SEC Filing | Helix Energy Solutions Group, Inc.

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form8k.htm

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): October 24, 2011

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)		281-618-0400 (Registrant’s telephone number, including area code)	77060 (Zip 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):

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

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

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

|_| 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 October 24, 2011, Helix Energy Solutions Group, Inc. (“Helix”) issued a press release announcing its third quarter results of operation for the period ended September 30, 2011. Attached hereto as Exhibit 99.1, and incorporated by reference herein, is the press release.

Item 7.01 Regulation FD Disclosure.

On October 24, 2011, Helix issued a press release announcing its third quarter results of operation for the period ended September 30, 2011. In addition, on October 25, 2011, 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 Third Quarter Earnings Conference Call Presentation issued by Helix. The presentation materials will also be posted beginning on October 25, 2011 in the Presentations section under Investor Relations of Helix’s website, www.HelixESG.com.

Item 9.01 Financial Statements and Exhibits.

Number Description

---------- --------------

99.1	Press Release of Helix Energy Solutions Group, Inc. dated October 24, 2011 reporting financial results for the third quarter of 2011.

99.2	Third Quarter 2011 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: October 24, 2011

HELIX ENERGY SOLUTIONS GROUP, INC.

By: /s/ Anthony Tripodo

Anthony Tripodo

Executive Vice President and Chief Financial Officer

Index to Exhibits

Exhibit No. Description

99.1	Press Release of Helix Energy Solutions Group, Inc. dated October 24, 2011 reporting financial results for the third quarter of 2011.

99.2	Third Quarter 2011 Conference Call Presentation.

exh991.htm

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 11-016

Date: October 24, 2011 Contact: Stephen Powers

Director, Finance & Investor Relations

Helix Reports Third Quarter 2011 Results

HOUSTON, TX – Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $46.0 million, or $0.43 per diluted share, for the third quarter of 2011 compared with net income of $26.2 million, or $0.25 per diluted share, for the same period in 2010, and net income of $41.3 million, or $0.39 per diluted share, in the second quarter of 2011. Net income for the nine months ended September 30, 2011 was $113.2 million, or $1.06 per diluted share, compared with a net loss of $77.3 million, or $(0.74) per diluted share, for the nine months ended September 30, 2010.

Owen Kratz, President and Chief Executive Officer of Helix, stated, “Helix delivered another strong quarter as our Contracting Services segment continues to improve, with near full utilization of all three of our well intervention vessels and our two reeled pipelay vessels. In addition, utilization in our Robotics business continued to improve even as we added two new ROV units to the fleet. Our Oil and Gas business performed very well despite some production disruptions associated with pipeline issues and tropical storm activity. Helix generated healthy cash flow from operations during the quarter, and also paid down an additional $75 million of gross debt via the repurchase of a portion of our senior unsecured notes. I am pleased to announce that we are increasing our EBITDAX guidance for the remainder of 2011 given our current market visibility.”

* * * * *

Summary of Results

(in thousands, except per share amounts and percentages, unaudited)

	Quarter Ended									Nine Months Ended
	September 30						June 30			September 30
	2011			2010			2011			2011			2010
Revenues	$	372,496		$	392,669		$	338,319		$	1,002,422		$	893,501

Gross Profit (Loss):
Operating	$	126,200		$	87,891		$	130,858		$	334,480		$	191,241
		34	%		22	%		39	%		33	%		21	%
Oil and Gas Impairments (1)		(2,357	)		(897	)		(22,721	)		(25,078	)		(171,871	)

Exploration Expense (2)		(1,548	)		(442	)		(7,939	)		(9,833	)		(1,780	)
Total	$	122,295		$	86,552		$	100,198		$	299,569		$	17,590

Net Income (Loss) Applicable to Common Shareholders (3)	$	46,016		$	26,161		$	41,313		$	113,186		$	(77,281	)

Diluted Earnings (Loss) Per Share	$	0.43		$	0.25		$	0.39		$	1.06		$	(0.74	)

Adjusted EBITDAX (4)	$	178,002		$	142,175		$	175,840		$	503,061		$	334,119

Note: Footnotes listed at end of press release.

