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Minnesota | 1389 | 95-3409686 | ||||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||||
incorporation or organization) | Classification Code Number) | Identification No.) |
Houston, Texas 77060
(281) 618-0400
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Helix Energy Solutions Group, Inc.
Senior Vice President, General Counsel and Corporate Secretary
400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
(281) 618-0400
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Arthur H. Rogers | Michael O’Leary | |
Fulbright & Jaworski L.L.P. | Andrews Kurth LLP | |
1301 McKinney, Suite 5100 | 600 Travis, Suite 4200 | |
Houston, Texas 77010 | Houston, Texas 77002-3090 | |
(713) 651-5151 | (713) 220-4200 |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||||
Title of Each Class of Securities to be | Amount to be | Offering Price | Aggregate | Registration | ||||||||||||
Registered(1) | Registered (2) | Per Unit | Offering Price(3) | Fee | ||||||||||||
Common Stock, without par value | 13,539,138 | N/A | $486,912,122 | $52,100 | ||||||||||||
(1) | This registration statement relates to shares of common stock, without par value, of Helix Energy Solutions Group, Inc. (“Helix”) issuable to holders of common stock, par value $.01 per share, of Remington Oil and Gas Corporation (“Remington”) pursuant to the Merger Agreement. | |
(2) | The maximum number of shares of Helix common stock issuable in connection with the merger in exchange for shares of Remington common stock, based on the number of shares of Remington common stock exchangeable in the merger, is equal to the sum of (i) 30,360,716 shares of Remington common stock outstanding on January 22, 2006 (including 854,420 shares of restricted stock), multiplied by an exchange ratio of 0.436 of a share of Helix common stock for each share of Remington common stock and (ii) up to 692,353 shares of Remington common stock issuable on the exercise of options outstanding on January 22, 2006, each of which will be or will become fully vested prior to the effective time of the merger and, by virtue of the merger, will be canceled and converted to the right to receive the merger consideration, multiplied by an exchange ratio of 0.436. | |
(3) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), Rule 457(f)(1) and Rule 457(f)(3) of the Securities Act, based on the market value of the shares of Remington common stock to be exchanged in the merger, as established by the average of the high and low prices of Remington common stock as reported on the consolidated tape of the New York Stock Exchange on March 28, 2006, which was $42.68, and the amount of cash to be paid by Helix in exchange for shares of Remington common stock (equal to $27.00 multiplied by 31,053,069, the aggregate number of shares of Remington common stock calculated as set forth above). |
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Sincerely, | ||
James A. Watt | ||
Chairman of the Board and | ||
Chief Executive Officer |
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8201 Preston Road, Suite 600
Dallas, Texas 75225-6211
(214) 210-2650
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TO BE HELD [ ], 2006
By order of the Board of Directors, | ||
Frank T. Smith, Jr. | ||
Corporate Secretary | ||
[ ], 2006 |
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Opinion of Andrew C. Becher, Special Counsel to the registrant | ||||||||
Consent of Ernst & Young LLP | ||||||||
Consent of Ernst & Young LLP | ||||||||
Consent of Huddleston & Co., Inc. | ||||||||
Consent of Netherland, Sewell & Associates, Inc. |
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Annex A | Agreement and Plan of Merger dated as of January 22, 2006, by and among Helix Energy Solutions Group, Inc. (formerly known as Cal Dive International, Inc.) and Remington Oil and Gas Corporation, as amended by Amendment No. 1 to Agreement and Plan of Merger dated January 24, 2006, by and among Helix Energy Solutions Group, Inc., Cal Dive Merger – Delaware Inc., a wholly owned subsidiary of Helix Energy Solutions Group, Inc., and Remington Oil and Gas Corporation | |
Annex B | Opinion of Jefferies & Company, Inc., dated January 22, 2006 | |
Annex C | Appraisal and Dissenters’ Rights under the Delaware General Corporation Law |
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• | Helix Energy Solutions Group, Inc., a Minnesota corporation formerly known as Cal Dive International, Inc., as “Helix”; | ||
• | Remington Oil and Gas Corporation, a Delaware corporation, as “Remington”; | ||
• | Cal Dive Merger – Delaware, Inc., a newly formed Delaware corporation and a wholly owned subsidiary of Helix, as “Merger Sub”; | ||
• | the merger of Remington into Merger Sub and the conversion of shares of Remington common stock into the right to receive cash and shares of Helix common stock as the “merger”; | ||
• | the agreement and plan of merger, as amended, among Helix, Merger Sub and Remington as the “merger agreement”; | ||
• | the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as the “HSR Act” or the “Hart-Scott-Rodino Act”; and | ||
• | the General Corporation Law of the State of Delaware as the “DGCL.” |
Q1: | What am I voting on? | |
A1: | Helix is proposing to acquire Remington. You are being asked to vote to approve and adopt the merger agreement. In the merger, Remington will merge into Merger Sub. Merger Sub would be the surviving entity in the merger and would remain a wholly owned subsidiary of Helix, and Remington would no longer be a separate company. Remington is also seeking your approval of a proposal to adjourn or postpone the special meeting, if necessary, to solicit additional proxies in favor of approval and adoption of the merger agreement and any other matters that may come before the special meeting. | |
Q2: | What will I receive in exchange for my Remington shares? | |
A2: | Upon completion of the merger, you will receive a combination of 0.436 of a share of Helix common stock and $27.00 in cash, without interest, for each share of Remington common stock that you own. We refer to the aggregate amount of the stock consideration and cash consideration to be received by Remington stockholders pursuant to the merger as the merger consideration. | |
Q3: | Do I have the option to receive all cash consideration or all stock consideration for my Remington shares? | |
A3: | No. All Remington stockholders will receive the fixed combination of the cash consideration and the stock consideration for each share of Remington common stock that they own. | |
Q4: | What are the tax consequences of the merger to me? | |
A4: | The merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, so that you generally will recognize gain (but not loss) in an amount not to exceed any cash received as part of the merger consideration for United States federal income tax purposes as a result of the merger. The merger is conditioned on the receipt of legal opinions that (i) for U.S. federal income tax |
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purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, (ii) each of Helix and Remington will be a party to the reorganization within the meaning of Section 368(b) of the Internal Revenue Code and (iii) no gain or loss will be recognized by Helix, Remington or Merger Sub as a result of the merger. | ||
For a more complete discussion of the United States federal income tax consequences of the merger, see “Material United States Federal Income Tax Consequences” beginning on page 54 of this proxy statement/prospectus. | ||
Tax matters are very complicated and the consequences of the merger to any particular Remington stockholder will depend on that stockholder’s particular facts and circumstances. You are urged to consult your own tax advisor to determine your own tax consequences from the merger. | ||
Q5: | What is the required vote to approve and adopt the merger agreement? | |
A5: | Holders representing a majority of the outstanding shares of Remington common stock entitled to vote at the special meeting must vote to approve and adopt the merger agreement to complete the merger. No vote of Helix stockholders is required in connection with the merger. | |
Q6: | What happens if I do not vote? | |
A6: | Because the required vote of Remington stockholders is based upon the number of outstanding shares of Remington common stock entitled to vote rather than upon the number of shares actually voted, abstentions from voting and “broker non-votes” will have the same effect as a vote AGAINST approval and adoption of the merger agreement. If you return a properly signed proxy card but do not indicate how you want to vote, your proxy will be counted as a vote FOR approval and adoption of the merger agreement and FOR approval of any proposal to adjourn or postpone the special meeting to solicit additional proxies in favor of approval and adoption of the merger agreement. | |
Q7: | How does the Remington board of directors recommend I vote? | |
A7: | The board of directors of Remington unanimously recommends that Remington’s stockholders vote FOR approval and adoption of the merger agreement. The Remington board of directors believes the merger is advisable and in the best interests of Remington and its stockholders. | |
Q8: | Do I have dissenters’ or appraisal rights with respect to the merger? | |
A8: | Yes. Under Delaware law, you have the right to dissent from the merger and, in lieu of receiving the merger consideration, obtain payment in cash of the fair value of your shares of Remington common stock as determined by the Delaware Chancery Court. To exercise appraisal rights, you must strictly follow the procedures prescribed by Section 262 of the DGCL. See “The Merger—Appraisal and Dissenters’ Rights” beginning on page 46 of this proxy statement/prospectus. In addition, the full text of the applicable provisions of Delaware law is included as Annex C to this proxy statement/prospectus. | |
Q9: | Will the rights of a Remington stockholder change as a result of the merger? | |
A9: | Yes. Through the date of the merger, the rights of Helix shareholders will continue to be governed by Helix’s articles of incorporation and bylaws, and the rights of Remington stockholders will continue to be governed by Remington’s certificate of incorporation and bylaws. Upon completion of the merger, Remington stockholders will become Helix shareholders and their rights will then be governed by Helix’s articles of incorporation and bylaws. Please read carefully the summary of the material differences between the rights of Helix shareholders and Remington stockholders under “Comparison of Stockholders’ Rights” beginning on page 163 of this proxy statement/prospectus. | |
Q10: | What will happen to shares of Helix common stock in the merger? | |
A10: | Each outstanding share of Helix common stock will remain outstanding as a share of Helix common stock. |
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Q11: | Will Remington stockholders be able to trade the Helix common stock that they receive in the merger? | |
A11: | The shares of Helix common stock issued in connection with the merger will be freely tradable, unless you are an affiliate of Remington, and will be quoted on the Nasdaq National Market System under the symbol “HELX.” Generally, persons who are deemed to be affiliates (generally directors, officers and 10% or greater stockholders) of Remington must comply with Rule 145 under the Securities Act of 1933 if they wish to sell or otherwise transfer any of the shares of Helix common stock they receive in the merger. You will be notified if you are an affiliate of Remington. | |
Q12: | Are there risks associated with the merger that I should consider in deciding how to vote? | |
A12: | Yes. There are risks associated with all business combinations, including the merger of our two companies. In particular, the implied value of the stock consideration will fluctuate as the market price of Helix common stock fluctuates. Accordingly, the value of the Helix common stock that Remington stockholders will receive in return for their Remington common stock may be less than or more than the value of the Helix common stock as of the date of the merger agreement or the date of this proxy statement/prospectus. There are a number of other risks that are discussed in this document and in other documents incorporated by reference in this document.Please read with particular care the more detailed description of the risks associated with the merger discussed under “Risk Factors” beginning on page 14 of this proxy statement/prospectus. | |
Q13: | When do you expect the merger to be completed? | |
A13: | We are working on completing the merger as quickly as possible. To complete the merger, we must obtain the approval of the Remington stockholders and satisfy or waive all other closing conditions under the merger agreement, which we currently expect should occur in the second quarter of 2006. However, we cannot assure you when or if the merger will occur. See “The Merger Agreement—Conditions Precedent” beginning on page 68 of this proxy statement/prospectus. If the merger occurs, we will promptly make a public announcement of this fact. | |
Q14: | What will happen to my Remington shares after completion of the merger? | |
