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): February 22, 2012

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 February 22, 2012, Helix Energy Solutions Group, Inc. (“Helix”) issued a press release announcing its fourth quarter and year-end results of operation for the period ended December 31, 2011. Attached hereto as Exhibit 99.1, and incorporated by reference herein, is the press release.

Item 7.01 Regulation FD Disclosure.

On February 22, 2012, Helix issued a press release announcing its fourth quarter and year-end results of operation for the period ended December 31, 2011. In addition, on February 23, 2012, 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 Fourth Quarter Earnings Conference Call Presentation issued by Helix. The presentation materials will also be posted beginning on February 23, 2012 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 February 22, 2012 reporting financial results for the fourth quarter of 2011 and for the year ending December 31, 2011.

99.2	Fourth Quarter 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: February 22, 2012

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 February 22, 2012 reporting financial results for the fourth quarter of 2011 and for the year ending December 31, 2011.

99.2	Fourth Quarter Earnings 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 12-003

Date: February 22, 2012 Contact: Terrence Jamerson

Director, Finance & Investor Relations

Helix Reports Fourth Quarter and Full Year 2011 Results

HOUSTON, TX – Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $16.8 million, or $0.16 per diluted share, for the fourth quarter of 2011 compared with a net loss of $49.8 million, or $(0.48) per diluted share, for the same period in 2010, and net income of $46.0 million, or $0.43 per diluted share, in the third quarter of 2011. Net income for the year ended December 31, 2011 was $129.9 million, or $1.22 per diluted share, compared with a net loss of $127.1 million, or $(1.22) per diluted share, for the year ended December 31, 2010.

Fourth quarter 2011 results included the following items:

·	Impairment charges totaling $107.5 million ($69.9 million after-tax) primarily associated with a reduction in carrying values of certain U.S. oil and gas properties and increases in U.S. and U.K. asset retirement obligations

·	Tax benefit of $31.3 million related to a reorganization of our Australian subsidiaries, offset by impairment charges of $17.1 million associated with the reduction in the fair value of certain Australian assets ($14.2 million after-tax)

·	Gain on sale of an oil and gas property of $4.5 million ($2.9 million after-tax)

The net impact of these items in the fourth quarter, after income taxes, was $(0.50) per diluted share.

Fourth quarter 2011 highlights included:

·	Cash increased by $171 million during the quarter after paying down an additional $18 million in debt, ending the year at $546 million

·	Net debt in the quarter decreased by $187 million for a total net debt decrease in 2011 of $358 million

·	Oil and gas production totaled 2.24 million barrels of oil equivalent, or MMboe (13.4 billion cubic feet equivalent, or Bcfe) in Q4 2011 versus 1.95 MMboe (11.7 Bcfe) in Q3 2011

·	Year-end proved reserve estimates totaled 38.9 MMboe (233.2 Bcfe), 58% of estimated reserves are oil, with a SEC price case PV-10 value of $1.5 billion.

·	Total estimated proved and probable reserves as of December 31, 2011 were 58.8 MMBoe (352.9 Bcfe).

·	Sold “Wideberth” gas property for $31 million (5.3 Bcfe of proved reserves)

Owen Kratz, President and Chief Executive Officer of Helix, stated, “when filtering out the impairments, much of which were associated with declining economics on our natural gas properties, Helix booked another strong operational quarter and generated a relatively significant amount of free cash flow.”

* * * * *

Summary of Results

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

	Quarter Ended									Twelve Months Ended
	December 31						September 30			December 31
	2011			2010			2011			2011			2010
Revenues	$	396,185		$	306,337		$	372,496		$	1,398,607		$	1,199,838

Gross Profit (Loss):
Operating	$	139,629		$	31,790		$	126,200		$	474,109		$	223,031
		35	%		10	%		34	%		34	%		19	%
Oil and Gas Impairments (1), (2)		(107,525	)		(9,212	)		(2,357	)		(132,603	)		(181,083	)

Exploration Expense (3)		(1,081	)		(6,496	)		(1,548	)		(10,914	)		(8,276	)
Total	$	31,023		$	16,082		$	122,295		$	330,592		$	33,672

Net Income (Loss) Applicable to Common Shareholders (4)	$	16,753		$	(49,821	)	$	46,016		$	129,939		$	(127,102	)

Diluted Earnings (Loss) Per Share	$	0.16		$	(0.48	)	$	0.43		$	1.22		$	(1.22	)

Adjusted EBITDAX (5)	$	165,601		$	96,207		$	178,002		$	668,662		$	430,326

Note: Footnotes listed at end of press release.