Segment Information, Operational and Financial Highlights

(in thousands, unaudited)

	Three Months Ended
	September 30,						June 30,
	2011			2010			2011
Revenues:
Contracting Services	$	229,967		$	238,531		$	171,353
Production Facilities		19,986			74,458			20,545
Oil and Gas		159,218			95,566			172,458
Intercompany Eliminations		(36,675	)		(15,886	)		(26,037	)
Total	$	372,496		$	392,669		$	338,319

Income (Loss) from Operations:
Contracting Services	$	47,363		$	31,015		$	30,565
Production Facilities		10,983			44,520			11,920
Oil and Gas		52,527			(3,206	)		73,724
Gain on Oil and Gas DerivativeCommodity Contracts		-			161			-
Oil and Gas Impairments (1)		(2,357	)		(897	)		(22,721	)
Exploration Expense (2)		(1,548	)		(442	)		(7,939	)
Corporate		(6,227	)		(10,767	)		(9,112	)
Intercompany Eliminations		(528	)		(286	)		(19	)
Total	$	100,213		$	60,098		$	76,418
Equity in Earnings of Equity Investments	$	4,906		$	6,221		$	5,887

Note: Footnotes listed at end of press release.

Contracting Services

Subsea Construction and Robotics revenues increased in the third quarter of 2011 compared to the second quarter of 2011 primarily due to increased utilization of the Express and Intrepid in the Gulf of Mexico, and increased ROV and trencher utilization in our Robotics business. Overall our utilization rate for our owned and chartered vessels increased to 86% in the third quarter of 2011 from 71% in the second quarter of 2011. ROV and trenching utilization increased to 67% in the third quarter of 2011 compared to 54% in the second quarter of 2011.

Well Intervention revenues increased in the third quarter of 2011 due primarily to increased utilization of our vessels in both the North Sea and the Gulf of Mexico. Vessel utilization in the North Sea increased to 98% in the third quarter of 2011 from 87% in the second quarter of 2011. Vessel utilization in the Gulf of Mexico increased to 100% in the third quarter of 2011 from 93% in the second quarter of 2011. On a combined basis, vessel utilization increased to 99% in the third quarter of 2011 compared to 89% in the second quarter of 2011.

Production Facilities

o	The Helix Producer I continued its deployment on the Phoenix field throughout the third quarter of 2011.

Oil and Gas

o	Oil and Gas revenues decreased in the third quarter of 2011 compared to the second quarter of 2011 due primarily to lower oil and gas production and slightly lower commodity prices. Production in the third quarter of 2011 totaled 11.7 Bcfe compared to 12.7 Bcfe in the second quarter of 2011.

The average price realized for oil, including the effects of settled oil hedge contracts, totaled $100.93 per barrel in the third quarter of 2011 compared to $101.43 per barrel in the second quarter of 2011. For natural gas and natural gas liquids, including the effect of settled natural gas hedge contracts, we realized $6.15 per thousand cubic feet of gas (Mcf) in the third quarter of 2011 compared to $6.17 per Mcf in the second quarter of 2011.

o	We recorded a charge of approximately $8.4 million to insurance expense in the third quarter of 2011 to reduce the value of our hurricane catastrophic bond to its intrinsic value at September 30, 2011. We will record a $2.0 million charge to insurance expense in the fourth quarter of 2011.

Our October 2011 oil and gas production rate has averaged approximately 128 million cubic feet of natural gas equivalent per day (MMcfe/d) through October 23, 2011, compared to an average of 127 MMcfe/d in the third quarter of 2011 and an average of 139 MMcfe/d in the second quarter of 2011. Production from the Phoenix field was impacted for a portion of July due to scheduled downtime of a third party pipeline servicing the field, and was impacted for a portion of August due to third party pipeline flow restrictions. September production was impacted by third party pipeline safety shutdowns associated with Tropical Storm Lee.

o	We currently have oil and gas hedge contracts in place totaling 6.6 Bcfe (0.7 million barrels of oil and 2.1 Bcf of gas) for the remainder of 2011 (October through December), 22.6 Bcfe (2.8 million barrels of oil and 6.0 Bcf of gas) in 2012 and 6.0 Bcfe (1.0 million barrels of oil) in 2013.

