - Mobile SIL - Independence Hub Semi (20%) ROV - - 33ROVs 5 Trenchers 2 ROV Drill Units - - 4 Chartered Vessels Shelf Construction - - 73% of Cal Dive Planned Additions As market dictates - Q4000 Drilling Upgrade - - H4500? - Helix Producer I - - Shiraz - Caesar 2000HPTrencher 4 ROVs Well Enhancer |
| Major Capital Projects - Contracting Services DP FPU Helix Producer I MSV Caesar MSV Well Enhancer MSV Q4000 |
| 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 Deepwater Gateway, L.L.C. and Independence Hub LLC and (ii) contracted revenue from the Helix Producer I Assumptions Backlog based on contracted work including LOIs Internal work for ERT (Q4000, Intrepid, Helix Producer I) Assumes minority partner on Phoenix Does not include any turnkey or EPIC projects; or low margin procurement mark-ups Full year 2007 budgeted revenue and equity earnings is $530 MM $ in millions as of 7/1/2007 Total: $1.75 Billion 2007 2008 2009 2010 Post 2010 East 296.6 586.6 325.5 220.3 327.9 |
| Oil & Gas H E L I X E N E R G Y S O L U T I O N S |
| Reserve Profile 2002 2003 2004 2005 2006 Helix 157 150 116 225 536 Remington 2004 2005 2006 2007 Helix 41 35 52 70 Remington Range 2002 2003 2004 2005 2006 Proved Developed 0.43 0.5 0.64 0.45 0.44 Proved Undeveloped 0.57 0.5 0.36 0.55 0.56 2002 2003 2004 2005 2006 Oil 0.46 0.5 0.54 0.4 0.41 Gas 0.54 0.5 0.46 0.6 0.59 Total Proven Reserves as of Year-End (Bcfe) Proved Reserves Annual Production (Bcfe) Proved Developed/PUD Ratio Estimate * Oil / Gas Reserves Mix * Estimates reflect low end of guidance range |
| Oil & Gas: Focus on Marginal Fields Mature Properties (Shallow Water) Mature Properties (Deepwater) H E L I X E N E R G Y S O L U T I O N S Marginal Development (Deepwater) Camelot Acquisition in North Sea : : : Phoenix Acquisition in Gulf of Mexico Drilling/Development of Noonan and Danny in Gulf of Mexico 'Marginal' : Fields/Prospects that are not material/significant to larger E&P Companies. Offers contracting opportunities over the course of a full cycle. Offers contracting opportunities over the course of a full cycle. Offers contracting opportunities over the course of a full cycle. Example |
| Mature Properties (Shallow Water) - Camelot Field H E L I X E N E R G Y S O L U T I O N S Strategy in Action Mature property no longer wanted by major operator Value will be unlocked by rejuvenation of existing production and tie back of nearby PUD reserves. Important first North Sea transaction. |
| H E L I X E N E R G Y S O L U T I O N S H E L I X E N E R G Y S O L U T I O N S Mature Properties (Deepwater) - Phoenix Field Strategy in Action Production facility on Typhoon Field destroyed during 2005 hurricane season. Field acquired and renamed Phoenix. Value will be unlocked by the use of a mobile production unit that should produce several fields sequentially over its lifetime. Upside from several satellite prospects that can be drilled with the Q4000. |
| H E L I X E N E R G Y S O L U T I O N S Deepwater Developments - Noonan & Danny Fields Strategy in Action Low risk, mid water drilling prospects generated in-house. Discoveries of at least 150 Bcfe announced in 1H/07 Fields relatively close to existing infrastructure and therefore can be developed cheaply and quickly. Expected F&D cost < $2.00 Mcfe. First Production within 18 months of discovery. We have several similar prospects that can be 'Exploited' using our services group. |
| 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.I. East Cameron 339 2 wells, 100 % W.I. 1/07 to 7/07 DANNY 100% W.I. E. Cameron 169 100% W.I. High Island A-466 75% W.I. Brazos 436 90% W.I. Vermilion 348 100% W.I. S. Marsh Island 123 100% W.I. 1st Qtr. 07 Discoveries. 2nd Qtr. 07 Discoveries |
| H E L I X E N E R G Y S O L U T I O N S Bottom-up reserve risk assessment based on historical success rates. 5-7 year drilling inventory Prospect Portfolio1 Notes: As acquired with Remington Oil & Gas. Based on July, 2006 Investor Presentation. F & D cost of $2.50 / Mcfe used throughout. Over $1 Billion of life of field services involved. |
| H E L I X E N E R G Y S O L U T I O N S Financial Information |