Fourth quarter 2010 results included the following items on a pre-tax basis:

·	Non-cash impairment charge of $16.7 million to write off the carrying value of goodwill and a $7.1 million deferred tax asset valuation allowance attributable to our Southeast Asia well operations subsidiary

·	Impairment charges totaling $9.2 million primarily associated with a reduction in carrying values of certain oil and gas properties and $6.4 million related to expiring offshore leases

·	Loss of $21.4 million associated with the Lufeng contract offshore China related to weather, downhole and mechanical issues.

The net impact of these items in the fourth quarter of 2010, after income taxes, was $(0.54) per diluted share.

Segment Information, Operational and Financial Highlights

(in thousands, unaudited)

	Three Months Ended
	December 31,						September 30,
	2011			2010			2011
Revenues:
Contracting Services	$	205,378		$	185,291		$	229,967
Production Facilities		19,359			20,131			19,986
Oil and Gas		196,072			136,502			159,218
Intercompany Eliminations		(24,624	)		(35,587	)		(36,675	)
Total	$	396,185		$	306,337		$	372,496

Income (Loss) from Operations:
Contracting Services	$	25,819		$	(8,148	)	$	47,363
Goodwill Impairment		-			(16,743	)		-
Production Facilities		9,545			6,403			10,983
Oil and Gas		93,616			17,048			52,527
Gain on Oil and Gas DerivativeCommodity Contracts		-			(1,555	)		-
Oil and Gas Impairments (1)		(107,525	)		(9,212	)		(2,357	)
Exploration Expense (2)		(1,081	)		(6,496	)		(1,548	)
Corporate		(14,138	)		(10,367	)		(6,227	)
Intercompany Eliminations		550			(390	)		(528	)
Total	$	6,786		$	(29,460	)	$	100,213
Equity in Earnings of Equity Investments	$	5,772		$	6,537		$	4,906

Note: Footnotes listed at end of press release.

Contracting Services

Subsea Construction and Robotics revenues decreased in the fourth quarter of 2011 compared to the third quarter of 2011 primarily due to decreased utilization of our mobile pipelay equipment and lower activity levels at our onshore spoolbase facility. Overall our utilization rate for our owned and chartered vessels increased to 91% in the fourth quarter of 2011 from 86% in the third quarter of 2011. ROV and trenching utilization increased to 69% in the fourth quarter of 2011 compared to 67% in the third quarter of 2011.

Well Intervention revenues decreased in the fourth quarter of 2011 due primarily to lower day rate work performed in the North Sea coupled with the mobilization of the Well Enhancer to West Africa. Vessel utilization in the North Sea decreased to 96% in the fourth quarter of 2011 from 98% in the third quarter of 2011. Vessel utilization in the Gulf of Mexico (Q4000) was 100% in the fourth quarter of 2011. On a combined basis, vessel utilization decreased slightly to 98% in the fourth quarter of 2011 compared to 99% in the third quarter of 2011.

Production Facilities

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

Oil and Gas

o	Oil and Gas revenues increased in the fourth quarter of 2011 compared to the third quarter of 2011 due primarily to slightly higher oil and gas production and higher oil prices. Production in the fourth quarter of 2011 totaled 2.24 MMboe compared to 1.95 MMboe in the third quarter of 2011.

The average price realized for oil, including the effects of settled oil hedge contracts, totaled $110.75 per barrel in the fourth quarter of 2011 compared to $100.93 per barrel in the third quarter of 2011. For natural gas and natural gas liquids, including the effect of settled natural gas hedge contracts, we realized $6.16 per thousand cubic feet of gas (Mcf) in the fourth quarter of 2011 compared to $6.15 per Mcf in the third quarter of 2011.

o	Oil and gas production has averaged approximately 24 thousand barrels of oil equivalent per day (Mboe/d) year-to-date through February 21, 2012, compared to an average of 24 Mboe/d in the fourth quarter of 2011.

o	We currently have oil and gas hedge contracts in place totaling 4.6 MMBoe (2.8 million barrels of oil and 11.0 Bcf of gas) in 2012 and 2.1 MMBoe (1.1 million barrels of oil and 6.0 Bcf of gas) in 2013.