A14: | Upon completion of the merger, your shares of Remington common stock will be canceled and will represent only the right to receive your portion of the merger consideration (or the fair value of your Remington common stock if you seek appraisal rights) and any declared but unpaid dividends that you may be owed. In addition, trading in shares of Remington common stock on the NYSE will cease and price quotations for shares of Remington common stock will no longer be available. | |
About the Special Meeting | ||
Q15: | When and where is the Remington special stockholder meeting? | |
A15: | The Remington special stockholder meeting will take place on [ ], 2006, at [ ], Central Daylight Time, and will be held at [ ]. | |
Q16: | What will happen at the special meeting? | |
A16: | At the Remington special meeting, Remington stockholders will vote on a proposal to adopt the merger agreement and on a proposal to approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger proposal. We cannot complete the merger unless, among other things, Remington’s stockholders vote to adopt the merger agreement. | |
Q17: | Who is entitled to vote at the special meeting? | |
A17: | Only holders of record of Remington common stock at the close of business on [ ], 2006, which is the date Remington’s board of directors has fixed as the record date for the special meeting, are entitled to receive notice of and vote at the special meeting. |
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Q18: | What is a quorum? | |
A18: | A quorum is the number of shares that must be present to hold the meeting. The quorum requirement for the Remington special meeting is the holders of a majority of the issued and outstanding shares of Remington common stock as of the record date, present in person or represented by proxy and entitled to vote at the special meeting. A proxy submitted by a stockholder may indicate that all or a portion of the shares represented by the proxy are not being voted with respect to a particular matter. Proxies that are marked “abstain” or for which votes have otherwise been withheld and proxies relating to “street name” shares that are returned to the relevant company but not voted will be treated as shares present for purposes of determining the presence of a quorum on all matters. | |
Q19: | How many shares can vote? | |
A19: | On the record date, Remington had outstanding [ ] shares of common stock, which constitute Remington’s only outstanding voting securities. Each Remington stockholder is entitled to one vote on each proposal for each share of Remington common stock held as of the record date. | |
Q20: | What vote is required? | |
A20: | The affirmative vote of the holders of a majority of the outstanding shares of Remington common stock entitled to vote at the Remington special meeting is required to adopt the merger agreement. The approval of a proposal to adjourn or postpone the special meeting, if necessary, to permit further solicitation of proxies, if there are not sufficient votes at the time of the special meeting to approve the other proposal(s), requires the vote of a majority of shares present in person or by proxy at the special meeting and actually voted at that special meeting. | |
If a quorum is not present at the Remington special meeting, the holders of a majority of the shares entitled to vote who are present in person or by proxy at the meeting may adjourn the meeting. | ||
Even if the votes set forth above are obtained at the special meeting, we cannot assure you that the merger will be completed, because the completion of the merger is subject to the satisfaction or waiver of other conditions discussed in this proxy statement/prospectus. | ||
Q21: | What do I need to do now? | |
A21: | After carefully reading and considering the information contained and referred to in this proxy statement/prospectus, including its annexes, please authorize your shares of Remington common stock to be voted by returning your completed, dated and signed proxy card in the enclosed return envelope, or vote by telephone or Internet, as soon as possible. To be sure that your vote is counted, please submit your proxy as instructed on your proxy card even if you plan to attend the special meeting in person. DO NOT enclose or return your stock certificate(s) with your proxy card. If you hold shares registered in the name of a broker, bank or other nominee, that broker, bank or other nominee has enclosed or will provide a voting instruction card for use in directing your broker, bank or other nominee how to vote those shares. | |
Q22: | May I vote in person? | |
A22: | Yes. You may attend the special meeting of Remington’s stockholders and vote your shares in person rather than by signing and returning your proxy card. If you wish to vote in person and your shares are held by a broker, bank or other nominee, you need to obtain a proxy from the broker, bank or nominee authorizing you to vote your shares held in the broker’s, bank’s or nominee’s name. | |
Q23: | If my shares are held in “street name,” will my broker, bank or other nominee vote my shares for me? | |
A23: | Yes, but your broker, bank or other nominee may vote your shares of Remington common stock only if you instruct your broker, bank or other nominee how to vote. If you do not provide your broker, bank or other nominee with instructions on how to vote your “street name” shares, your broker, bank or other nominee will not be permitted to vote them on the merger agreement. You should follow the directions your broker, bank or other nominee provides to ensure your shares are voted at the special meeting. Please check the voting form used by your broker, bank or other nominee to see if it offers telephone or Internet voting. |
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Q24: | May I change my vote? | |
A24: | Yes. You may change your vote at any time before your proxy is voted at the special meeting. If your shares of Remington common stock are registered in your own name, you can do this in one of three ways. | |
• First, you can deliver to Remington, prior to the special meeting, a written notice stating that you want to revoke your proxy. The notice should be sent to the attention of Mr. Frank T. Smith, Jr., Corporate Secretary, Remington Oil and Gas Corporation, 8201 Preston Road, Suite 600, Dallas, Texas 75225-6211, to arrive by the close of business on [ ], 2006. | ||
• Second, prior to the special meeting, you can complete and deliver a new proxy card. The proxy card should be sent to the addressee indicated on the pre-addressed envelope enclosed with your initial proxy card to arrive by the close of business on [ ], 2006. The latest dated and signed proxy actually received by this addressee before the special meeting will be counted, and any earlier proxies will be considered revoked. | ||
If you vote your proxy electronically through the Internet or by telephone, you can change your vote by submitting a different vote through the Internet or by telephone, in which case your later-submitted proxy will be recorded and your earlier proxy revoked. | ||
• Third, you can attend the Remington special meeting and vote in person. Any earlier proxy will thereby be revoked automatically. Simply attending the special meeting, however, will not revoke your proxy, as you must vote at the special meeting to revoke a prior proxy. | ||
If you have instructed a broker to vote your shares, you must follow directions you receive from your broker to change or revoke your vote. | ||
If you are a street-name stockholder and you vote by proxy, you may later revoke your proxy instructions by informing the holder of record in accordance with that entity’s procedures. | ||
Q25: | How will the proxies vote on any other business brought up at the special meetings? | |
A25: | By submitting your proxy, you authorize the persons named on the proxy card to use their judgment to determine how to vote on any other matter properly brought before the special meeting. The proxies will vote your shares in accordance with your instructions. If you sign, date and return your proxy without giving specific voting instructions, the proxies will vote your shares “FOR” the proposals. If you do not return your proxy, or if your shares are held in street name and you do not instruct your bank, broker or nominee on how to vote, your shares will not be voted at the special meeting. | |
The board of directors of Remington does not intend to bring any other business before the meeting, and it is not aware that anyone else intends to do so. If any other business properly comes before the meeting, it is the intention of the persons named on the proxy cards to vote as proxies in accordance with their best judgment. | ||
Q26: | What is a broker non-vote? | |
A26: | A “broker non-vote” occurs when a bank, broker or other nominee submits a proxy that indicates that the broker does not vote for some or all of the proposals, because the broker has not received instructions from the beneficial owners on how to vote on these proposals and does not have discretionary authority to vote in the absence of instructions. | |
Q27: | Will broker non-votes or abstentions affect the results? | |
A27: | If you are a Remington stockholder, broker non-votes and abstentions will have the same effect as a vote against the proposal to adopt the merger agreement, but will have no effect on the outcome of the proposal relating to adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies. If your shares are held in street name, we urge you to instruct your bank, broker or nominee on how to vote your shares for those proposals on which you are entitled to vote. |
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Q28: | What happens if I choose not to submit a proxy or to vote? | |
A28: | If a Remington stockholder does not submit a proxy or vote at the Remington special meeting, it will have the same effect as a vote against the proposal to adopt the merger agreement, but will have no effect on the outcome of the proposal relating to adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies. | |
Q:29 | Why is it important for me to vote? | |
A29: | We cannot complete the merger without holders of a majority of the outstanding shares of Remington common stock entitled to vote voting in favor of the approval and adoption of the merger agreement. | |
Q30: | What happens if I sell my shares of Remington common stock before the special meeting? | |
A30: | The record date for the special meeting is [ ], 2006, which is earlier than the date of the special meeting. If you hold your shares of Remington common stock on the record date you will retain your right to vote at the special meeting. If you transfer your shares of Remington common stock after the record date but prior to the date on which the merger is completed, you will lose the right to receive the merger consideration for shares of Remington common stock. The right to receive the merger consideration will pass to the person who owns your shares of Remington common stock when the merger is completed. | |
General | ||
Q31: | Should I send in my Remington stock certificates now? | |
A31: | No. PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY CARD. After the merger is completed, you will receive written instructions informing you how to send in your stock certificates to receive the merger consideration. | |
Q32: | What does it mean if I get more than one proxy card? | |
A32: | Your shares are probably registered in more than one account. You should vote each proxy card you receive. | |
Q33: | Where can I find more information about the special meeting, the merger, Remington or Helix? | |
A33: | You can find more information about Remington or Helix in each of the companies’ respective filings with the Securities and Exchange Commission and, with respect to Helix, with the Nasdaq National Market, and, with respect to Remington, the New York Stock Exchange. If you have any questions about the special meeting, the merger or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, you should contact Remington at the address or phone number below. If your broker holds your shares, you can also call your broker for additional information. |
8201 Preston Road, Suite 600
Dallas, Texas 75225-6211
(214) 210-2650
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400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
(281) 618-0400
8201 Preston Road, Suite 600
Dallas, Texas 75225-6211
(214) 210-2650
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Closing Price Per Share | ||||||||
January 20, 2006 | [ ],2006 | |||||||
Helix common stock | $ | 44.33 | $ | |||||
Remington common stock | $ | 37.96 | $ | |||||
Remington Merger Consideration Equivalent | $ | 46.33 | $ |
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• | adoption of the merger agreement by the holders of at least a majority of the outstanding Remington shares entitled to vote at the Remington special meeting; | ||
• | receipt of consents, approvals, permits and authorizations of governmental authorities or other persons, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Act, required to consummate the transactions contemplated by the merger agreement except where the failure to obtain them would not have a material adverse effect (as defined in the merger agreement) on Helix or materially adversely affect the consummation of the merger; | ||
• | continued effectiveness of the registration statement of which this proxy statement/prospectus is a part, the absence of a stop order by the Securities and Exchange Commission suspending the effectiveness of the registration statement and the absence of any continuing action, suit, proceeding or investigation by the SEC to suspend such effectiveness; | ||