| Consistent Top Line Growth 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Contracting Services 63.9 93.9 139 128 110 164 240 259 300 500 936 1066 Oil & Gas 12.2 16.5 12.6 32.5 70.8 63.4 62.8 137.3 243 272 430 610 33% CAGR Revenues in Millions H E L I X E N E R G Y S O L U T I O N S Estimate |
| Bottom Line 2003 2004 2005 2006 2007 32.8 79.9 150 253 305 Net Income in Millions H E L I X E N E R G Y S O L U T I O N S Estimate * 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead costs during the year. * |
| Significant Cash Generation 2003 2004 2005 2006 2007 Contracting Services 37 53 159 323 430 Oil & Gas 90 186 194 342 420 EBITDAX in Millions (see GAAP reconciliation at www.HelixESG.com) Estimate * * 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead costs during the year. |
| 2002 2003 2004 2005 2006 5 7 13 17 15 Return on Capital Invested 5 7 13 17 15 Percentage (see calculation at Company's website - www.HelixESG.com) H E L I X E N E R G Y S O L U T I O N S * 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead costs during the year. * |
| MARAD Other Long Term Debt Term B Facility ($ 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 |
| ($ in Millions) Contracting Services 2007 2007 2007 Comments Drilling Drilling $68 $68 Q4000 Upgrade, H4500 Study Production Facilities Production Facilities 100 100 Helix Producer I, Shiraz Construction Construction 152 152 Caesar, ROVs, Plencher Well Operations Well Operations 105 105 Well Enhancer, Seatrac Maintenance CAPEX & other Maintenance CAPEX & other 75 75 Total Contracting Services Total Contracting Services $500 $500 Oil & Gas Oil & Gas Exploration Exploration $190 $190 Low Risk Shelf & Noonan / Danny Development (PUD PDP) Development (PUD PDP) 310 310 300 Bcfe of PUDs Total Oil & Gas Total Oil & Gas $500 $500 Total 2007 CAPEX Total 2007 CAPEX $1,000 $1,000 2007 CAPEX Program |
| Helix Energy Solutions |
| APPENDIX H E L I X E N E R G Y S O L U T I O N S |
| Q4000 Seawell SEA SIL Well Enhancer Structure / Resources Structure / Resources Contracting Services Marco Polo Ind. Hub Helix Producer I Shiraz Cal Dive (73%) Well Operations Drilling Reservoir Engineering & Well Techn. 4 DP DSVs 4 Sat DSVs 15 Diving Vessels 3 Pipelay Barges 5 Pipelay Barges 3 Derrick Barges 1 MSV Oil & Gas Production Deepwater Contracting >120 Engineers Construction Production Facilities MSV Q4000 Mature Properties Deepwater PUDs Prospect Generation/ Exploration Intrepid Express Caesar 35 ROVs 5 Trenchers 4 ROVs & Plencher >500 Bcfe >20 Deep Prospects >40 Shelf Prospects Note: Planned/Potential asset additions in red |
| Oil & Gas H E L I X E N E R G Y S O L U T I O N S |
| 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 |
| 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 2007 High Island 466 75 8 Gas Q4 2007 Vermilion 348 100 8 Gas Q4 2007 Main Pass Project 20-50 14 Gas Q4 2007 |
| 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 Oil Q3 2008 |
| Contracting Services H E L I X E N E R G Y S O L U T I O N S |
| Services - Reservoir and Well Technology CoreTeams(tm) - outsourced integrated reservoir management and well technology capabilities OnDemand(tm) - consultancy services Pulse(tm) - online analysis of upstream data FaultFinder(tm) - high definition analysis of faulting FlowDoctor(tm) - flow assurance service LogDoctor(tm) - formation evaluation services ProductionMentor(tm) - production optimization PromotePartner(tm) service offered to oil and gas companies to help maximise the value of an asset through a promote, farm out or divestment process. SandMentor(tm) - sand production analyzer WellDoctor(tm) is our well integrity assurance service Transforming subsurface uncertainty into value Helix RDS is a world class provider of reservoir and well technology services to the upstream oil and gas industry. The combination of our business scale, service scope, track record and independence make Helix RDS a unique service partner. This capability and experience continues to transform subsurface uncertainty into significant value for our clients around the globe. H E L I X E N E R G Y S O L U T I O N S |