Other Expenses

o	Selling, general and administrative expenses were 7.3% of revenue in the fourth quarter of 2011, 5.9% in the third quarter of 2011 and 9.9% in the fourth quarter of 2010.

Net interest expense and other decreased to $18.8 million in the fourth quarter of 2011 from $34.8 million in the third quarter of 2011, due primarily to foreign currency gains in the fourth quarter compared to foreign exchange losses and losses associated with premiums paid upon repurchases of senior unsecured notes in the third quarter. Net interest expense decreased to $22.2 million in the fourth quarter of 2011 compared with $24.1 million in the third quarter of 2011, due primarily to our repurchase of $75.0 million of our senior unsecured notes during the third quarter.

Financial Condition and Liquidity

o	We repaid $18.0 million of our Term Loan from proceeds of the sale of an oil and gas property. Since the beginning of 2011 we have repaid $212 million of debt.

Consolidated net debt at December 31, 2011 decreased to $609 million from $796 million as of September 30, 2011. We had no outstanding borrowings under our revolver as of December 31, 2011. Our total liquidity at December 31, 2011 was approximately $1.1 billion, consisting of cash on hand of $546 million and revolver availability of $559 million. Net debt to book capitalization as of December, 2011 was 30%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation attached hereto.)

On February 21, 2012, we amended our senior credit agreement to allow for an additional $100 million of borrowings under a new term loan committed by a syndicate of banks. Terms and conditions of the new term loan (which is expected to fund in March) are the same as those contained in our revolving credit facility. Proceeds from the term loan together with $100 million of existing liquidity will be used to repay $200 million in principal amount of our senior unsecured notes in late March.

We incurred capital expenditures (including capitalized interest) totaling $46 million in the fourth quarter of 2011, compared to $65 million in the third quarter of 2011 and $33 million in the fourth quarter of 2010. For the years ended December 31, 2011 and 2010, capital expenditures incurred totaled $229 million and $179 million, respectively.

Footnotes to “Summary of Results”:

(1)

Fourth quarter 2011 oil and gas impairments of $107.5 million were primarily related to a reduction in carrying value of certain oil and gas properties and increases in asset retirement obligations. Fourth quarter 2010 oil and gas impairments of $9.2 million were primarily related to a reduction in carrying value of certain oil and gas properties.

(2)

Full year 2011 impairments were comprised of the impairments described in item (1) above, $22.7 million in the second quarter of 2011 primarily associated with six of our Gulf of Mexico oil and gas properties and our only non-domestic (U.K.) oil and gas property, and $2.4 million in the third quarter of 2011 primarily related to revisions in cost estimates for reclamation activities ongoing at two of our Gulf of Mexico oil and gas properties. Full year 2010 impairments were comprised of the impairments described in item (1) above, $7.0 million in the first quarter of 2010 primarily resulting from a decline in natural gas prices, $4.1 million in the first quarter of 2010 for our non-domestic oil and gas property, $159.9 million in the second quarter of 2010 resulting from a significant reduction in our estimates of proved reserves, and $0.9 million in the third quarter of 2010 associated with a revised estimated asset reclamation obligation of one non-producing field.

(3)	Fourth quarter 2011 included $0.7 million of exploration costs associated with offshore lease expirations. Fourth quarter 2010 included $6.4 million of exploration costs associated with an offshore lease expiration.

(4)	Twelve months ended December 31, 2010 included a payment of $17.5 million to settle litigation related to the termination of a 2007 international construction contract.

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

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

(1)

(2)	Fourth quarter 2011 included $0.7 million of exploration costs associated with offshore lease expirations. Fourth quarter 2010 included $6.4 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 fourth quarter 2011 results (see the “Investor Relations” page of Helix’s website, www.HelixESG.com). The call, scheduled for 9:00 a.m. Central Standard Time on Thursday, February 23, 2012, 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 888-633-8407 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 Dec. 31,						Twelve Months Ended Dec. 31,
	(in thousands, except per share data)	2011			2010			2011			2010
		(unaudited)						(unaudited)
	Net revenues:
	Contracting services	$	200,113		$	169,835		$	702,000		$	774,469
	Oil and gas		196,072			136,502			696,607			425,369
			396,185			306,337			1,398,607			1,199,838
	Cost of sales:
	Contracting services		157,333			162,075			528,375			600,083
	Oil and gas		99,223			112,472			396,123			376,724
	Oil and gas property impairments		107,525			9,212			132,603			181,083
	Exploration expense		1,081			6,496			10,914			8,276
			365,162			290,255			1,068,015			1,166,166