• | receipt of all necessary approvals under state securities laws relating to the issuance or trading of the Helix common stock to be issued in the merger; | ||
• | absence of any temporary restraining order, preliminary or permanent injunction or other order issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger, so long as the parties have used their reasonable efforts to have any applicable decree, ruling, injunction or order vacated; | ||
• | approval for listing of the Helix shares to be issued in the merger on its stock exchange, upon official notice of issuance; | ||
• | absence of Remington stockholders exercising their appraisal and dissenters rights with respect to greater than 8% of the outstanding shares of Remington common stock immediately prior to the effective time of the merger; | ||
• | accuracy of the representations and warranties made by each of Remington, Helix and Merger Sub as of the closing of the merger to the extent specified in the merger agreement; | ||
• | Remington’s, Helix’s and Merger Sub’s performance in all material respects of their respective covenants and agreements under the merger agreement; | ||
• | absence of a material adverse change in either Remington’s or Helix’s condition (financial or otherwise), operations, business, properties or prospects that have or would be reasonably likely to have a material adverse effect (as defined in the merger agreement) on Remington or Helix, respectively; | ||
• | receipt of opinions by Helix and Remington from their respective tax counsel that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and | ||
• | delivery by Helix to the exchange agent of an irrevocable letter of instruction, in a form reasonably satisfactory to Remington, authorizing and directing the transfer to Remington stockholders of the merger consideration. |
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• | by mutual written consent of Helix and Remington; | ||
• | by either Helix or Remington, if: |
• | adoption of the merger agreement and approval of the merger by the Remington stockholders is not obtained; | ||
• | the parties fail to consummate the merger on or before August 31, 2006, unless the failure is the result of a breach of the merger agreement by the party seeking the termination; or | ||
• | any governmental authority has issued a final and nonappealable order, decree or ruling or has taken any other final and nonappealable action that restrains, enjoins or prohibits the merger, unless the party seeking the termination has not used all reasonable efforts to remove such injunction, order or decree; |
• | by Helix, if: |
• | Remington materially breaches any of its representations or warranties set forth in the merger agreement or Remington fails to materially perform any of its covenants or agreements under the merger agreement, and, in either case, Remington has not cured the breach or failure within 10 days of receiving notice from Helix of such breach or failure; | ||
• | Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other than Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing; | ||
• | Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or | ||
• | a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so; |
• | by Remington, if: |
• | prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that: |
• | Remington complies with its obligations under the no-solicitation provisions of the merger agreement, | ||
• | the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal, | ||
• | within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix, and |
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• | Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; see “The Merger Agreement—Covenants and Agreements—Acquisition Proposals” beginning on page 65; or |
• | Helix materially breaches any of its representations or warranties set forth in the merger agreement or Helix fails to materially perform any of its covenants or agreements under the merger agreement, and, in either case, Helix has not cured the breach or failure within 10 days of receiving notice from Remington of such breach or failure. |
• | if Remington terminates the merger agreement because, prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that: |
• | Remington complies with its obligations under the no-solicitation provisions of the merger agreement, | ||
• | the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal, | ||
• | within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix, and | ||
• | Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; and |
• | if Helix terminates the merger agreement because: |
• | Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other then Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing; | ||
• | Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or | ||
• | a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement disclosing that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so. |
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• | the appointment of one of Remington’s current directors to Helix’s board of directors; | ||
• | two officers of Remington will enter into mutually agreeable employment agreements with Helix upon effectiveness of the merger; | ||
• | under the terms of the change in control severance agreements entered into between Remington and certain of its officers, if an officer’s employment with Remington (or its successor) is terminated during |
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the severance period (as defined in the officer’s change in control severance agreement), that officer is entitled to severance benefits, including excise tax gross-up payments; | |||
• | as of the effective time of the merger, acceleration of vesting of Remington stock options and restricted stock for directors and officers; | ||
• | indemnification of directors and officers of Remington against certain liabilities arising both before and, in some cases, after the merger; and | ||
• | liability insurance for certain directors and officers of Remington. |
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• | Remington may be required to pay Helix the sum of (i) Helix’s documented out of pocket fees and expenses incurred or paid by or on behalf of Helix in connection with the merger or the consummation of any of the transactions contemplated by the merger agreement, including all HSR Act filing fees, fees and expenses of counsel, commercial banks, investment banking firms, accountants, experts, environmental consultants, and other consultants to Helix, up to a maximum amount not to exceed $2 million, and (ii) $45 million, if the merger agreement is terminated under certain circumstances and Remington enters into or completes an alternative transaction; | ||
• | The current market price of Remington common stock may reflect a market assumption that the merger will occur, and a failure to complete the merger could result in a negative perception by the stock market of Remington generally and a resulting decline in the market price of Remington common stock; | ||
• | Certain costs relating to the merger (such as legal, accounting and financial advisory fees) are payable by Remington whether or not the merger is completed; | ||
• | There may be substantial disruption to the business of Remington and a distraction of its management and employees from day-to-day operations, because matters related to the merger (including integration planning) may require substantial commitments of time and resources, which could otherwise have been devoted to other opportunities that could have been beneficial to Remington; | ||
• | Remington’s business could be adversely affected if it is unable to retain key employees or attract qualified replacements; and | ||
• | Remington would continue to face the risks that it currently faces as an independent company, as further described in the documents that Remington has filed with the SEC that are incorporated by reference into this proxy statement/prospectus. |
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• | limiting its ability to obtain additional financing on satisfactory terms to fund its working capital requirements, capital expenditures, acquisitions, investments, debt service requirements and other general corporate requirements; | ||
• | increasing its vulnerability to general economic downturns, competition and industry conditions, which could place it at a competitive disadvantage compared to its competitors that are less leveraged; | ||
• | increasing its exposure to rising interest rates because a portion of its borrowings will be at variable interest rates; | ||
• | reducing the availability of its cash flow to fund its working capital requirements, capital expenditures, acquisitions, investments and other general corporate requirements because it will be required to use a substantial portion of its cash flow to service debt obligations; and | ||
• | limiting its flexibility in planning for, or reacting to, changes in its business and the industry in which it operates. |
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• | Worldwide economic activity; | ||
• | Economic and political conditions in the Middle East and other oil-producing regions; | ||
• | Coordination by the Organization of Petroleum Exporting Countries, or OPEC; | ||
• | The cost of exploring for and producing oil and gas; | ||
• | The sale and expiration dates of offshore leases in the United States and overseas; | ||
• | The discovery rate of new oil and gas reserves in offshore areas; | ||
• | Technological advances; | ||
• | Interest rates and the cost of capital; | ||
• | Environmental regulations; and | ||
• | Tax policies. |
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• | unexpected drilling conditions; | ||
• | title problems; | ||
• | pressure or irregularities in formations; | ||
• | equipment failures or accidents; | ||
• | adverse weather conditions; and | ||
• | compliance with environmental and other governmental requirements, which may increase our costs or restrict our activities. |
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• | the loss of revenue, property and equipment from hazards such as expropriation, nationalization, war, insurrection, acts of terrorism and other political risks, | ||
• | increases in taxes and governmental royalties; | ||
• | changes in laws and regulations affecting its operations; | ||
• | renegotiation or abrogation of contracts with governmental entities; | ||
• | changes in laws and policies governing operations of foreign-based companies; | ||
• | currency restrictions and exchange rate fluctuations; | ||
• | world economic cycles; | ||
• | restrictions or quotas on production and commodity sales; | ||
• | limited market access; and | ||
• | other uncertainties arising out of foreign government sovereignty over its international operations. |
• | ready markets for oil and natural gas; | ||
• | the proximity and capacity of pipelines and other transportation facilities; | ||
• | fluctuating demand for crude oil and natural gas; | ||
• | the availability and cost of competing fuels; and | ||
• | the effects of foreign governmental regulation of oil and gas production and sales. |
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• | the factors described under “Risk Factors” beginning on page 14 of this proxy statement/prospectus; | ||
• | the factors that generally affect Helix’s and Remington’s businesses as further outlined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this proxy statement/prospectus, in the case of Helix, and in Remington’s Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2005, in the case of Remington, and elsewhere in this proxy statement/prospectus, including the performance of contracts by suppliers, customers and partners; employee management issues; and complexities of global political and economic developments; and | ||
• | the fact that, following the merger, the actual results of the combined company could differ materially from the expectations set forth in this proxy statement/prospectus and the documents incorporated by reference depending on additional factors such as: |
• | the combined company’s cost of capital; | ||
• | the ability of the combined company to identify and implement cost savings, synergies and efficiencies in the time frame needed to achieve these expectations; | ||
• | the combined company’s actual capital needs, the absence of any material incident of property damage or other hazard that could affect the need to effect capital expenditures and any currently unforeseen merger or acquisition opportunities that could affect capital needs; and | ||
• | the costs incurred in implementing synergies including, but not limited to, our ability to terminate, amend or renegotiate prior contractual commitments of Helix and Remington. |
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Net Revenues | $ | 799,472 | $ | 543,392 | $ | 396,269 | $ | 302,705 | $ | 227,141 | ||||||||||
Gross Profit | 283,072 | 171,912 | 92,083 | 53,792 | 66,911 | |||||||||||||||
Equity in Earnings (Losses) of Investments | 13,459 | 7,927 | (87 | ) | — | — | ||||||||||||||
Net Income Before Change in Accounting Principle | 152,568 | 82,659 | 33,678 | 12,377 | 28,932 | |||||||||||||||
Cumulative Effect of Change in Accounting Principle, net | — | — | 530 | — | — | |||||||||||||||
Net Income | 152,568 | 82,659 | 34,208 | 12,377 | 28,932 | |||||||||||||||