Other Expenses

o	Selling, general and administrative expenses were 5.9% of revenue in the third quarter of 2011, 7.0% in the second quarter of 2011 and 6.8% in the third quarter of 2010.

Net interest expense and other increased to $34.8 million in the third quarter of 2011 from $24.0 million in the second quarter of 2011, due primarily to foreign currency losses and losses associated with premiums paid upon repurchases of senior unsecured notes. Net interest expense decreased to $24.1 million in the third quarter of 2011 compared with $25.3 million in the second quarter of 2011, due primarily to our repurchase of $75.0 million of our senior unsecured notes during the third quarter. The decrease was partially offset by an acceleration of a portion of the deferred financing costs associated with the repurchase of our senior unsecured notes.

Financial Condition and Liquidity

We repurchased $75.0 million of our senior unsecured notes in the third quarter of 2011 at an average price of $103.14 ahead of the first optional call date in January 2012. The optional call price starting in January 2012 is $104.75. Since the beginning of 2011 we have repaid a total of $193 million in gross debt.

Consolidated net debt at September 30, 2011 decreased to $796 million from $833 million as of June 30, 2011. We had no outstanding borrowings under our revolver. Our total liquidity at September 30, 2011 was approximately $933 million, consisting of cash on hand of $375 million and revolver availability of $558 million. Net debt to book capitalization as of September 30, 2011 was 35%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation attached hereto.)

o	As of September 30, 2011, we were in compliance with the covenants and restrictions under our various loan agreements.

o	We incurred capital expenditures (including capitalized interest) totaling $65 million in the third quarter of 2011, compared to $75 million in the second quarter of 2011 and $31 million in the third quarter of 2010.

Footnotes to “Summary of Results”:

(1)

Third quarter 2011 oil and gas impairments of $2.4 million primarily related to revisions in cost estimates for reclamation activities ongoing at two of our Gulf of Mexico oil and gas properties. Second quarter 2011 oil and gas impairments of $22.7 million primarily associated with six of our Gulf of Mexico oil and gas properties and our only non-domestic (U.K.) oil and gas property. The impairment charges primarily reflect a premature end of these fields’ production lives either through actual depletion or as a result of capital allocation decisions affecting third party operated fields. Second quarter 2010 oil and gas impairments of $159.9 million related to reduction of the carrying values of certain Gulf of Mexico oil and gas properties due to reserve revisions. First quarter 2010 impairments on our U.S. oil and gas properties ($7.0 million) were due primarily to the deterioration of certain fields’ economics following a significant decrease in natural gas prices during the period. We also impaired our U.K. offshore property ($4.1 million) during the first quarter of 2010. The U.K. impairment was offset by a gain on the reacquisition of our 50% co-owner’s interest in the U.K. field.

(2)	Second quarter 2011 included $6.6 million of exploration costs associated with an offshore lease expiration.

(3)	First quarter 2010 included a payment of $17.5 million to settle litigation related to the termination of a 2007 international construction contract.

(4)	Non-GAAP measure. See reconciliation attached hereto.

Footnotes to “Segment Information, Operational and Financial Highlights”:

(1)

(2)	Second quarter 2011 included $6.6 million of exploration costs associated with an offshore lease expiration.

* * * * *

Conference Call Information

Further details are provided in the presentation for Helix’s quarterly conference call to review its third quarter 2011 results (see the “Investor Relations” page of Helix’s website, www.HelixESG.com). The call, scheduled for 9:00 a.m. Central Daylight Time on Tuesday, October 25, 2011, will be audio webcast live from the “Investor Relations” page of Helix’s website. Investors and other interested parties wishing to listen to the conference via telephone may join the call by dialing 800-734-8582 for persons in the United States and +1-212-231-2925 for international participants. The passcode is "Tripodo". A replay of the conference will be available under "Investor Relations" by selecting the "Audio Archives" link from the same page beginning approximately two hours after the completion of the conference call.

Helix Energy Solutions Group, 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.

Reconciliation of Non-GAAP Financial Measures

Management evaluates Company performance and financial condition using certain non-GAAP metrics, primarily Adjusted EBITDAX, net debt and net debt to book capitalization. We calculate Adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization and exploration expense. Net debt is calculated as the sum of financial debt less cash and equivalents on hand. Net debt to book capitalization is calculated by dividing net debt by the sum of net debt, convertible preferred stock and shareholders’ equity. 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.