	Gross profit		31,023			16,082			330,592			33,672
	Goodwill impairment		-			(16,743	)		-			(16,743	)
	Gain on oil and gas derivative commodity contracts		-			(1,555	)		-			1,088
	Gain on sale of assets, net		4,531			3,159			4,525			9,405
	Selling, general and administrative expenses		(28,768	)		(30,403	)		(99,589	)		(122,078	)
	Income (loss) from operations		6,786			(29,460	)		235,528			(94,656	)
	Equity in earnings of investments		5,772			6,537			22,215			19,469
	Other than temporary loss on equity investments		(10,563	)		(2,240	)		(10,563	)		(2,240	)
	Gain on subsidiary equity transaction		-			-			753			-
	Net interest expense and other		(18,771	)		(21,498	)		(99,953	)		(86,324	)
	Income (loss) before income taxes		(16,776	)		(46,661	)		147,980			(163,751	)
	Provision for (benefit of) income taxes		(34,283	)		2,364			14,903			(39,598	)
	Net income (loss), including noncontrolling interests		17,507			(49,025	)		133,077			(124,153	)
	Net income applicable to noncontrolling interests		(744	)		(786	)		(3,098	)		(2,835	)
	Net income (loss) applicable to Helix		16,763			(49,811	)		129,979			(126,988	)
	Preferred stock dividends		(10	)		(10	)		(40	)		(114	)
	Net income (loss) applicable to Helix common shareholders	$	16,753		$	(49,821	)	$	129,939		$	(127,102	)

	Weighted Avg. Common Shares Outstanding:
	Basic		104,267			104,111			104,528			103,857
	Diluted		104,697			104,111			104,953			103,857

	Earnings (Loss) Per Share of Common Stock:
	Basic	$	0.16		$	(0.48	)	$	1.23		$	(1.22	)
	Diluted	$	0.16		$	(0.48	)	$	1.22		$	(1.22	)

Comparative Condensed Consolidated Balance Sheets

ASSETS						LIABILITIES & SHAREHOLDERS' EQUITY
(in thousands)		Dec. 30, 2011		Dec. 31, 2010		(in thousands)	Dec. 30, 2011		Dec. 31, 2010
		(unaudited)					(unaudited)
Current Assets:						Current Liabilities:
	Cash and equivalents	$	546,465	$	391,085	Accounts payable	$	147,043	$	159,381
	Accounts receivable		276,156		226,704	Accrued liabilities		239,963		198,237
	Other current assets		121,621		123,065	Income taxes payable		1,293		-
						Current mat of L-T debt (1)		7,877		10,179
Total Current Assets			944,242		740,854	Total Current Liabilities		396,176		367,797

Net Property & Equipment:						Long-term debt (1)		1,147,444		1,347,753
	Contracting Services		1,459,665		1,452,837	Deferred income taxes		417,610		413,639
	Oil and Gas		871,662		1,074,243	Asset retirement obligations		161,208		170,410
Equity investments			175,656		187,031	Other long-term liabilities		9,368		5,777
Goodwill			62,215		62,494	Convertible preferred stock (1)		1,000		1,000
Other assets, net			68,907		74,561	Shareholders' equity (1)		1,449,541		1,285,644
Total Assets		$	3,582,347	$	3,592,020	Total Liabilities & Equity	$	3,582,347	$	3,592,020

(1)	Net debt to book capitalization - 30% at December 31, 2011. Calculated as total debt less cash and equivalents ($608,856)
	divided by sum of total net debt, convertible preferred stock and shareholders' equity ($2,059,397).

Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Twelve Months Ended December 31, 2011


Earnings Release:

Reconciliation From Net Income to Adjusted EBITDAX:


		4Q11	4Q10	3Q11	2011	2010
		(in thousands)

Net income (loss) applicable to common shareholders		$ 16,753	$ (49,821)	$ 46,016	$ 129,939	$ (127,102)
Non-cash impairments		96,477	24,686	-	108,050	195,660
Gain on asset sales		(4,531)	(3,159)	-	(5,278)	(9,378)
Preferred stock dividends		10	10	10	40	114
Income tax provision (benefit)		(34,283)	2,364	23,465	14,903	(39,600)
Net interest expense and other		18,771	21,484	34,829	99,942	86,192
Depreciation and amortization		71,323	94,147	72,134	310,152	316,164
Exploration expense		1,081	6,496	1,548	10,914	8,276

Adjusted EBITDAX		$ 165,601	$ 96,207	$ 178,002	$ 668,662	$ 430,326



	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.

Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three Months Ended December 31, 2011


Earnings Release:

Reconciliation of significant items:


			4Q11			4Q10
			(in thousands, except earnings per share data)
Property impairments and other charges:
	Oil and gas impairment charges	$	107,525		$	9,212
	Australia impairment charges		17,127			-
	Gain on sale of oil and gas property		(4,531	)		-
	Goodwill impairment		-			16,743
	Expiring offshore leases		-			6,394
	Lufeng loss		-			21,431
	Tax (benefit) provision associated with above		(36,048	)		2,755
	Tax benefit associated with our Australian entity reorganization		(31,335	)		-
Property impairments and other charges, net:		$	52,738		$	56,535

Diluted shares			104,697			104,111
Net after income tax effect per share		$	0.50		$	0.54

exh992.htm

February 23, 2012

Fourth 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 Q4 2011 Results (pg. 4)

• Operational Highlights by Segment

Contracting Services (pg. 9)

Oil & Gas (pg. 15)

• Key Balance Sheet Metrics (pg. 20)

• 2012 Outlook (pg. 22)

• Non-GAAP Reconciliations (pg. 27)

• Questions & Answers

Express installing suction piles in the Walker Ridge
block of the Gulf of Mexico

Executive
Summary

Executive Summary

($ in millions, except per share data)

(A) Included a $16.7 million non-cash charge to write off goodwill associated with our Southeast Asia well operations subsidiary in fourth quarter 2010.

(B) Included a $7.1 million deferred tax asset valuation allowance associated with our Southeast Asia well operations subsidiary in fourth quarter 2010.

(C) Included a $17.5 million ($11.5 million after income taxes) charge related to settlement of litigation regarding a 2007 international construction contract in first quarter 2010 as well as a $7.1
million deferred tax asset valuation allowance associated with our Southeast Asia well operations subsidiary in fourth quarter 2010.

(D) See non-GAAP reconciliations on slides 28-29.

Executive Summary

• Q4 2011 EPS of $0.16 per diluted share

o Impairment charges totaling $107.5 million ($69.9 million after-tax) primarily associated with a
reduction in carrying values of certain U.S. oil and gas properties and increases in U.S. and U.K.
asset retirement obligations

o Tax benefit of $31.3 million related to a reorganization of our Australian subsidiaries, offset by
impairment charges of $17.1 million associated with the reduction in the fair value of certain
Australian assets ($14.2 million after-tax)

o Gain on sale of an oil and gas property of $4.5 million ($2.9 million after-tax)

o Above three items totaled $120.1 million pre-tax ($52.7 million after-tax), or an impact of $(0.50)
per share

• Contracting Services

o 98% utilization in well intervention business

o Improved utilization in subsea construction with Express and Intrepid achieving 100% utilization
in the fourth quarter

• Oil and Gas

o Fourth quarter average production rate of 24 Mboe/d or 146 MMcfe/d (67% oil)

o Production year-to-date through February 21 averaged approximately 24 Mboe/d (~68% oil)

Executive Summary

• Oil and Gas (continued)

o Oil and gas production totaled 2.24 MMboe (13.4 Bcfe) in Q4 2011 versus 1.95 MMboe (11.7
Bcfe) in Q3 2011 (year-to-date production of 8.7 MMboe / 52.2 Bcfe)

§ Avg realized price for oil of $110.75 / bbl ($100.93 / bbl in Q3 2011), inclusive of hedges

§ Avg realized price for natural gas and natural gas liquids (NGLs) of $6.16 / Mcf ($6.15 / Mcf
in Q3 2011), inclusive of hedges

• Gas price realizations benefited from sales of natural gas liquids

• NGL production of 0.22 MMboe (1.3 Bcfe) Q4 2011 and 0.14 MMboe (0.8 Bcfe) in
Q3 2011

• Balance sheet continues to strengthen

o Repaid $18 million of Term Loan from proceeds of sale of an oil and gas property

o Cash increased to $546 million at 12/31/2011 from $375 million at 9/30/2011

o Liquidity* increased to $1.1 billion at 12/31/2011 from $933 million at 9/30/2011

o Gross debt decreased to $1.16 billion at 12/31/2011 from $1.17 billion at 9/30/2011

o Net debt decreased to $609 million at 12/31/2011 from $796 million at 9/30/2011

*Liquidity as we define it is equal to cash and cash equivalents ($546 million), plus available capacity under our revolving credit facility ($559 million).