Preferred Stock Dividends and Accretion | 2,454 | 2,743 | 1,437 | — | — | |||||||||||||||
Net Income Applicable to Common Shareholders | 150,114 | 79,916 | 32,771 | 12,377 | 28,932 | |||||||||||||||
Earnings per Common Share (1) | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Earnings per Share Before Change in Accounting Principle | 1.94 | 1.05 | 0.43 | 0.17 | 0.45 | |||||||||||||||
Cumulative Effect of Change in Accounting Principle | — | — | 0.01 | — | — | |||||||||||||||
Earnings Per Share | 1.94 | 1.05 | 0.44 | 0.17 | 0.45 | |||||||||||||||
Diluted: | ||||||||||||||||||||
Net Income Before Change in Accounting Principle | 1.86 | 1.03 | 0.43 | 0.17 | 0.44 | |||||||||||||||
Cumulative Effect of Change in Accounting Principle | — | — | 0.01 | — | — | |||||||||||||||
Earnings Per Share | 1.86 | 1.03 | 0.44 | 0.17 | 0.44 | |||||||||||||||
Total Assets | 1,660,864 | 1,038,758 | 882,842 | 840,010 | 494,296 | |||||||||||||||
Long-Term Debt (including current maturities of long-term debt). | 447,171 | 148,560 | 222,831 | 227,777 | 99,548 | |||||||||||||||
Convertible Preferred Stock | 55,000 | 55,000 | 24,538 | — | — | |||||||||||||||
Shareholders’ Equity | 629,300 | 485,292 | 381,141 | 337,517 | 226,349 |
(1) | All earnings per share information reflects a two-for-one stock split effective as of the close of business on December 8, 2005. |
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2005 | 2004 | 2003 | 2002 | 2001(1) | ||||||||||||||||
(In thousands, except prices, volumes and per share data) | ||||||||||||||||||||
Financial | ||||||||||||||||||||
Total revenue | $ | 270,529 | $ | 234,129 | $ | 183,052 | $ | 104,866 | $ | 116,620 | ||||||||||
Net income | $ | 70,567 | $ | 60,996 | $ | 42,924 | $ | 11,332 | $ | 8,344 | ||||||||||
Basic income per share | $ | 2.48 | $ | 2.23 | $ | 1.61 | $ | 0.45 | $ | 0.38 | ||||||||||
Diluted income per share | $ | 2.37 | $ | 2.14 | $ | 1.53 | $ | 0.42 | $ | 0.35 | ||||||||||
Total assets | $ | 586,065 | $ | 453,114 | $ | 359,385 | $ | 288,993 | $ | 240,432 | ||||||||||
Bank debt | $ | — | $ | — | $ | 18,000 | $ | 37,400 | $ | 71,000 | ||||||||||
Stockholders’ equity. | $ | 404,159 | $ | 313,960 | $ | 241,877 | $ | 193,660 | $ | 125,338 | ||||||||||
Total shares outstanding | 28,757 | 27,849 | 26,912 | 26,236 | 22,651 | |||||||||||||||
Cash flow | ||||||||||||||||||||
Net cash flow from operations | $ | 160,819 | $ | 188,582 | $ | 153,215 | $ | 71,420 | $ | 99,025 | ||||||||||
Net cash flow used in investing | $ | (189,906 | ) | $ | (148,908 | ) | $ | (115,714 | ) | $ | (92,126 | ) | $ | (119,242 | ) | |||||
Net cash flow provided by (used in) financing | $ | 9,288 | $ | (12,423 | ) | $ | (21,022 | ) | $ | 16,258 | $ | 21,463 | ||||||||
Operational | ||||||||||||||||||||
Proved reserves(2) | ||||||||||||||||||||
Oil (MBbls) | 18,381 | 16,899 | 11,619 | 13,114 | 13,865 | |||||||||||||||
Gas (MMcf) | 168,659 | 150,699 | 142,432 | 124,967 | 111,920 | |||||||||||||||
Standardized measure of discounted future net cash flows – end of year (2) | $ | 1,236,983 | $ | 638,849 | $ | 486,296 | $ | 351,042 | $ | 199,983 | ||||||||||
Average sales price(3) | ||||||||||||||||||||
Oil (per Bbl) | $ | 51.24 | $ | 39.37 | $ | 29.43 | $ | 24.27 | $ | 23.29 | ||||||||||
Gas (per Mcf) | $ | 8.31 | $ | 5.97 | $ | 5.40 | $ | 3.35 | $ | 4.02 | ||||||||||
Average production (net sales volume) | ||||||||||||||||||||
Oil (Bbls per day) | 4,066 | 4,588 | 4,863 | 4,736 | 3,378 | |||||||||||||||
Gas (Mcf per day) | 60,715 | 76,869 | 66,160 | 47,804 | 58,265 |
(1) | Financial results for 2001 include a $13.5 million charge for the final settlement of the Phillips Petroleum litigation. | |
(2) | The quantities of proved oil and gas reserves include only the amounts which Remington reasonably expects to recover in the future from known oil and gas reservoirs under the current economic and operating conditions. Proved reserves include only quantities that Remington can commercially recover using current prices, costs, and existing regulatory practices and technology. Remington bases the standardized measure of future discounted net cash flows on year-end prices and costs. Any changes in future prices, costs, regulations, technology, or other unforeseen factors could significantly increase or decrease the proved reserve estimates. |
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(3) | Remington has not entered into any financial or commodity hedges for oil or gas prices during any of the years presented, therefore, the average sales prices represent actual sales revenue per barrel or Mcf. |
Year Ended | ||||
December 31, 2005 | ||||
(In thousands, except per share amounts) | ||||
Statement of Operations data: | ||||
Net revenues and other income | $ | 1,067,772 | ||
Net income | 163,553 | |||
Net Income applicable to common shareholders | 161,099 | |||
Earnings per common share: | ||||
Basic (1) | $ | 1.78 | ||
Diluted (1) | $ | 1.72 | ||
Balance Sheet data: | ||||
Total assets | $ | 3,489,202 | ||
Long term debt (including current maturities of long-term debt) | 1,261,395 | |||
Convertible preferred stock | 55,000 | |||
Shareholders’ equity | 1,187,836 |
(1) | Reflects two-for-one stock split effected as a 100% stock dividend on December 8, 2005. |
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Year Ended | ||||
December 31, 2005 | ||||
Helix historical (1) | ||||
Net Income applicable to common shareholders – basic | $ | 1.94 | ||
Net Income applicable to common shareholders – diluted | 1.86 | |||
Cash dividends | 0.00 | |||
Book value at end of period | 8.10 | |||
Helix pro forma combined (1) | ||||
Net Income applicable to common shareholders – basic | $ | 1.78 | ||
Net Income applicable to common shareholders – diluted | 1.72 | |||
Cash dividends | 0.00 | |||
Book value at end of period | 13.08 | |||
Remington historical | ||||
Net Income applicable to common shareholders – basic | $ | 2.48 | ||
Net Income applicable to common shareholders – diluted | 2.37 | |||
Cash dividends | 0.00 | |||
Book value at end of period | 14.05 | |||
Remington pro forma (equivalent) (2) | ||||
Net Income applicable to common shareholders – basic | $ | 0.78 | ||
Net Income applicable to common shareholders – diluted | 0.75 | |||
Cash dividends | 0.00 | |||
Book value at end of period | 5.70 |
(1) | Reflects the two-for-one stock split effected as a 100% stock dividend on December 8, 2005. | |
(2) | Does not reflect the $27.00 in cash per share of Remington common stock to be received as part of the merger consideration. |
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Closing Price Per Share | ||||||||
January 20, 2006 | [ ], 2006 | |||||||
Helix common stock | $ | 44.33 | $ | |||||
Remington common stock | $ | 37.96 | $ | |||||
Remington Merger Consideration Equivalent | $ | 46.33 | $ |
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• | to consider and vote upon a proposal to approve and adopt the merger agreement; | ||
• | to consider and vote upon a proposal to adjourn or postpone the special meeting, if necessary, to solicit additional proxies in favor of the approval and adoption of the merger agreement; and | ||
• | to consider and transact any other business as may properly be brought before the special meeting or any adjournments or postponements thereof. |
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• | completing, signing and timely submitting a new proxy to the addressee indicated on the pre-addressed envelope enclosed with your initial proxy card by the close of business on [ ], 2006; the latest dated and signed proxy actually received by such addressee before the special meeting will be counted, and any earlier proxies will be considered revoked; | ||
• | notifying Remington’s Corporate Secretary, at 8201 Preston Road, Suite 600, Dallas, Texas 75225-6201, in writing, by the close of business on [ ], 2006, that you have revoked your earlier proxy; or | ||
• | voting in person at the special meeting. |
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• | the merger consideration of $27.00 in cash plus 0.436 of a share of Helix common stock, with a combined value equal to $46.33 per share of Remington common stock based upon the closing price of Helix common stock as reported on the Nasdaq National Market January 20, 2006, the last trading day prior to the date of the public announcement of the merger, represents: |
• | a premium of $8.44, or approximately 22.28%, over the trailing average closing price of $37.89 per share for Remington’s common stock as reported on the NYSE composite transaction reporting system for the 30 trading days ended January 20, 2006; | ||
• | a premium of $8.75, or approximately 23.28%, over the trailing average closing price of $37.58 per share for Remington’s common stock as reported on the NYSE composite transaction reporting system for the five trading days ended January 20, 2006; and | ||
• | a premium of $8.37, or approximately 22.05%, over the closing sale price of $37.96 for Remington’s common stock as reported on the NYSE composite transaction reporting system on January 20, 2006, the last trading day prior to the date of the public announcement of the proposed merger; |
• | the financial presentation of Jefferies, including its opinion dated January 22, 2006, to the Remington board of directors as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration, as more fully described below under “— Opinion of Remington’s Financial Advisor”; | ||
• | the Remington board of directors’ familiarity with, and understanding of, Remington’s business, financial condition, results of operations, current business strategy, earnings and prospects, and its understanding of Helix’s business, financial condition, results of operations, business strategy and earnings (including the report of Remington’s management on the results of its due diligence review of Helix); | ||
• | the possible alternatives to the merger, including: |
• | other acquisition or combination possibilities for Remington; | ||
• | the possibility of continuing to operate as an independent oil and gas exploration and production company under its current model focused in the Gulf of Mexico; and | ||
• | adopting a more broad-based but also more risky strategy possibly involving acquisitions and an international component; |
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• | the range of possible benefits to Remington’s stockholders of those alternatives and the timing and likelihood of accomplishing the goal of any of those alternatives, and the board’s assessment that the merger with Helix presents an opportunity superior to those alternatives; | ||
• | the fact that Remington stockholders will receive a substantial cash payment for their shares, while at the same time retaining a large equity stake in the combined company, which will afford Remington stockholders the opportunity to participate in the future financial performance of a larger, more diversified energy and energy services company; in that regard, the Remington board of directors understood that the volatility of prices for oil and gas would cause the value of the merger consideration to fluctuate, perhaps significantly, but was of the view that on a long-term basis it would be desirable for stockholders to have an opportunity to retain some continuing investment in the post-merger combined company; | ||
• | the Remington board of directors’ understanding, following its review together with Remington’s management and financial advisors, of overall market conditions, including then-current and prospective commodity prices and recent trading prices for Remington’s common stock, and the board’s determination that, in light of these factors, the timing of a potential transaction was favorable to Remington and its stockholders; | ||
• | the Remington board of directors’ understanding, and management’s review, of Remington’s current and prospective holdings, including Remington’s oil and gas reserves in the Gulf of Mexico, and the Remington board of directors’ and management’s views concerning maximizing the future benefits relating to these holdings in light of Remington’s size and position in the oil and gas industry, together with their belief that having ready access to Helix’s resources and expertise in the offshore oil and gas services industry would be a major factor in maximizing those future benefits; | ||
• | the consideration by the Remington board of directors, with the assistance of its advisors, of the general terms and conditions of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations as well as the likelihood of consummation of the merger, the proposed transaction structure, the termination provisions of the agreement and the Remington board of directors’ evaluation of the likely time period necessary to close the transaction; and | ||
• | the expectation that the merger would qualify as a reorganization for federal income tax purposes. |
• | the risks of the type and nature described under “Risk Factors” beginning on page 14; | ||
• | because the merger agreement provides for a fixed exchange ratio, if the price of Helix common stock at the time of the closing of the merger is lower than the price as of the time of signing the merger agreement, the value received by holders of Remington common stock in the merger could be materially less than the value as of the date of the merger agreement; | ||
