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Third Quarter 2009
Earnings Conference Call
Earnings Conference Call
October 29, 2009
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This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are statements that could be deemed “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other financial items; future production volumes, results of
exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of
property or wells; any statements of the plans, strategies and objectives of management for future operations; any
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are statements that could be deemed “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other financial items; future production volumes, results of
exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of
property or wells; any statements of the plans, strategies and objectives of management for future operations; any
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC,
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
Forward-Looking Statements
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Summary of Q3 2009 Results (pg. 4)
2009 Outlook (pg. 7)
Liquidity and Capital Resources (pg. 10)
• Operational Highlights by Segment
Contracting Services (pg. 16)
Oil & Gas (pg. 24)
• Non-GAAP Reconciliations (pg. 27)
Well Enhancer helideck
Presentation Outline
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(A) Results of Cal Dive, our former Shelf Contracting business, were consolidated through June 10, 2009, at which time our ownership interest dropped below
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings with
the sale of the substantial majority of our remaining interest in Cal Dive. Second quarter revenues from our former Shelf Contracting business totaled $197.7
million.
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings with
the sale of the substantial majority of our remaining interest in Cal Dive. Second quarter revenues from our former Shelf Contracting business totaled $197.7
million.
(B) See non-GAAP reconciliation on slides 28-29.
(C) Excludes Cal Dive contribution in all periods presented.
Executive Summary
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• $17.9 million gain on the sale of 23.2 million shares of Cal Dive stock
• $7.1 million of incremental expense recorded as a result of the Company’s weather
derivative contract
derivative contract
•Expense concentrated in Q3 2009 to coincide with hurricane season vs. straight
line expense
line expense
•Q3 results excluded realized hedge gains of approximately $25 million for natural gas
hedge mark-to-market adjustments previously recognized as unrealized gains in Q1
and Q2 of 2009
hedge mark-to-market adjustments previously recognized as unrealized gains in Q1
and Q2 of 2009
The after-tax effect of the above two items on EPS totaled $0.07 per diluted
share.
share.
Executive Summary
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• Net debt balance decreased by $853 million year-to-date
• Oil and gas production totaled 9.8 Bcfe for Q3 2009 versus 12.4 Bcfe in Q2 2009
• Avg realized price for oil $68.86 / bbl ($72.29 / bbl in Q2 2009), including effect of
settled hedges
settled hedges
• Avg realized price for gas $8.02 / Mcf ($7.62 / Mcf in Q2 2009), including the effect of
settled hedges
settled hedges
Executive Summary (continued)
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Helix Producer I topside module installation progress at Kiewit Offshore Services fabrication yard
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• Express dry-dock, transit and utilization on
Danny pipeline is impacting external revenues
Danny pipeline is impacting external revenues
• Capital expenditures of approximately $340 to
$360 million for 2009, $209 million spent
year-to-date
$360 million for 2009, $209 million spent
year-to-date
• $205 million relates to completion of three
major vessel projects (Well Enhancer, Caesar
and Helix Producer I)
major vessel projects (Well Enhancer, Caesar
and Helix Producer I)
• $55 million relates to development of Danny
and Phoenix oil fields
and Phoenix oil fields
• Improved liquidity and debt levels (see slide 11)
Express spooling pipe for ERT Danny project
2009 Outlook
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• Production range: 43 - 47 Bcfe
• Oil and gas prices
• Without hedges: $4.37 /mcfe;
$66.41 /bbl
$66.41 /bbl
• With realized hedges and mark-to-
market adjustments (gas only):
$7.45 /mcfe; $70.91 /bbl
market adjustments (gas only):
$7.45 /mcfe; $70.91 /bbl
HPI pipe racks connecting production modules
to buoy system
to buoy system
2009 Outlook (continued)
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Liquidity and
Capital
Resources
Capital
Resources
Well Enhancer and Seawell in Aberdeen, Scotland
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Debt
Liquidity* of $781 million at 9/30/09
* Defined as available revolver capacity plus cash
Significant Balance Sheet Improvements
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• Completed (≈ $600 million pre-tax):
•Oil and gas assets
• Bass Lite sale December 08 & January 09 ($49 million)
• EC 316 sale in February 09 ($18 million)
• Cal Dive
• Sold a total of 15.2 million shares of Cal Dive common stock to Cal Dive
in January and June 2009 for aggregate proceeds of $100 million
in January and June 2009 for aggregate proceeds of $100 million
• Sold 45.8 million Cal Dive shares in secondary offerings for proceeds of
≈ $405 million (net of offering costs) in June and September 2009
≈ $405 million (net of offering costs) in June and September 2009
• Sold Helix RDS for $25 million in April 2009
Company will continue to seek a sale of its shelf oil and gas properties
Liquidity and Capital Resources
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Company is in compliance as of 9/30/2009, and based on current forecasts expects
compliance at December 31, 2009.