| Casing/Riser Water Depth TD BML Hole Size 9 5/8" = 8500 ft 12000 ft 43/4" 13 3/8" = 6000 ft 14000 ft 6 / 8 1/2" 16" = 4000 ft 16000 ft 6 / 8 1/2" 13 5/8" surface BOP 13 5/8" Sub sea shut off and disconnect device Combination of proven surface BOP and slimhole D&C technology Modular packages Preserve multi-service capability Limit subsea equipment Subsea shutoff device only Niche deepwater application 2000 - 6000 ft + Normally pressured Shallow BML reservoir 12 - 16000 ft +/- Services - Drilling and Completion |
| Marco Polo TLP (50%) Located in 4,300 ft. in Green Canyon 608 Processing capacity: 120,000 BOPD 300 MMCFD Host facility for Marco Polo K2 Unit Genghis Khan (2007) Services - Production Facilities Independence Hub (20%) Located in 8,000 ft. in Mississippi Canyon Block 920 Processing capacity of 1 BCF Host for 10 gas fields in Eastern Gulf of Mexico Commenced production in July 2007 Helix Producer (78%) To be located on Phoenix field in 2,000 ft. in Green Canyon Block 236 Processing capacity: 45,000 BOPD 70 MMCFD Existing New FPSO Shiraz (50%) FEED study completed; awaiting customer Processing capacity 20,000 BOPD Storage capacity 200,000 barrels |
| Technically diverse DP Fleet consisting of reeled pipelay vessels Express and Intrepid and S-Lay vessel Caesar (2008) Specialized Assets Target Niche Markets Global Operations Under Cal Dive International; Helix owns 73% interest in Cal Dive Sat and Surface Diving Construction and abandonment Inspection, repair and maintenance Work Class ROV Systems Trenching/Burial Expertise DP Vessels Global Operations Deepwater Construction Robotics Shelf Construction Services - Construction |
| Life of field services Recognized industry leader Alternative to drill rig 25% - 50% cost advantage Riser based technology Market growing rapidly with tree deployments Established position in largest world market Property sales to Independents SIL based technology Signed 4 year $250 million well intervention contract with Shell for North Sea Announced construction of new well intervention vessel UK Market Seawell Q4000 Services - Well Operations US Market SEA Market SEATRAC Emerging well intervention market Acquired SEATRAC and renamed Well Ops SEA Own VDS and SIL based technology Subcontractor for 3-year Woodside well intervention program |
| MSV Well Enhancer Specifications: DP3 Well Intervention Vessel Length of 132 meter 7" 10,000 psi subsea intervention lubricator Electric line, slick line and coiled tubing capabilities Cement and compressor plant 160 Te. Huisman multi purpose tower 18 man saturated dive system with hyperbaric lifeboat for operation in 300 m. water depth 100 Te. Crane rated fro 600 m. water depth Project Info: Vessel excepted to be available 1Q2009 Expected CAPEX of $185 million 140 days of work contracted in 2009/10 2 work-class ROV's (Canyon Offshore) Accommodation for 120 personnel |
| DP FPU Helix Producer I ("HPI") Project Info: Vessel at Victor Lenac shipyard in Croatia and expected to arrive in the US in 1Q 2008 Fabrication of ten topsides modules ongoing at Kiewit Offshore Services in Ingleside, Texas Installation of modules onto HPI and hook-up to take at Kiewit yard in 2Q2008 with offshore deployment on Phoenix field in 3Q2008 CAPEX $190 million (8/8th and inclusive of vessel acquisition cost) Specifications: DP2 Vessel Length of 162 meter Processing capacity: 45,000 BOPD 70 MMCFD Disconnectable transfer system (DTS) Connected to export pipelines with flexible risers High pressure gas compression and oil pumping Characteristics Low cost floating production unit (FPU) Disconnectable (less hurricane risk) Re-deployable as FPU worldwide (also as early production test vessel) June 2007 DTS Departs with HPI Stays with Buoy DTS |
| MSV Caesar S-Lay Vessel Conversion Specifications: Length: 146 meter Transit Speed 13 knots Tension: 405 mT A&R Winch Pipe Range: 4" to 36" Stinger Length: 90 meter Main Crane: 300 mT Pipe Transfer Crane: 36 mT A-Frame: 450 mT Project Info: Vessel at COSCO yard in Nantong China First project in 2Q2008 Project Conversion Cost: $165 million (inclusive of vessel acquisition cost) Contracted Work: ERT Danny Noonan; dual 8-inch 34 mile flowlines in 3,000 ft. in GOM (2008) Murphy Thunder Hawk (GOM); flowlines & export pipelines with SCR's in 6,000 ft. (2008) BP Skarv Udan; 80 km 26-inch gas export pipeline in 1400 ft. offshore Norway (2009) Tensioners Shipyard Sponson Fabrication |