• | the risk, which is common in transactions of this type, that the terms of the merger agreement, including provisions relating to Helix’s right to obtain information with respect to any alternative proposals and to a three business day negotiating period after receipt by Remington of a superior proposal and Remington’s payment of a termination fee under specified circumstances, might discourage other parties that could otherwise have an interest in a business combination with, or an acquisition of, Remington from proposing such a transaction; | ||
• | the interests of certain of Remington’s executive officers and directors described under “Interests of Remington Directors and Executive Officers in the Merger” beginning on page 50; | ||
• | the restrictions on the conduct of Remington’s business prior to the consummation of the merger, requiring Remington to conduct its business in the ordinary course consistent with past practice subject to specific limitations, which may delay or prevent Remington from undertaking business opportunities that may arise pending completion of the merger; and |
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• | the risks and contingencies related to the announcement and pendency of the merger, the possibility that the merger will not be consummated and the potential negative effect of public announcement of the merger on Remington’s business and relations with customers and service providers, operating results and stock price and Remington’s ability to retain key management and personnel. |
• | The transaction is expected to be accretive to earnings and cash flow; | ||
• | Remington’s prospect generation based growth strategy is highly complementary to Helix’s production model and will build on Helix’s existing portfolio of proved undeveloped reserves by: |
• | creating extra exploitation value through the deployment of Helix assets for drilling, development, | ||
maintenance and abandonment; | |||
• | accelerating high impact, ready to drill inventory; | ||
• | adding 4 Tcfe reserve potential (1 Tcfe risked); and | ||
• | providing 100% working interest in all deepwater prospects; |
• | Remington possesses a highly experienced technical team; | ||
• | Exploitation of Remington’s prospect inventory will provide increased backlog for Helix’s contracting services; | ||
• | Combined Helix and Remington production business on the Outer Continental Shelf has critical mass, including: |
• | operating synergies and purchasing leverage; and | ||
• | Remington’s seismic library, which can be used across Helix assets; and |
• | Helix can enhance financial results of key deepwater prospects by promoting partnership arrangements. |
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• | reviewed a draft of the merger agreement dated January 22, 2006, participated in certain limited negotiations concerning the merger among representatives of Remington and Helix and discussed with the officers of Remington the course of other negotiations with Helix; | ||
• | reviewed certain financial and other information about Remington and Helix that was publicly available and that Jefferies deemed relevant; | ||
• | reviewed certain internal financial and operating information, including financial projections relating to Remington that were provided to Jefferies by Remington, taking into account (a) the growth prospects of Remington, (b) Remington’s historical and current fiscal year financial performance and track record of meeting its forecasts, and (c) Remington’s forecasts going forward and its ability to meet them; | ||
• | reviewed the corporate budget of Helix for 2006; | ||
• | met with Remington’s and Helix’s managements regarding the business prospects, financial outlook and operating plans of Remington and Helix, respectively, and held discussions concerning the impact on Remington and Helix and their prospects of the economy and the conditions in Remington’s industry; | ||
• | reviewed the market prices and valuation multiples for the common stock of Remington and Helix, respectively; | ||
• | compared the valuation in the public market of companies Jefferies deemed similar to that of Remington in market, services offered, and size; | ||
• | reviewed public information concerning the financial terms of certain recent transactions that Jefferies deemed comparable to the merger; | ||
• | performed a discounted cash flow analysis to analyze the present value of the future cash flow streams that Remington has indicated it expects to generate; | ||
• | reviewed certain proved oil and gas reserve data furnished to Jefferies by Remington and Helix, including the 2004 year end reserve reports for Remington and Helix, respectively, prepared by independent reserve engineers as well as internal 2005 year end projected reserve information of Remington and Helix furnished to Jefferies by Remington and Helix, respectively; and | ||
• | reviewed the potential pro forma impact of the merger. |
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• | did not conduct a physical inspection of the properties and facilities of Remington or Helix, nor were they furnished, any reports of physical inspections; | ||
• | did not make or obtain, nor were they furnished, any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Remington or Helix (other than the reserve reports referred to in the opinion); | ||
• | did not assume any responsibility to obtain any such evaluations, appraisals or inspections for Remington or Helix; and | ||
• | did not evaluate the solvency or fair value of Remington or Helix under any state or federal laws relating to bankruptcy, insolvency or similar matters. |
• | the final form of the merger agreement would be substantially similar to the last draft they reviewed; | ||
• | the merger will be consummated in accordance with the terms described in the merger agreement, without any amendments thereto, and without waiver by Remington of any of the conditions to Helix’s obligations; | ||
• | there was not as of the date of the opinion, and there will not as a result of the consummation of the transactions contemplated by the merger agreement be, any default or event of default under any indenture, credit agreement or other material agreement or instrument to which Remington or Helix or any of their respective subsidiaries or affiliates is a party; | ||
• | in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including divestiture requirements or amendments or modifications, will be imposed that will have a material adverse effect on the contemplated benefits of the merger; and | ||
• | all material assets and liabilities (contingent or otherwise, known or unknown) of Remington are as set forth in its consolidated financial statements provided to Jefferies by Remington. |
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• | Discounted Cash Flow Analysis; | ||
• | Discounted Equity Value Analysis; | ||
• | Comparable Company Analysis; and | ||
• | Precedent Transaction Analysis. |
Implied Price Range | ||||
Methodology | (per share) | |||
Discounted Cash Flow Analysis | $43.18 to $52.90 | |||
Discounted Equity Value Analysis (NYMEX Pricing) | $42.61 to $60.15 | |||
Discounted Equity Value Analysis (Flat Pricing) | $26.12 to $40.57 | |||
Comparable Company Analysis | $36.79 to $44.96 | |||
Precedent Transactions Analysis | $29.00 to $43.27 | |||
52-Week Range of Remington Common Stock | $24.73 to $42.59 | |||
3-Year Range of Remington Common Stock | $16.75 to $42.59 | |||
Implied Merger Consideration: $46.33 per share |
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Implied Price Range | ||||
Pricing Scenario | (per share) | |||
NYMEX forward pricing curve | $42.61 to $60.15 | |||
Flat pricing | $26.12 to $40.57 |
• | estimated 2006 EBITDA based on the NYMEX forward price curve; | ||
• | estimated 2006 EBITDA based on First Call pricing of $56.52 per barrel of oil and $8.72 per thousand cubic feet of gas; | ||
• | proved oil and gas reserves (in $per billion of cubic feet equivalents, or $/Bcfe); and | ||
• | daily oil and gas production (in $per million of cubic feet equivalents per day, or $/Mmcfe per day). |
• | ATP Oil & Gas Corporation; | ||
• | Bois d’Arc Energy Inc.; | ||
• | Callon Petroleum Company; | ||
• | Energy Partners Limited; | ||
• | The Houston Exploration Company; |
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• | Newfield Exploration Company; | ||
• | Stone Energy Corporation; and | ||
• | W&T Offshore, Inc. |
• | oil and gas production (in $/Mmcfe per day); and | ||
• | proved oil and gas reserves (in $/Mmcfe). |
Purchaser | Seller | |
Mariner Energy, Inc. | Forest Oil Corporation | |
Woodside Petroleum Ltd. | Gryphon Exploration Company | |
Helix | Murphy Oil Corporation | |
Nippon Oil Corporation | Devon Energy Corporation | |
Sumitomo Corporation | NCX Company, Inc. | |
Stone Energy Corporation | Anadarko Petroleum Corporation | |
Undisclosed | ChevronTexaco Corporation | |
The Houston Exploration Company | Undisclosed | |
Apache Corporation/Morgan Stanley | Anadarko Petroleum Corporation | |
Newfield Exploration Company | Denbury Resources Inc. |
Purchaser | Seller | |
Marubeni Corp. | Devon Energy Corporation | |
Statoil (U.K.) Limited | EnCana Corporation | |
Norsk Hydro ASA | Spinnaker Exploration Company |
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• | McDermott International Inc.; | ||
• | Oceaneering International, Inc.; | ||
• | Gulfmark Offshore, Inc.; | ||
• | Superior Energy Services, Inc.; | ||
• | TETRA Technologies, Inc.; | ||
• | Global Industries Ltd.; | ||
• | Stolt Offshore S.A.; | ||
• | Technip; and | ||
• | Saipem S.P.A. |
• | price per estimated 2006 earnings, or Price/2006 Earnings; | ||
• | price per estimated 2006 cash flows per share, or Price/2006 CFPS; and | ||
• | enterprise value per estimated 2006 EBITDA, or Enterprise Value/2006 EBITDA. |
Benchmark | High | Low | Mean(1) | Helix | ||||
Price/2006 Earnings | 24.9x | 12.5x | 19.0x | 15.6x | ||||
Price/2006 CFPS | 17.7x | 8.2x | 11.7x | 9.7x | ||||
Enterprise Value/2006 EBITDA | 12.7x | 6.8x | 9.3x | 7.5x |
(1) | Excludes Helix |
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Value of | Value of | |||||||||||||||
Stock | Stock | Restricted | Restricted | |||||||||||||
Name and Principal Position | Options | Options | Stock | Stock | ||||||||||||
James A. Watt, | 78,473 | $ | 1,938,849 | 93,240 | $ | 3,953,376 | ||||||||||
Chairman and Chief Executive Officer | ||||||||||||||||
Robert P. Murphy, | 38,597 | $ | 1,489,074 | 68,280 | $ | 2,895,072 | ||||||||||
President and Chief Operating Officer | ||||||||||||||||
Gregory B. Cox, | 23,677 | $ | 578,353 | 38,680 | $ | 1,640,032 | ||||||||||
Senior Vice President/Exploration | ||||||||||||||||
Steven J. Craig, | — | $ | — | 33,640 | $ | 1,426,336 | ||||||||||
Senior Vice President/Planning and Administration | ||||||||||||||||
Frank T. Smith, Jr., | 25,000 | $ | 462,750 | 33,480 | $ | 1,419,552 | ||||||||||
Senior Vice President/Finance and Secretary | ||||||||||||||||
John E. Goble, Jr., | 60,834 | $ | 1,859,367 | 24,960 | $ | 1,058,304 | ||||||||||
Director | ||||||||||||||||
William E. Greenwood, | 135,000 | $ | 4,545,113 | 24,960 | $ | 1,058,304 | ||||||||||
Director | ||||||||||||||||
David E. Preng, | — | $ | — | 24,960 | $ | 1,058,304 | ||||||||||
Director | ||||||||||||||||
Thomas W. Rollins, | 110,000 | $ | 3,710,113 | 24,960 | $ | 1,058,304 | ||||||||||
Director | ||||||||||||||||
Alan C. Shapiro, | 47,500 | $ | 1,345,675 | 24,960 | $ | 1,058,304 | ||||||||||
Director |
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• | he will receive a lump sum cash payment equal to 2.99 times the sum of (A) his then current base salary and (B) his maximum annual incentive opportunity; | ||
• | all stock options, restricted stock and other equity compensation awards granted to him will be subject to the terms of the grant agreement and plan under which they were granted; | ||
• | for a period of three years, or until he gains new employment with substantially similar benefits, Helix will provide him with medical and dental benefits for him and his immediate family; | ||
• | Helix will provide 12 months of out-placement services; | ||
• | all non-qualified deferred compensation benefits will be immediately vested and subject to immediate distribution, subject to applicable provisions of tax law; and | ||
• | he will receive a gross-up payment for any excise taxes imposed by Sections 409A or 4999 of the Internal Revenue Code. |
• | Officers and Select Exempt Employees, other than Mr. Watt and Mr. Murphy; and | ||
• | Other Exempt Employees and Non-Exempt Employees. |
• | he or she will receive a lump sum cash payment equal to two times the sum of (A) his or her then current base salary and (B) his or her maximum annual incentive opportunity; | ||
• | all stock options, restricted stock and other equity compensation awards granted to him or her will be subject to the terms of the grant agreement and plan under which they were granted; | ||
• | for a period of two years, or until he or she gains new employment with substantially similar benefits, Helix will provide him or her with medical and dental benefits for him or her and his or her immediate family; | ||
• | Helix will provide 12 months of out-placement services; | ||
• | all non-qualified deferred compensation benefits will be immediately vested and subject to immediate distribution, subject to applicable provisions of tax law; and |
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• | he or she will receive a gross-up payment for any excise taxes imposed by Sections 409A or 4999 of the Internal Revenue Code. |