compliance at December 31, 2009.
Covenant | Test | Explanation |
Collateral Coverage Ratio | > 1.75 : 1 | Basket of collateral to Senior Secured Debt |
Fixed Charge Coverage Ratio | > 2.75 : 1 | Consolidated EBITDA to consolidated interest charges |
Consolidated Leverage Ratio | < 3.5 : 1 | Consolidated EBITDA to consolidated debt |
Liquidity and Capital Resources
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Credit Facilities, Commitments and Amortization
– $435 Million Revolving Credit Facility - UNDRAWN.
• Facility extended to November 2012.
• In July 2011, commitments reduced to $407 million.
• $50 million of LCs in place.
– $416 Million Term Loan B - Committed facility through June 2013. $4.3 million
principal payments annually.
principal payments annually.
– $550 Million High Yield Notes - Interest only until maturity (January 2016) or called
by Helix. First Helix call date is January 2012.
by Helix. First Helix call date is January 2012.
– $300 Million Convertible Notes - Interest only until put by noteholders or called by
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
– $119 Million MARAD - Original 25 year term; matures February 2027. $4.4 million
principal payments annually.
principal payments annually.
Liquidity and Capital Resources
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• Completed the offshore work on the
Reliance KGD6 Project in the Bay of
Bengal
Reliance KGD6 Project in the Bay of
Bengal
• Express returned from India to the Gulf of
Mexico after her regulatory dry-dock in
Spain and began spooling the Helix ERT
Danny 12-inch pipe in 8-inch pipe (PIP)
pipeline at Helix’s new spoolbase in
Ingleside, Texas
Mexico after her regulatory dry-dock in
Spain and began spooling the Helix ERT
Danny 12-inch pipe in 8-inch pipe (PIP)
pipeline at Helix’s new spoolbase in
Ingleside, Texas
• Intrepid Gulf of Mexico activities included:
– Completed Newfield Fastball project
– Installed jumpers for BP to tie-in
Murphy’s Thunder Hawk and BHP
Shenzi export pipelines
Murphy’s Thunder Hawk and BHP
Shenzi export pipelines
– Worked for Helix ERT on the
Phoenix Project
Phoenix Project
Caesar pipelay stinger
Contracting Services
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• Olympic Canyon working for
Reliance Industries offshore India
under long term inspection, repair
and maintenance contract
Reliance Industries offshore India
under long term inspection, repair
and maintenance contract
• Olympic Triton supporting
Technip’s Deep Blue on GOM
Projects and will transit to West
Africa under contract with Technip
Technip’s Deep Blue on GOM
Projects and will transit to West
Africa under contract with Technip
• Island Pioneer and Northern
Canyon enjoyed high utilization on
North Sea trenching projects
Canyon enjoyed high utilization on
North Sea trenching projects
Cable trencher T200 being launched from the Seacor Canyon offshore Indonesia
Contracting Services
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• Seawell worked the majority of the quarter
for Shell under the long term firm contract
and also worked for BP, Apache and
Venture
for Shell under the long term firm contract
and also worked for BP, Apache and
Venture
• Q4000 worked for Chevron and Walter Oil
& Gas in well intervention mode in July
and for ENI as an accommodation vessel
for the rest of the quarter. ENI work was
contracted at low rates because of delays
in prospective well intervention work.