Forward-Looking Statements

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 "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any projections of 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; 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 forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors including but not limited to the performance of contracts by suppliers, customers and partners; actions by governmental and regulatory authorities; operating hazards and delays; employee management issues; uncertainties inherent in the exploration for and development of oil and gas and in estimating reserves; complexities of global political and economic developments; geologic risks; volatility of oil and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including the Company's most recently filed Annual Report on Form 10-K and in the Company’s other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements except as required by the securities laws.

HELIX ENERGY SOLUTIONS GROUP, INC.

Comparative Condensed Consolidated Statements of Operations

						Three Months Ended Sep. 30,						Nine Months Ended Sep. 30,
	(in thousands, except per share data)					2011			2010			2011			2010
						(unaudited)						(unaudited)

	Net revenues:
	Contracting services					$	213,278		$	297,103		$	501,887		$	604,634
	Oil and gas						159,218			95,566			500,535			288,867
							372,496			392,669			1,002,422			893,501
	Cost of sales:
	Contracting services						147,614			211,634			371,042			438,008
	Oil and gas						100,230			93,586			306,733			266,032
	Oil and gas impairments						2,357			897			25,078			171,871
							250,201			306,117			702,853			875,911

	Gross profit						122,295			86,552			299,569			17,590
	Gain on oil and gas derivative commodity contracts						-			161			-			2,643
	Gain (loss) on sale of assets, net						-			13			(6	)		6,246
	Selling, general and administrative expenses						(22,082	)		(26,628	)		(70,821	)		(91,675	)
	Income (loss) from operations						100,213			60,098			228,742			(65,196	)
	Equity in earnings of equity investments						4,906			6,221			16,443			12,932
	Gain on subsidiary equity transaction						-			-			753			-
	Net interest expense and other						(34,828	)		(21,407	)		(81,182	)		(64,826	)
	Income (loss) before income taxes						70,291			44,912			164,756			(117,090	)
	Provision for (benefit of) income taxes						23,465			17,965			49,186			(41,962	)
	Net income (loss), including noncontrolling interests						46,826			26,947			115,570			(75,128	)
	Less: net income applicable to noncontrolling interests						(800	)		(776	)		(2,354	)		(2,049	)
	Net income (loss) applicable to Helix						46,026			26,171			113,216			(77,177	)
	Preferred stock dividends						(10	)		(10	)		(30	)		(104	)
	Net income (loss) applicable to Helix common shareholders					$	46,016		$	26,161		$	113,186		$	(77,281	)

	Weighted Avg. Common Shares Outstanding:
	Basic						104,700			104,090			104,616			103,772
	Diluted						105,154			105,307			105,061			103,772

	Earnings (Loss) Per Share of Common Stock:
	Basic					$	0.43		$	0.25		$	1.07		$	(0.74	)
	Diluted					$	0.43		$	0.25		$	1.06		$	(0.74	)



Comparative Condensed Consolidated Balance Sheets

ASSETS						LIABILITIES & SHAREHOLDERS' EQUITY
(in thousands)		Sep. 30, 2011		Dec. 31, 2010		(in thousands)						Sep. 30, 2011			Dec. 31, 2010
		(unaudited)										(unaudited)
Current Assets:						Current Liabilities:
	Cash and equivalents	$	375,355	$	391,085	Accounts payable						$	145,112		$	159,381
	Accounts receivable		250,036		226,704	Accrued liabilities							159,676			198,237
	Other current assets		123,236		123,065	Income taxes payable							3,856			-
						Current mat of L-T debt (1)							7,877			10,179
Total Current Assets			748,627		740,854	Total Current Liabilities							316,521			367,797


Net Property & Equipment:						Long-term debt (1)							1,163,914			1,347,753
	Contracting Services		1,466,219		1,452,837	Deferred income taxes							441,520			413,639
	Oil and Gas		1,007,534		1,074,243	Asset retirement obligations							169,429			170,410
Equity investments			186,423		187,031	Other long-term liabilities							4,844			5,777
Goodwill			62,344		62,494	Convertible preferred stock (1)							1,000			1,000
Other assets, net			80,862		74,561	Shareholders' equity (1)							1,454,781			1,285,644
Total Assets		$	3,552,009	$	3,592,020	Total Liabilities & Equity						$	3,552,009		$	3,592,020

(1)	Net debt to book capitalization - 35% at September 30, 2011. Calculated as total debt less cash and equivalents ($796,436)
	divided by sum of total net debt, convertible preferred stock and shareholders' equity ($2,252,217).

Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Nine Months Ended September 30, 2011


Earnings Release:

Reconciliation From Net Income to Adjusted EBITDAX:


		3Q11		3Q10			2Q11		2011			2010
	(in thousands)

Net income (loss) applicable to common shareholders	$	46,016	$	26,161		$	41,313	$	113,186		$	(77,281	)
Non-cash impairments		-		-			11,573		11,573			170,974
(Gain) loss on asset sales		-		(13	)		22		(747	)		(6,219	)
Preferred stock dividends		10		10			10		30			104
Income tax provision (benefit)		23,465		17,965			16,171		49,186			(41,964	)
Net interest expense and other		34,829		21,385			24,022		81,171			64,708
Depreciation and amortization		72,134		76,225			74,790		238,829			222,017
Exploration expense		1,548		442			7,939		9,833			1,780

Adjusted EBITDAX	$	178,002	$	142,175		$	175,840	$	503,061		$	334,119



We calculate adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization, and exploration
expense. 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.

exh992.htm

October 25, 2011

Third Quarter 2011 Conference Call

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” within the meaning of the Private Securities Litigation Reform Act of
1995, including, without limitation, any projections of financial items; projections of contracting services activity; future
production volumes, results of exploration, exploitation, development, acquisition and operations expenditures, and
prospective reserve levels of properties or wells; projections of utilization; any statements of the plans, strategies and
objectives of management for future operations; any statements concerning developments; and any statements of
assumptions underlying any of the foregoing. These statements involve certain assumptions we made based on our
experience and perception of historical trends, current conditions, expected future developments and other factors
we believe are reasonable and appropriate under the circumstances. The forward-looking statements are subject to
a number of known and unknown risks, uncertainties and other factors that could cause our actual results to differ
materially. The risks, uncertainties and assumptions referred to above include the performance of contracts by
suppliers, customers and partners; actions by governmental and regulatory authorities; operating hazards and
delays; employee management issues; local, national and worldwide economic conditions; uncertainties inherent in
the exploration for and development of oil and gas and in estimating reserves; complexities of global political and
economic developments; geologic risks, volatility of oil and gas prices and other risks described from time to time in
our reports filed with the Securities and Exchange Commission (“SEC”), including the Company’s most recently filed
Annual Report on Form 10-K and in the Company’s other filings with the SEC. Free copies of the reports can be
found at the SEC’s website, www.SEC.gov. 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.

References to quantities of oil or gas include amounts we believe will ultimately be produced, and may include
“proved reserves” and quantities of oil or gas that are not yet classified as “proved reserves” under SEC definitions.
Statements of oil and gas reserves are estimates based on assumptions and may be imprecise. Investors are urged
to consider closely the disclosure regarding reserves in our most recently filed Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q.

Presentation Outline

• Executive Summary

Summary of Q3 2011 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. 25)

• Questions & Answers

Welding and spooling pipe at Ingleside Spoolbase

Executive
Summary

Executive Summary

($ in millions, except per share data)

(A) See non-GAAP reconciliations on slides 26-27.

Executive Summary

• Q3 2011 EPS of $0.43 per diluted share driven by continuing strong results from the oil and gas
business and robust activity levels for the well intervention and robotics businesses

• Contracting Services

o 99% utilization in well intervention business

o Continued improvement in ROV and trenching utilization in the robotics business

o Significantly improved utilization in subsea construction with Express and Intrepid achieving 95%
utilization in the third quarter

• Oil and Gas

o Third quarter average production rate of 127 Mmcfe/d (69% oil)

§ July production impacted by scheduled downtime of third party pipeline servicing Phoenix
field (~10 days)