• | he or she will receive a lump sum cash payment equal to the greater of six months base pay or one month’s base salary for each year of service up to nine months base pay; | ||
• | all stock options, restricted stock and other equity compensation awards granted to him or her shall be subject to the terms of the grant agreement and plan under which they were granted; | ||
• | for a period of the greater of six months or one month for each year of service up to nine months, Helix shall provide him or her with medical and dental benefits for him or her and his or her immediate family; and | ||
• | he or she shall receive a gross-up payment for any excise taxes imposed by Sections 409A or 4999 of the Internal Revenue Code. |
Executive Officer | Cash Severance Payments | |||
James A. Watt | $ | 4,485,000 | ||
Robert P. Murphy | $ | 2,616,250 | ||
Gregory B. Cox | $ | 900,000 | ||
Steven J. Craig | $ | 720,000 | ||
Frank T. Smith, Jr. | $ | 738,000 |
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• | an individual U.S. citizen or resident alien; | ||
• | a corporation, partnership or other entity created or organized under U.S. law (federal or state); | ||
• | an estate whose worldwide income is subject to U.S. federal income tax; or | ||
• | a trust if a court within the United States of America is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. |
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• | the amount of cash received pursuant to the merger (excluding any cash received in lieu of fractional shares of Helix), and | ||
• | the amount, if any, by which the sum of the fair market value of the Helix shares as of the effective time of the merger and the amount of cash received pursuant to the merger for these Remington shares exceeds the U.S. holder’s adjusted tax basis in these Remington shares. |
• | reduced by |
• | the portion of his or her adjusted tax basis in those Remington shares that is allocable to a fractional share of Helix shares for which cash is received, and | ||
• | the amount of cash received by him or her for these Remington shares in the merger, and |
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• | increased by the amount of gain (including the portion of this gain that is treated as a dividend as described above) recognized by him or her in the exchange (but not by any gain recognized upon the receipt of cash in lieu of a fractional share of Helix shares pursuant to the merger). |
• | the taxpayer identification number provided is correct or that the holder is awaiting a taxpayer identification number, and | ||
• | the holder is not subject to backup withholding because |
• | the holder is exempt from backup withholding, | ||
• | the holder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of the failure to report all interest or dividends, or | ||
• | the Internal Revenue Service has notified the holder that he is no longer subject to backup withholding. |
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• | corporate organization, qualification and good standing and organizational power; | ||
• | ownership of equity interests; | ||
• | corporate power and authority to enter into the merger agreement, and due execution, delivery and enforceability of the merger agreement; | ||
• | absence of a breach of charter documents, bylaws, material agreements, instruments or obligations, or applicable law as a result of the merger; | ||
• | consents, approvals, orders, authorizations, registrations, declarations, filings and permits required to enter into the merger agreement or to complete the transactions contemplated by the merger agreement; | ||
• | timely and accurate filings with the Securities and Exchange Commission in compliance with applicable rules and regulations; | ||
• | financial statements; | ||
• | capital structure; | ||
• | absence of undisclosed liabilities; | ||
• | absence of specified adverse changes or events since September 30, 2005; | ||
• | material contracts; | ||
• | compliance with laws, material agreements and permits; | ||
• | governmental regulation; | ||
• | material litigation, material judgments or injunctions and absence of undisclosed investigations or litigation; |
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• | absence of certain restrictive agreements or arrangements; | ||
• | tax matters; | ||
• | employee benefit plans and labor matters; | ||
• | employee contracts and benefits; | ||
• | insurance matters; | ||
• | intellectual property; | ||
• | title to assets; | ||
• | oil and gas operations; | ||
• | environmental matters; | ||
• | books and records; | ||
• | brokers and finders’ fees; | ||
• | affiliate transactions; | ||
• | disclosure controls and procedures and internal control over financial reporting; | ||
• | derivative transactions and hedging; | ||
• | required vote of stockholders to approve the merger/absence of vote required by Helix shareholders; | ||
• | recommendation of Remington board of directors and opinion of financial advisor; | ||
• | funding for the merger; | ||
• | interim operation of Merger Sub; | ||
• | absence of imbalances; | ||
• | absence of preferential purchase rights; | ||
• | absence of tax partnerships; | ||
• | royalties; | ||
• | inapplicability of Delaware anti-takeover statute; and | ||
• | earnings announcement by Remington. |
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• | amend its certificate or articles of incorporation, bylaws or other organizational documents; | ||
• | adjust, split, combine or reclassify any of its outstanding capital stock; | ||
• | declare, set aside or pay any dividends or other distributions (whether payable in cash, property or securities) with respect to its capital stock; | ||
• | issue, sell or agree to issue or sell any securities or other equity interests, including its capital stock, any rights, options or warrants to acquire its capital stock, or securities (other than shares of Remington common stock issued pursuant to the exercise of any Remington stock option outstanding on the date of the merger agreement, or issued under grants or awards outstanding pursuant to Remington benefit plans in existence on the date of the merger agreement); | ||
• | purchase, cancel, retire, redeem or otherwise acquire any of its outstanding capital stock or other securities or other equity interests, except pursuant to the terms of the Remington benefit plans in effect as of the date of the merger agreement; | ||
• | merge or consolidate with, or transfer all or substantially all of its assets to, any other person (other than the merger contemplated in this proxy statement/prospectus); | ||
• | liquidate, wind-up or dissolve; | ||
• | acquire any corporation, partnership or other business entity or any interest therein (other than interests in joint ventures, joint operation or ownership arrangements or tax partnerships acquired in the ordinary course of business); | ||
• | sell, lease or sublease, transfer or otherwise dispose of or mortgage, pledge or otherwise encumber any oil and gas interests of Remington that have a value in excess of $25 million, individually, or any other assets that have a value at the time of such sale, lease, sublease, transfer or disposition in excess of $25 million, individually, except that this clause shall not apply to: |
• | the sale of hydrocarbons in the ordinary course of business or | ||
• | encumbrances under the Remington credit agreement; |
• | farm-out any oil and gas interest of Remington having a value in excess of $10 million or interest therein; | ||
• | sell, transfer or otherwise dispose of or mortgage, pledge or otherwise encumber any securities of any other person (including any capital stock or other securities or equity interest in any subsidiary of Remington); | ||
• | make any loans, advances or capital contributions to, or investments in, any person (other than advances in the ordinary course of business); | ||
• | enter into any material agreement or any other agreement not terminable by Remington or any of its subsidiaries upon notice of 30 days or less and without penalty or other obligation; |
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• | permit to be outstanding at any time under Remington’s credit agreement indebtedness for borrowed money in excess of $50 million, exclusive of any indebtedness incurred to fund costs relating to the transactions contemplated under the merger agreement; | ||
• | incur any indebtedness for borrowed money other than under trade credit vendor lines not exceeding $50 million in the aggregate or under Remington’s credit agreement; | ||
• | incur any other obligation or liability (other than liabilities incurred in the ordinary course of business); | ||
• | assume, endorse (other than endorsements of negotiable instruments in the ordinary course of business), guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the liabilities or obligations of any other person; | ||
• | enter into, or otherwise become liable or obligated under or pursuant to, or amend or extend: |
• | any employee benefit, pension or other plan (whether or not subject to ERISA), | ||
• | any other stock option, stock purchase, incentive or deferred compensation plan or arrangement or other fringe benefit plan, or | ||
• | any consulting, employment, severance, termination or similar agreement with any Person; |
• | except for payments made pursuant to any Remington benefit plan or certain other plans, agreements or arrangements, grant, or otherwise become liable for or obligated to pay, any severance or termination payment, bonus or increase in compensation or benefits (other than payments, bonuses or increases that are mandated by the terms of agreements existing as of the date of the merger agreement) to, or forgive any indebtedness of, any employee or consultant of any of Remington or its subsidiaries; | ||
• | enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing; | ||
• | voluntarily resign, transfer or otherwise relinquish any right it has as of the date of the merger agreement, as operator of any oil and gas interest of Remington, except as required by law, regulation or contract; | ||
• | create, incur, assume or permit to exist any lien on any of its assets, except for certain encumbrances which are permitted under the merger agreement: or | ||
• | engage in any practice, take any action or permit by inaction any of the representations and warranties of Remington contained in the merger agreement to become untrue. |
• | operate, maintain and otherwise deal with the oil and gas interests of Remington in accordance with good and prudent oil and gas field practices and in accordance with all applicable oil and gas leases and other contracts and agreements and all applicable laws, rules and regulations; | ||
• | keep and maintain accurate books, records and accounts; | ||
• | maintain in full force and effect the policies or binders of insurance described in Remington’s representations and warranties concerning insurance maters in the merger agreement; | ||
• | pay all taxes, assessments and other governmental charges imposed upon any of their assets or with respect to their franchises, business, income or assets before any penalty or interest accrues thereon; | ||
• | pay all material claims (including claims for labor, services, materials and supplies) that have become due and payable and which by law have or may become a lien upon any of their assets prior to the time when any penalty or fine shall be incurred with respect thereto or any such lien shall be imposed thereon; | ||
• | comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, obtain or take all governmental actions necessary in the operation of their |
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businesses, and comply with and enforce the provisions of all of their material agreements, including paying when due all rentals, royalties, expenses and other liabilities relating to their businesses or assets; |
• | preserve and keep in full force and effect their corporate existence and rights and franchises material to their performance under the merger agreement, except where the failure to do so would not have a material adverse effect (as defined in the merger agreement) on Remington; and | ||
• | upon the request by Helix to Remington prior to the effective time of the merger, and subject to the limitations in Remington’s credit agreement, enter into financial hedges for up to 50% of hydrocarbon production attributable to the proved developed producing reserves that Remington and its subsidiaries estimate will be produced before July 1, 2007 if Helix and Remington mutually agree that such hedges are reasonably prudent to protect Helix’s expected acquisition economics and Remington’s expected economics. |
• | amend its certificate or articles of incorporation, bylaws or other organizational documents; | ||
• | adjust, split, combine or reclassify any of its outstanding capital stock; | ||
• | declare, set aside or pay any dividends or other distributions (whether payable in cash, property or securities) with respect to its capital stock; | ||
• | issue, sell or agree to issue or sell any securities or other equity interests, including its capital stock, any rights, options or warrants to acquire its capital stock, or securities convertible into or exchangeable or exercisable for its capital stock (other than shares of Helix common stock issued pursuant to the terms of any Helix benefit plan in existence on the date of the merger agreement, including, without limitation, Helix common stock issued pursuant to the exercise of any Helix stock option issued under any of such Helix benefit plans); | ||