& Gas in well intervention mode in July
and for ENI as an accommodation vessel
for the rest of the quarter. ENI work was
contracted at low rates because of delays
in prospective well intervention work.
• Well Ops APAC operations still being
impacted by refurbishment of the Vessel
Deployment System and Subsea
Intervention Lubricator
impacted by refurbishment of the Vessel
Deployment System and Subsea
Intervention Lubricator
• Well Enhancer construction completed at
end of the third quarter and is now
generating revenue
end of the third quarter and is now
generating revenue
Subsea Intervention Lubricator system
onboard Well Enhancer
onboard Well Enhancer
Contracting Services
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Well Enhancer generating revenue
Caesar completed sea trials offshore China
HPI external thruster porches, DTS receptacle
and all production modules installed
and all production modules installed
Marine Capital Projects
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• DTS buoy loaded out and to be installed by
Q4000 in November 2009
Q4000 in November 2009
• Installation of 2,500-ton production modules
underway and expected to be completed
November with hook-up to follow
underway and expected to be completed
November with hook-up to follow
• Expect deployment in Phoenix field
in Q2 2010
in Q2 2010
HPI production module installation
Disconnectable
Transfer System
Transfer System
Helix Producer I
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(A) Results of Cal Dive, our former Shelf Contracting business, were consolidated through June 10, 2009, at which time our ownership interest dropped below
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings
with the sale of the substantial majority of our remaining interest in Cal Dive.
50%; thereafter, our remaining interest was accounted for under the equity method of accounting until September 23, 2009, when we reduced our holdings
with the sale of the substantial majority of our remaining interest in Cal Dive.
(B) See non-GAAP reconciliation on slides 28-29. Amounts are prior to intercompany eliminations.
(C) Includes corporate and operational support overheads.
(D) Amounts primarily represent equity in earnings of Marco Polo and Independence Hub investments and equity in earnings from Cal Dive from June 11
through September 23, 2009.
through September 23, 2009.
Contracting Services
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(A) Amounts are before intercompany eliminations. See non-GAAP reconciliation on slides 28-29.
Contracting Services
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Contracting Services
(A) Includes REM Forza on long-term charter.
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(B) Q2 amounts reflect
$11.5 million of impairments
related to reduction in
carrying values of certain oil
and gas properties due to
reserve revisions.
$11.5 million of impairments
related to reduction in
carrying values of certain oil
and gas properties due to
reserve revisions.
(C) Includes UK production of 0.1
Bcfe in Q3 2008 and 0.2 Bcfe
in Q2 2009.
Bcfe in Q3 2008 and 0.2 Bcfe
in Q2 2009.
(D) Including effect of settled
hedges.
hedges.
Oil & Gas
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(A) Includes accretion expense.
(B) Excludes hurricane-related repairs of $5.1 , $2.3 and $7.4 million, net of insurance recoveries of $0, $0, and $97.7 million, for the
quarters ended September 30, 2009, September 30, 2008 and June 30, 2009, respectively.
quarters ended September 30, 2009, September 30, 2008 and June 30, 2009, respectively.
(C) Includes $10.4 million related to a weather derivative contract in the third quarter of 2009. Excludes exploration expenses of $0.9,
$1.6 and $1.5 million, and abandonment of $2.9, $6.5 and $0.8 million for the quarters ended September 30, 2009, September 30,
2008 and June 30, 2009, respectively.
$1.6 and $1.5 million, and abandonment of $2.9, $6.5 and $0.8 million for the quarters ended September 30, 2009, September 30,
2008 and June 30, 2009, respectively.
Oil & Gas
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Summary of Oct 2009-Dec 2010 Hedging Positions
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Non GAAP Reconciliations
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Non GAAP Reconciliations
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