| Q4000 Vessel and Drilling Upgrade Vessel Upgrade Installation of 2 x 900 HP bow thrusters (making total of 8 thrusters) Installation of two 54" OD cross braces Upgrade from MOU to MODU Installation of variable frequency drives on existing thrusters to reduce load and fuel consumption and wear Re-building of all existing thrusters Overhaul of all engines Regulatory dry-dock frequency to be extended from 30 months to 60 months Drilling Upgrade Installation of surface mud return system and cement modules ( 4 deck modules and 3 below deck modules) Installation of 8 x 200 kips riser tensioners 13-5/8" Surface BOP stack with subsea shut-off device Project Info: Upgrades to coincide with regulatory dry-dock in 3-4Q2007 Total cost of drilling and vessel upgrades, overhauls and regulatory dry-dock is ~$80 million 2008 Contracted Work ~180 days for ERT (Helix) in (top hole) drilling / completion mode (contracted) 60 days for Shell in well intervention mode (contracted) 120 days for third parties in (top hole) drilling / completion and / or well intervention mode (bidding) Riser and Subsea System |
| Houston Aberdeen Perth Houston Aberdeen Singapore Houston Dallas Aberdeen Houston New Iberia Singapore Perth London Aberdeen Kuala Lumpur Perth H E L I X E N E R G Y S O L U T I O N S We Are 'Exporting' Our Business Model Houston Rotterdam Perth |
Exhibit 99.3
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Lehman Brothers CEO Energy Conference
September 5, 2007
Reconciliation of Non GAAP Measures
Lehman Brothers CEO Energy Conference
September 5, 2007
Slide 23
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):
| Estimated | ||||||||||||||||||||
| 2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||
Net income applicable to common shareholders |
$ | 32,771 | $ | 79,916 | $ | 150,114 | $ | 252,805 | $ | 296,000 | ||||||||||
Preferred stock dividends |
1,437 | 2,743 | 2,454 | 3,358 | 4,000 | |||||||||||||||
Cumulative effect of accounting change |
(530 | ) | — | — | — | — | ||||||||||||||
Income tax provision |
18,993 | 43,034 | 75,019 | 133,253 | 174,000 | |||||||||||||||
Net interest expense and other |
3,403 | 5,265 | 7,559 | 34,524 | 60,000 | |||||||||||||||
Non-cash stock compensation expense |
— | — | 1,381 | 8,523 | 13,000 | |||||||||||||||
Depreciation and amortization |
70,793 | 108,305 | 110,683 | 193,205 | 295,000 | |||||||||||||||
Non-cash impairment |
— | — | 790 | — | — | |||||||||||||||
Exploration expense |
— | — | 6,465 | 43,115 | 3,000 | |||||||||||||||
Non-recurring items |
— | — | — | — | 8,602 | |||||||||||||||
Share of equity investments: |
||||||||||||||||||||
Depreciation |
— | 3,009 | 4,427 | 4,960 | 6,400 | |||||||||||||||
Interest expense, net |
— | 2,179 | 1,608 | 289 | (100 | ) | ||||||||||||||
Adjusted EBITDAX |
$ | 126,867 | $ | 244,451 | $ | 360,500 | $ | 674,032 | $ | 859,902 | ||||||||||
We calculate adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and
amortization, exploration expense, non-cash stock compensation expense, non-cash non recurring
items (see note 2 above) and our share of depreciation, net interest expense and taxes from our
equity investments. Further, reduce adjusted EBITDAX for the minority interest in Cal Dive that we
do not own. 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.
Slide 24
RETURN
ON CAPITAL INVESTED (DOLLARS IN THOUSANDS):
| 2002 | 2003 | 2004 | 2005 | 2006(1) | ||||||||||||||||
Income from Operations |
$ | 21,009 | $ | 56,161 | $ | 130,958 | $ | 235,146 | $ | 416,775 | ||||||||||
Add: Litigation and Contract Reserves |
10,000 | — | — | — | — | |||||||||||||||
Tax Effected Earnings |
20,056 | 35,909 | 86,118 | 157,642 | 274,389 | |||||||||||||||
Total Capital (average quarterly shareholders’ equity, plus long term debt,
less Gunnison, Marco Polo, Independence Hub, Noonan, Well Enhancer,
and Helix Producer I investments in 2002 - 2006) |
412,908 | 486,184 | 642,855 | 954,633 | 1,797,875 | |||||||||||||||
ROCI |
5 | % | 7 | % | 13 | % | 17 | % | 15 | % | ||||||||||
| (1) | 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead costs during the year. |