• | purchase, cancel, retire, redeem or otherwise acquire any of its outstanding capital stock or other securities or other equity interests, except pursuant to the terms of the Helix benefit plans in effect as of the date of the merger agreement; | ||
• | merge or consolidate with, or transfer all or substantially all of its assets to, any other person, or permit any of its subsidiaries to merge or consolidate with, or transfer all or substantially all of its assets to, any other person (in each case other than the merger contemplated in this proxy statement/prospectus and other than any merger or consolidation of a wholly owned direct or indirect subsidiary of Helix with and into Helix in which Helix is the surviving corporation); | ||
• | liquidate, wind-up or dissolve; or | ||
• | enter into, or with regard to merger, consolidations or transfers of all or substantially all of the assets of a subsidiary of Helix permit such subsidiary to enter into, any contract, agreement, commitment or arrangement with respect to any of the foregoing. |
• | acquire any corporation, partnership or other business entity or any interest therein (other than interests in joint ventures, joint operation or ownership arrangements or tax partnerships acquired in the ordinary course of business) having an acquisition price in excess of $50 million; | ||
• | sell, lease or sublease, transfer or otherwise dispose of assets that have a value at the time of such sale, lease, sublease, transfer or disposition in excess of $50 million, individually (except that this clause shall not apply to the sale of hydrocarbons, storage capacity, pipeline transportation capacity, or processing |
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capacity in the ordinary course of business) or the disposition of vessels so long as individually or in the aggregate such dispositions are not material to the operations of Helix’s services segment; |
• | sell, transfer or otherwise dispose of any equity securities of any subsidiary of Helix; or | ||
• | engage in any practice, take any action or permit by inaction any of the representations and warranties of Helix contained in the merger agreement to become untrue. |
• | preserve and keep in full force and effect the corporate existence and rights and franchises material to their performance under the merger agreement, and will cause each of its subsidiaries to do the same, except where the failure to do so would not have a material adverse effect (as defined in the merger agreement) on Helix. |
• | solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, any acquisition proposal (as defined below); | ||
• | engage in discussions or negotiations with, furnish or disclose any information or data relating to Remington or any of its subsidiaries to, or in response to a request therefor, give access to the properties, assets or the books and records of Remington or its subsidiaries to, any person that has made or, to the knowledge of Remington, may be considering making any acquisition proposal or otherwise in connection with an acquisition proposal; | ||
• | grant any waiver or release under any standstill or similar contract with respect to any Remington common stock or any properties or assets of Remington or its subsidiaries; | ||
• | approve, endorse or recommend any acquisition proposal; | ||
• | enter into any agreement in principle, arrangement, understanding or contract relating to any acquisition proposal; or | ||
• | take any action to exempt or make not subject to the provisions of the DGCL related to business combinations with interested stockholders or any other state takeover statute or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any person (other than Helix and its subsidiaries) or any action taken thereby, which person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom. |
• | any merger, reorganization, share exchange, take over bid, tender offer, recapitalization, consolidation, liquidation, dissolution or other business combination directly or indirectly involving Remington or its subsidiaries; | ||
• | the acquisition in any manner, directly or indirectly, of any business or group of assets that generates 10% or more of Remington’s consolidated net revenues, net income or stockholders’ equity, or assets representing 10% or more of the book value of the assets of Remington and its subsidiaries, taken as a whole, or any license, lease, long-term supply agreement, exchange, mortgage, pledge or other arrangement having a similar economic effect, in each case in a single transaction or a series of related transactions; or | ||
• | any direct or indirect acquisition of beneficial ownership of 10% or more of the shares of Remington common stock, whether in a single transaction or a series of related transactions. |
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• | Remington stockholders have not yet approved and adopted the merger agreement; | ||
• | Remington notifies Helix of its intent to take enter into a binding agreement concerning the superior proposal and attaches the most current version of such agreement; | ||
• | Remington gives Helix at least three business days after delivery of such notice to negotiate to make adjustments in the terms and conditions of the merger agreement described in this proxy statement/prospectus as will enable Remington to proceed with this merger; and | ||
• | Remington pays to Helix the sum of (i) Helix’s documented out of pocket fees and expenses incurred or paid by or on behalf of Helix in connection with the merger or the consummation of any of the transactions contemplated by the merger agreement, including all HSR Act filing fees, fees and expenses of counsel, commercial banks, investment banking firms, accountants, experts, environmental consultants, and other consultants to Helix, up to a maximum amount not to exceed $2 million, and (ii) $45 million. |
• | would, if consummated in accordance with its terms, be more favorable, from a financial point of view, to the holders of Remington common stock than the transactions contemplated by the merger agreement described in this proxy statement/prospectus (taking into account any amounts payable by Remington to Helix upon termination of the merger agreement ); | ||
• | contains conditions which are all reasonably capable of being satisfied in a timely manner; and | ||
• | is not subject to any financing contingency or to the extent financing for such proposal is required, that such financing is then committed. |
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• | in compliance with Rule 145 under the Securities Act of 1933; | ||
• | pursuant to an effective registration statement under the Securities Act of 1933; or | ||
• | in reliance upon an opinion of counsel reasonably acceptable to Helix, to the effect that the sale, transfer or other disposition is exempt from registration under the Securities Act of 1933. |
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• | convening and holding the Remington special meeting; | ||
• | preparing, filing and distributing this proxy statement/prospectus and filing the registration statement of which this proxy statement/prospectus is a part; | ||
• | providing access to information; | ||
• | using their best efforts regarding filings with and obtaining waivers, consents and approvals from governmental and other agencies and organizations, including HSR filings; provided, that neither Helix nor Remington is under any obligation to defend any litigation relating to the merger under federal or state antitrust laws or sell or dispose of any of their assets; | ||
• | providing notice of (i) any representation or warranty in the merger agreement becoming untrue or inaccurate, (ii) the occurrence of any event or development that would cause any representation or warranty to be untrue or inaccurate at the time of the closing of the merger or (iii) the failure to materially comply with or satisfy any covenant, condition or agreement in the merger agreement; | ||
• | making public announcements; | ||
• | payment of fees and expenses in connection with the merger; | ||
• | tax matters; | ||
• | matters related to Section 16 of the Exchange Act; | ||
• | Helix’s agreement to cause James A. Watt, one of the existing members of Remington’s board of directors, to be elected to the board of directors of Helix at the effective time of the merger; and | ||
• | listing of the shares of Helix common stock to be issued in connection with the merger on the Nasdaq National Market upon official notice of issuance. |
• | adoption of the merger agreement by the holders of at least a majority of the outstanding Remington shares entitled to vote at the Remington special meeting; | ||
• | receipt of consents, approvals, permits and authorizations of governmental authorities or other persons, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Act, required to consummate the transactions contemplated by the merger agreement except where the failure to obtain them would not have a material adverse effect (as defined in the merger agreement) on Helix or materially adversely affect the consummation of the merger; | ||
• | continued effectiveness of the registration statement of which this proxy statement/prospectus is a part, the absence of a stop order by the Securities and Exchange Commission suspending the effectiveness of the registration statement and the absence of any continuing action, suit, proceeding or investigation by the SEC to suspend such effectiveness; | ||
• | receipt of all necessary approvals under state securities laws relating to the issuance or trading of the Helix common stock to be issued in the merger; |
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• | absence of any temporary restraining order, preliminary or permanent injunction or other order issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger, so long as the parties have used their reasonable efforts to have any applicable decree, ruling, injunction or order vacated; | ||
• | approval for listing of the Helix shares to be issued in the merger on its stock exchange, upon official notice of issuance; and | ||
• | absence of Remington stockholders exercising their appraisal and dissenters rights with respect to greater than 8% of the outstanding shares of Remington common stock immediately prior to the effective time of the merger. |
• | accuracy as of the closing of the merger of the representations and warranties made by Remington to the extent specified in the merger agreement; | ||
• | Remington’s performance in all material respects of its covenants and agreements under the merger agreement; | ||
• | the absence of a material adverse change in Remington’s business or operations; and | ||
• | receipt of an opinion satisfactory to Helix of its tax counsel, Fulbright & Jaworski L.L.P., to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. |
• | accuracy as of the closing of the merger of the representations and warranties made by Helix and Merger Sub to the extent specified in the merger agreement; | ||
• | Helix and Merger Sub’s performance in all material respects of their covenants and agreements under the merger agreement; | ||
• | absence of a material adverse change in Helix’s business or operations; | ||
• | receipt of an opinion satisfactory to Remington of its tax counsel, Andrews Kurth LLP, to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and | ||
• | delivery by Helix to the exchange agent of an irrevocable letter of instruction, in a form reasonably satisfactory to Remington, authorizing and directing the transfer to Remington stockholders of the merger consideration. |
• | by mutual written consent of Helix and Remington; | ||
• | by either Helix or Remington, if: |
• | adoption of the merger agreement by the Remington stockholders is not obtained; | ||
• | the parties fail to consummate the merger on or before August 31, 2006, unless the failure is the result of a breach of the merger agreement by the party seeking the termination; or |
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• | any governmental authority has issued a final and nonappealable order, decree or ruling or has taken any other final and nonappealable action that restrains, enjoins or prohibits the merger, unless the party seeking the termination has not used all reasonable efforts to remove such injunction, order or decree; |
• | by Helix, if: |
• | Remington materially breaches any of its representations or warranties set forth in the merger agreement or Remington fails to materially perform any of its covenants or agreements under the merger agreement and, in either case, Remington has not cured the breach or failure within 10 days of receiving notice from Helix of such breach or failure; | ||
• | Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other than Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing; | ||
• | Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or | ||
• | a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so; |
• | by Remington, if: |
• | prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that: |
• | Remington complies with its obligations under the no-solicitation provisions of the merger agreement; | ||
• | the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal; | ||
• | within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix; and | ||
• | Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; see “The Merger Agreement—Covenants and Agreements—Acquisition Proposals” beginning on page 65; or |