§ August production for Phoenix field impacted by third party pipeline flow restrictions
(~7 days)

§ September production impacted by third party pipeline safety shutdowns associated with
Tropical Storm Lee (~7 days)

o Production through October 23 averaged approximately 128 Mmcfe/d (~70% oil)

§ October production impacted by third party pipeline disruption affecting our Danny well in the
Bushwood field

Executive Summary

• Oil and Gas (continued)

o Oil and gas production totaled 11.7 Bcfe in Q3 2011 versus 12.7 Bcfe in Q2 2011 (year-to-date
production of 38.7 Bcfe)

§ Avg realized price for oil of $100.93 / bbl ($101.43 / bbl in Q2 2011), inclusive of hedges

§ Avg realized price for natural gas and natural gas liquids (NGLs) of $6.15 / Mcf ($6.17 / Mcf
in Q2 2011), inclusive of hedges

• Gas price realizations benefited from sales of natural gas liquids

• NGL production of 0.8 Bcfe in both Q3 2011 and Q2 2011

• Higher tax rate in Q3 (33%) due to higher portion of U.S. income

• Balance sheet continues to strengthen

o Repurchased $75 million of senior unsecured notes

o Cash decreased to $375 million at 9/30/2011 from $414 million at 6/30/2011 due to debt
repurchases

o Liquidity* decreased to $933 million at 9/30/2011 from $965 million at 6/30/2011 (debt
repurchases)

o Gross debt decreased to $1.17 billion at 9/30/2011 from $1.25 billion at 6/30/2011

o Net debt decreased to $796 million at 9/30/2011 from $833 million at 6/30/2011

*Liquidity as we define it is equal to cash and cash equivalents ($375 million), plus available capacity under our revolving credit facility ($558 million).

Operational

Highlights

($ in millions, except percentages)

(A) See non-GAAP reconciliation on slides 26-27. Amounts are prior to intercompany
eliminations.

Contracting Services

• 99% utilization in Well Ops

• 63% utilization in Subsea Construction due
to improved activity levels for Express and
Intrepid

• Caesar in shipyard for planned upgrades;
completed sea trials in mid-October and
transited to Mexico for accommodations
project

Helix Producer I deployed on Helix’s Phoenix field

in Green Canyon 237 (Gulf of Mexico)

($ in millions)

Equity in Earnings of Equity Investments

Contracting Services - Well Ops

GOM

• Q4000 worked for Shell and Anadarko on multiple projects
throughout the third quarter

• 100% utilization achieved in the third quarter

• Current backlog extends to Q4 2012 and is building into 2013

North Sea

• Seawell and Well Enhancer posted a combined 98%
utilization in the third quarter

• Strong outlook anticipated for both vessels for the rest of
2011; backlog building well into 2012

Asia Pacific

• Normand Clough working for Clough Helix JV on a day rate
construction project for COOEC offshore China

• Wellhead cutting system completed two wellhead removals in
Q3; scheduled to complete 10+ removals beginning in Q4
2012

Well Enhancer, operating in the North Sea, is the

world’s only monohull well intervention vessel

capable of deploying coiled tubing

Contracting Services - Robotics

• Strong chartered vessel utilization in all three
regions during the third quarter

• Secured a three year ROV contract with Technip
utilizing two newly acquired ROVs

• ROVDrill upgrades completed; initial project to
commence in the fourth quarter

• Awarded a 30 day wind farm trenching project
utilizing the Island Pioneer, Deep Cygnus, T750,
T600, and i-Trencher scheduled to commence in
December

• Expanding focus on renewable energy market
such as wind farm development

o New chartered vessel, Grand Canyon,
under construction with 2012 delivery

o Building new trencher, the T-1200, to be
paired with the Grand Canyon

Various components of the Grand Canyon’s hull

being fabricated and welded in Turkey

iTrencher being deployed in the North Sea

Contracting Services - Subsea Construction

• Express and Intrepid posted a combined 95% utilization in the
third quarter (excluding the Caesar)

• Express completed projects for Noble, Chevron and Newfield

• Intrepid completed projects for Noble and Chevron; deployed
to California on October 16

• Caesar remained in the shipyard all of Q3 undergoing planned
maintenance and upgrades; left the shipyard in mid-October to
perform accommodations work in Mexico’s Bay of Campeche