Operational

Highlights

($ in millions, except percentages)

(A) See non-GAAP reconciliation on slides 28-29. Amounts are prior to intercompany
eliminations.

(B) Before gross profit impact of $6.6 million asset impairment charges in Australia.

Contracting Services

• 98% utilization in Well Ops

• 87% utilization in Subsea
Construction due to improved
utilization for the Caesar on
accommodations project in Mexico

• 93% chartered vessel utilization in
Robotics due to continued strength
in trenching in the North Sea

Helix Producer I deployed on Helix’s Phoenix field

in Green Canyon 237 (Gulf of Mexico)

($ in millions)

Earnings in Equity Investments

Contracting Services - Well Ops

GOM

• Q4000 worked for Shell and Anadarko on multiple projects
throughout Q4

• 100% utilization achieved in Q4

• Current backlog extends into 2013

North Sea

• Seawell and Well Enhancer posted a combined 96%
utilization in Q4

• Strong outlook anticipated for both vessels in 2012

Asia Pacific

• Normand Clough completed a day rate construction
project for COOEC offshore China for SapuraCrest Helix
JV

• 70 day Normand Clough expected work in Malaysia
commencing in Q2

• Wellhead cutting system completed four wellhead
removals in Q4 2011 with eight scheduled in Q1 and three
in Q2

Well Enhancer, operating in the North Sea, is the

world’s only monohull well intervention vessel

capable of deploying coiled tubing

Contracting Services - Robotics

• 93% chartered vessel utilization and 92% trencher
utilization

• ROV and trencher utilization up in the Gulf of
Mexico and North Sea

• Completed first ROVDrill project in the North Sea:
successfully completed 29 sites consisting of bore
holes and cone penetrometer testing (CPTs) to 40
meters through multiple subsea soil and bedrock
formations.

• Generated $17 million wind farm trenching
revenues during Q4 (approximately $42 million in
2011) utilizing the Island Pioneer and Deep
Cygnus vessels, and T600, T750 and iTrencher
trenchers

• Grand Canyon vessel and T1200 trencher
construction on target for delivery in Q2 2012, to
initially be paired for renewable energy market
contracts

Grand Canyon being prepared for transit from Turkey

to Norway for completion and mid-2Q12 delivery.

Contracting Services - Subsea Construction

• Express and Intrepid were 100% utilized during Q4
(excluding the Caesar)

• Express worked on projects for Chevron, Apache and
Newfield

• Intrepid was deployed to California in October. Expected to
arrive back in the Gulf of Mexico in late Q1

• Caesar completed shipyard upgrades in mid-October and
currently on accommodations project in Mexico’s Bay of
Campeche with work extended to April 30

Intrepid performed pipelay and saturation

diving operations off the California coast
during the fourth quarter.

• Express

• Caesar (1)

• Island Pioneer (2)

• Deep Cygnus (2)

• Olympic Triton (2)

• Normand Clipper, Stril Explorer (2)

• Well Enhancer

• Q4000

• 2 ROVDrill Units

• 3 Trenchers

(1) Completed upgrades and sea trials on October 13. Caesar deployed to Mexico on accommodations project in Bay of Campeche.

(2) Chartered vessels.

Contracting Services Utilization

(A) Fourth quarter 2011 impairments
primarily associated with the
reduction in carrying values of
certain oil and gas properties
due to year-end revisions in
reserves. Further, fourth quarter
2011 impacted by increased
asset retirement obligations for
U.S. and U.K. end of life
properties.

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

Oil & Gas

(A) Included accretion expense. Q4 2011 DD&A rate positively affected by 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, hurricane-related repairs and abandonment cost.

(C) Included $2.0, $2.3, and $8.4 million related to a weather derivative contract for the quarters ended December 2011, December 2010 and September 2011
respectively.