Intrepid performed pipelay and saturation

diving operations in the Gulf of Mexico

during the third quarter

Helix Fast Response System (HFRS)

• Utilizes vessels and subsea
systems proven in Gulf of
Mexico spill response and
containment efforts

• Capability to capture and
process up to 55,000 bpd in
water depths to 10,000 feet at
15,000 psi

• 24 independent E&P operators
have signed on to include HFRS
in drilling permit applications

• Cited as spill response and
containment plan in 38
approved deepwater permits to
date

Contracting Services Utilization

• Express

• Caesar (1)

• Island Pioneer (2)

• Deep Cygnus (2)

• Normand Clipper (2)

• Olympic Triton (2)

• Well Enhancer

• Q4000

• 2 ROVDrill Units

• 3 Trenchers

(1) Vessel in shipyard during third quarter undergoing planned maintenance and upgrades. Completed upgrades and sea trials

on October 13. Caesar transited to Mexico to begin accommodations project in Mexico’s Bay of Campeche.

(2) Chartered vessels.

(A) Including effect of settled hedges
and mark-to-market derivative
contracts.

Oil & Gas

(A) Included accretion expense. Q2 2011 DD&A rate positively affected (approximately $9.2 million) due primarily to increased proved reserves at our Phoenix field
as a result of better than expected production rates (net of adjustments in other fields).

(B) Excluded exploration expense, net hurricane-related costs (reimbursements) and abandonment costs. Included $8.4 and $9.4 million related to a weather
derivative contract (catastrophic bond) for the quarters ended September 30, 2011 and September 30, 2010, respectively.

Operating Costs ($ in millions, except per Mcfe data)

Summary of Oct 2011 - Dec 2013 Hedging Positions *

* As of October 23, 2011.

Key Balance
Sheet Metrics

Debt and Liquidity Profile

Liquidity of approximately $933 million at 9/30/2011

(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 ($375 million), plus available
capacity under our revolving credit facility ($558 million).

2011 Outlook

We expect to continue to improve our liquidity position in 2011.

Broad Metrics	2011 Forecast (revised)	2011 Forecast (original)	2010 Actual
Oil and Gas Production	50 Bcfe	49 Bcfe	47 Bcfe
EBITDAX	$625+ million	$475 million	$430 million
CAPEX	$275 million	$225 million	$179 million

Commodity Price Deck		2011 Forecast (revised)	2011 Forecast (original)	2010 Actual
Hedged	Oil	$95.89 / bbl	$87.11 / bbl	$75.27 / bbl
Hedged	Gas	$5.82/ mcf	$4.80/ mcf	$6.01 / mcf

2011 Outlook

• Contracting Services

o Strong backlog for the Q4000, Well Enhancer and Seawell in 2011 and building well into
2012

o Well Enhancer to work in West Africa this winter

o Intrepid deployed to California performing field development projects through early 2012

o Express working through a full backlog for the remainder of 2011 and is scheduled to work
in the North Sea in the second half of 2012

o Caesar deployed to Mexico’s Bay of Campeche in mid-October for accommodations project

o Continued focus on trenching and cable burial business with non-oilfield projects growing

o Five vessels scheduled for regulatory drydocks in 2012; will provide some headwind next
year

• Production Facilities

o HP I continues production at Phoenix field

• Oil and Gas

o Forecasted 2011 overall production of 50 Bcfe

§ 67% oil and 64% deepwater

§ Assumes no further significant storm disruptions

2011 Outlook

• Capital Expenditures

o Contracting Services ($110 million)

§ Continued incremental investment in robotics business, with a focus on adding
trenching spread capacity

§ Seeking to deploy capital in well intervention business

§ Caesar thruster upgrade completion

o Oil and Gas ($165 million)

§ Focus capital investment on oil development with relatively fast payback

§ Two major planned well projects in the 2nd half of the year

§ Nancy (completion) - commenced in Q3

§ Kathleen (development drill) - expected to commence in Q4/ Q1 2012

§ Shelf platform construction and opportunistic workovers

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. 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.

Revenue and Gross Profit As Reported ($ in millions)

Non-GAAP Reconciliations