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

Oil & Gas - Total Proved and Probable Reserves

	Oil Mbbls	Gas MMcf	Total Mboe
Total estimated proved reserves at 12/31/2010	24,818	227,264	62,695
Revision of previous oil and gas estimates	3,475	(108,947)	(14,683)
Production	(5,785)	(17,458)	(8,694)
Sales of reserves in place	(205)	(4,109)	(890)
Extensions and discoveries	386	271	431
Total estimated proved reserves at 12/31/2011	22,689	97,021	38,860
Total estimated probable reserves at 12/31/2011 (risked)	4,072	95,273	19,951
Total estimated proved and probable reserves at 12/31/2011	26,761	192,294	58,811

• 87 Bcf of Bushwood proved gas reserves reclassified to probable reserves.

• SEC PV-10 case increased from $1.3 billion at December 31, 2010 to $1.5 billion at December 31, 2011 primarily due to the increase in oil prices.

Oil & Gas - Reserve Report Highlights

	Proved Developed	Proved Undeveloped	Total
Total Estimated Reserves (MMboe)	23	16	39
Shelf	13	9	22
Deepwater	10	7	17
Oil (MMbbls)	13	10	23
Gas (Bcf)	60	37	97
SEC Case PV-10 (A) (pre-tax, in millions)	$ 964	$ 508	$ 1,472
PV-10 Forward Strip Price (A), (B) (pre-tax, in millions)	$ 949	$ 503	$ 1,452

At December 31, 2011

(A) PV-10 of oil and gas of approximately $1.3 billion and $0.2 billion, respectively (both under SEC-case and Forward Strip Price case).

(B) Based on NYMEX Henry Hub gas and WTI oil forward strip prices at December 31, 2011.

Summary of Jan 2012 - Dec 2013 Hedging Positions *

* As of February 22, 2012

Key Balance
Sheet Metrics

Debt and Liquidity Profile

Liquidity of approximately $1.1 billion at 12/31/2011

(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 ($546 million), plus available
capacity under our revolving credit facility ($559 million).

2012 Outlook

Broad Metrics	2012 Forecast	2011 Actual
Oil and Gas Production	7.5 MMboe	8.7 MMboe
EBITDAX	~$600 million	$669 million
CAPEX	~$445 million	$229 million

Commodity Price Deck		2012 Forecast	2011 Actual
Hedged	Oil	$104.80 / Bbl	$100.91 / Bbl
Hedged	Gas	$4.56 / Mcf	$6.04 / Mcf

2012 Outlook

• Contracting Services

o Strong backlog for the Q4000, Well Enhancer and Seawell through 2012

§ Q4000 building backlog into 2013

o Well Enhancer working in West Africa and transits back to the North Sea late first quarter

o Intrepid deployed to California performing field development projects and expected to arrive
back in the Gulf of Mexico end of Q1

o Express working through a full backlog in Gulf of Mexico for Q1 and is scheduled to work in the
Mediterranean and North Sea in Q2 and Q3 of 2012 before returning back to the Gulf of Mexico

o Caesar deployed to Mexico’s Bay of Campeche for accommodations project through April

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

o Continued recovery anticipated in global Robotics market, particularly in the Gulf of Mexico

o Four vessels scheduled for regulatory drydocks in 2012, approximately $25 million impact on
EBITDA

§ Intrepid - April

§ Q4000 - March

§ Seawell - April

§ Well Enhancer - August

2012 Outlook

• Oil and Gas

o Forecasted 2012 overall production of 7.5 MMboe, including Wang (Phoenix field) and Danny 2
(Bushwood field) exploration wells

§ Assumes Wang production commences Q4

§ Assumes Danny 2 production commences mid-year

o Approximately 90% of 2012 revenues from oil and NGLs

o Anticipated 67% of production volume is oil and 64% of total production from deepwater

o 61% hedged for the year (76% of estimated PDP production)

o Assumes no significant storm disruptions

• Balance Sheet

o Amended credit agreement to allow for new $100 million term loan expected to fund late March

o Terms and conditions same as revolving credit facility

o Proceeds from new term loan together with $100 million of existing liquidity will be used to repay
$200 million in principal of senior unsecured notes in late March

2012 Outlook - Capex

• Capital Expenditures

o Contracting Services ($250 million)

§ Announced new build semi submersible intervention vessel (approximately $130 million of
capex in 2012)

§ Regulatory dry docks for four vessels

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

o Oil and Gas ($195 million)

§ Focus capital investment on shelf oil developments/opportunistic workovers with relatively
fast payback

§ Two major deepwater well projects planned this year

§ Danny 2 - 1H activity

§ Wang - 2H activity

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