• | Helix materially breaches any of its representations or warranties set forth in the merger agreement or Helix fails to materially perform any of its covenants or agreements under the merger agreement, and, in either case, Helix has not cured the breach or failure within 10 days of receiving notice from Remington of such breach or failure. |
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• | if Remington terminates the merger agreement because, prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that: |
• | Remington complies with its obligations under the no-solicitation provisions of the merger agreement; | ||
• | the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal; | ||
• | within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix; and | ||
• | Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; and |
• | if Helix terminates the merger agreement because: |
• | Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other then Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing; | ||
• | Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or | ||
• | a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement disclosing that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so. |
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• | extend the time for the performance of any of the obligations or the other acts of the other parties; | ||
• | waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant to the merger agreement; or | ||
• | waive performance of any of the covenants or agreements, or satisfaction of any of the conditions, contained in the merger agreement. |
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• | Exploration.Pre-installation surveys; rig positioning and installation assistance; drilling inspection; subsea equipment maintenance; reservoir engineering; G&G; modeling; well design; and engineering. | ||
• | Development.Installation of production platforms; installation of subsea production systems; pipelay and burial; riser, manifold assembly installation and tie in; integrated production modeling; commissioning, testing and inspection; cable and umbilical lay and connection. | ||
• | Production.Inspection, maintenance and repair of production structures, risers and pipelines and subsea equipment; well intervention; life of field support; reservoir management; production technology; and intervention engineering. | ||
• | Decommissioning.Decommissioning and remediation services; plugging and abandonment services; platform salvage and removal; pipeline abandonment; site inspections. |
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(acreage)
Year | Gross | Net | ||||||
2006 | 51,840 | 18,432 | ||||||
2007 | 97,920 | 38,592 | ||||||
2008 | 34,560 | 14,078 | ||||||
2009 and Beyond | 34,560 | 12,480 | ||||||
Total | 218,880 | 83,582 | ||||||
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Total Proved | ||||
Estimated Proved Reserves: | ||||
Natural gas (MMcf) | 136,073 | |||
Oil and condensate (MBbls) | 14,873 | |||
Standardized measure of discounted future net cash flows (pre-tax)* | $ | 1,063,332,000 |
* | The standardized measure of discounted future net cash flows attributable to our reserves was prepared using constant prices as of the calculation date, discounted at 10% per annum. As of December 31, 2005, Helix owned an interest in 354 gross (285 net) oil wells 302 gross (154 net) natural gas wells located in federal offshore waters in the Gulf of Mexico. |
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DP or | ||||||||||||||||||||
Flag | Placed in | Length | Anchor | |||||||||||||||||
State | Service | (Feet) | Berths | SAT Diving | Moored | Crane Capacity (tons) | Class Society (1) | |||||||||||||
SHELF CONTRACTING | ||||||||||||||||||||
Pipelay | ||||||||||||||||||||
DLB 801(2) | Panama | 1/2006 | 351 | 230 | Capable | Anchor | 815 | BV | ||||||||||||
Brave | U.S. | 8/2005 | 275 | 80 | — | Anchor | 30 and 50 | ABS | ||||||||||||
Rider | U.S. | 8/2005 | 275 | 80 | — | Anchor | 50 | ABS | ||||||||||||
Saturation Diving | ||||||||||||||||||||
DP DSVEclipse | Bahamas | 3/2002 | 367 | 109 | X | DP | 5; 4.3; 92/43; 20.4 A-Frame | DNV | ||||||||||||
DP DSVKestrel(3) | Vanuatu | 3/2006 | 323 | 80 | X | DP | 40; 15; 10; Hydralift HLR 308 | ABS | ||||||||||||
DP DSVMystic Viking | Bahamas | 6/2001 | 253 | 60 | X | DP | 50 | DNV | ||||||||||||
DP DSVDefender(4) | Panama | 11/2005 | 220 | 63 | X | DP | 24 block; 3.9 whip line | ABS | ||||||||||||
DP MSVUncle John | Bahamas | 11/1996 | 254 | 102 | X | DP | 2×100 | DNV | ||||||||||||
DSVAmerican Constitution | Panama | 11/2005 | 200 | 46 | X | 4 point | 20.41 | IMC | ||||||||||||
DSVCal Diver I | U.S. | 7/1984 | 196 | 40 | X | 4 point | 20 | ABS | ||||||||||||
DSVCal Diver II | U.S. | 6/1985 | 166 | 32 | X | 4 point | 40 A-Frame | ABS | ||||||||||||
DSVCarrier(4) | Vanuatu | 8/2005 | 270 | 36 | Capable | 4 point | — | Lloyds | ||||||||||||
DSV Sat Star | Vanuatu | 8/2005 | 197 | 42 | — | 4 point | 20 and 40 | ABS | ||||||||||||
Air Diving | ||||||||||||||||||||
American Diver | U.S. | 11/2005 | 105 | 22 | — | — | — | ABS (LL only) | ||||||||||||
American Liberty | U.S. | 11/2005 | 110 | 22 | — | — | 1.588 | USCG | ||||||||||||
Cal Diver IV | U.S. | 3/2001 | 120 | 24 | — | — | — | ABS | ||||||||||||
DSVAmerican Star | U.S. | 11/2005 | 165 | 30 | — | 4 point | 9.072 | ABS | ||||||||||||
DSV American Triumph | U.S. | 11/2005 | 164 | 32 | — | 4 point | 13.61 | ABS (LL only) | ||||||||||||
DSV American Victory | U.S. | 11/2005 | 165 | 34 | — | 4 point | 9.072 | ABS (LL only) | ||||||||||||
DSVCal Diver V | U.S. | 9/1991 | 166 | 34 | — | 4 point | 20 A-Frame | ABS | ||||||||||||
DSVDancer | U.S. | 8/2005 | 173 | 34 | — | 4 point | 30 | ABS | ||||||||||||
DSVMr. Fred | U.S. | 3/2000 | 166 | 36 | — | 4 point | 25 | USCG | ||||||||||||
Fox | U.S. | 10/2005 | 130 | 42 | — | — | — | ABS | ||||||||||||
Mr. Jack | U.S. | 1/1998 | 120 | 22 | — | — | 10 | USCG | ||||||||||||
Mr. Jim | U.S. | 2/1998 | 110 | 19 | — | — | — | USCG | ||||||||||||
Polo Pony | U.S. | 3/2001 | 110 | 25 | — | — | — | USCG | ||||||||||||
Sterling Pony | U.S. | 3/2001 | 110 | 25 | — | — | — | USCG | ||||||||||||
White Pony | U.S. | 3/2001 | 116 | 25 | — | — | — | USCG | ||||||||||||
DEEPWATER CONTRACTING | ||||||||||||||||||||
Pipelay | ||||||||||||||||||||
Caesar(2) | Vanuatu | 1/2006 | 482 | 220 | — | DP | 300 and 36 | Lloyds | ||||||||||||
Express | Vanuatu | 8/2005 | 520 | 132 | — | DP | 500 and 120 | Lloyds | ||||||||||||
Intrepid | Bahamas | 8/1997 | 381 | 50 | — | DP | 400 | ABS | ||||||||||||
Talisman | U.S. | 11/2000 | 195 | 14 | — | — | — | ABS | ||||||||||||
Well Operations | ||||||||||||||||||||
Q4000 | U.S. | 4/2002 | 312 | 135 | Capable | DP | 160 and 360; 600 Derrick | ABS | ||||||||||||
Seawell | U.K. | 7/2002 | 368 | 129 | X | DP | 130 | DNV | ||||||||||||
Robotics | ||||||||||||||||||||
25 ROVs and 4 Trenchers (6) | — | Various | — | — | — | — | — | — | ||||||||||||
Northern Canyon(5) | Bahamas | 6/2002 | 276 | 58 | — | DP | 50 | DNV |
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Notes: | ||
(1) | Under government regulations and Helix’s insurance policies, Helix is required to maintain its vessels in accordance with standards of seaworthiness and safety set by government regulations and classification organizations. Helix maintains its fleet to the standards for seaworthiness, safety and health set by the American Bureau of Shipping, or ABS, Bureau Veritas, or BV, Det Norske Veritas, or DNV, Lloyds Register of Shipping, or Lloyds, and the U.S. Coast Guard, or USCG. The ABS, BV, DNV and Lloyds are classification societies used by ship owners to certify that their vessels meet certain structural, mechanical and safety equipment standards. | |
(2) | Acquired in January 2006. | |
(3) | Acquired in March 2006. | |
(4) | Held for sale at December 31, 2005. | |
(5) | Leased. | |
(6) | Average age of ROV fleet is approximately 3.72 years. One of the ROVs is leased. |
Total Proved | ||||
Estimated Proved Reserves: | ||||
Natural gas (MMcf) | 136,073 | |||
Oil and condensate (MBbls) | 14,873 | |||
Standardized measure of discounted future net cash flows (pre-tax)* | $ | 1,063,332,000 |
* | The standardized measure of discounted future net cash flows attributable to Helix’s reserves was prepared using constant prices as of the calculation date, discounted at 10% per annum. As of December 31, 2005, Helix owned an interest in 354 gross (285 net) oil wells and 302 gross (154 net) natural gas wells located in federal and state offshore waters in the Gulf of Mexico. |
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Location | Function | Size | ||
Houston, Texas | Helix Energy Solutions Group, Inc. | 80,000 square feet | ||
Corporate Headquarters, Project Management, | ||||
and Sales Office | ||||
Cal Dive International, Inc. | ||||
Corporate Headquarters, Project Management, | ||||
and Sales Office | ||||
Energy Resource Technology, Inc. | ||||
Corporate Headquarters | ||||
Well Ops Inc. | ||||
Corporate Headquarters, Project Management, | ||||
and Sales Office | ||||
Houston, Texas | Canyon Offshore, Inc. | 15,000 square feet | ||
Corporate, Management and Sales Office | ||||
Fourchon, Louisiana | Cal Dive International, Inc. | 10 acres | ||
Marine, Operations, Living Quarters | (Buildings: 2,300 sq. feet) | |||
Lafayette, Louisiana* | Cal Dive International, Inc. | 8 acres | ||
Operations, Offices and Warehouse | (Buildings: 17,500 sq. feet) | |||
Morgan City, Louisiana** | Cal Dive International, Inc. | 28.5 acres | ||
Operations, Offices and Warehouse | (Buildings: 34,500 sq. feet) | |||
New Orleans, Louisiana | Cal Dive International, Inc. | 2,724 square feet | ||
Sales Office | ||||
Port of Iberia, Louisiana | Cal Dive International, Inc. | 23 acres | ||
Operations, Offices and Warehouse | (Buildings: 68,062 sq. feet) | |||
Aberdeen (Dyce), Scotland | Well Ops (U.K.) Limited | 3.9 acres | ||
Corporate Offices and Operations | (Building: 42,463 sq. feet) | |||
Canyon Offshore Limited | ||||
Corporate Offices and Sales Office | ||||
Aberdeen (Westhill), Scotland | Helix RDS Limited | 11,333 square feet | ||
Corporate Offices | ||||
Kuala Lumpur, Malaysia | Helix RDS Sdn Bhd | 2,227 square feet | ||
Corporate Offices | ||||
London, England | Helix RDS Limited | 2,200 square feet | ||
Corporate Offices | ||||
Perth, Australia | Helix RDS Pty Ltd | 2,045 square feet | ||
Corporate Offices | ||||
Rotterdam, The Netherlands | Cal Dive International BV | 1,362 square feet | ||
Corporate Offices | ||||
Singapore | Canyon Offshore International | 10,000 square feet | ||
Corporate, Operations and Sales |
* | Closed on or about February 28, 2006. | |
** | To be closed on or about March 31, 2006. |
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Common Stock Price | ||||||||
High * | Low * | |||||||
Calendar Year 2004 | ||||||||
First quarter | $ | 14.00 | $ | 11.37 | ||||
Second quarter | $ | 15.62 | $ | 12.51 | ||||
Third quarter | $ | 18.14 | $ | 13.96 | ||||
Fourth quarter | $ | 21.86 | $ | 16.95 | ||||
Calendar Year 2005 | ||||||||
First Quarter | $ | 26.14 | $ | 19.11 | ||||
Second Quarter | $ | 26.94 | $ | 20.57 | ||||
Third Quarter | $ | 32.18 | $ | 25.98 | ||||
Fourth Quarter | $ | 40.17 | $ | 26.40 | ||||
Calendar Year 2006 | ||||||||
First quarter (through March 30, 2006) | $ | 45.61 | $ | 32.85 |
* | Adjusted to reflect the two-for-one stock split effective as the close of business on December 8, 2005. |
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• | Worldwide economic activity, | ||
• | Economic and political conditions in the Middle East and other oil-producing regions, | ||
• | Coordination by the Organization of Petroleum Exporting Countries, or OPEC, | ||
• | The cost of exploring for and producing oil and gas, | ||
• | The sale and expiration dates of offshore leases in the United States and overseas, | ||
• | The discovery rate of new oil and gas reserves in offshore areas, | ||
• | Technological advances, | ||
• | Interest rates and the cost of capital, | ||
• | Environmental regulations, and | ||
• | Tax policies. |
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2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||||||||||||||||||||
U.S. natural gas prices (1) | $ | 6.39 | $ | 6.94 | $ | 9.74 | $ | 12.31 | $ | 5.61 | $ | 6.08 | $ | 5.44 | $ | 6.26 | $ | 6.25 | $ | 5.61 | $ | 4.87 | $ | 5.06 | ||||||||||||||||||||||||||||
NYMEX oil prices (2) | $ | 49.84 | $ | 53.17 | $ | 63.19 | $ | 60.03 | $ | 35.15 | $ | 38.32 | $ | 43.88 | $ | 48.28 | $ | 33.86 | $ | 28.91 | $ | 30.20 | $ | 31.18 | ||||||||||||||||||||||||||||
ERT oil and gas production (MMcfe) | 9,029 | 8,858 | 8,430 | 6,656 | 10,020 | 10,043 | 9,959 | 9,792 | 6,780 | 6,722 | 7,175 | 7,241 | ||||||||||||||||||||||||||||||||||||||||
Rigs under contract in the Gulf (3) | 130 | 132 | 130 | 127 | 117 | 115 | 118 | 122 | 119 | 123 | 129 | 122 | ||||||||||||||||||||||||||||||||||||||||
Rigs under contract in N. Sea (3) | 65 | 67 | 68 | 70 | 54 | 56 | 57 | 64 | 58 | 65 | 63 | 57 | ||||||||||||||||||||||||||||||||||||||||
Platform installations (4) | 35 | 21 | 11 | 3 | 26 | 28 | 26 | 10 | 7 | 21 | 12 | 13 | ||||||||||||||||||||||||||||||||||||||||
Platform removals (4) | 11 | 42 | 32 | 6 | 23 | 47 | 67 | 22 | 3 | 11 | 34 | 18 | ||||||||||||||||||||||||||||||||||||||||
Our average vessel utilization rate: (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shelf contracting | 50 | % | 54 | % | 65 | % | 85 | % | 42 | % | 49 | % | 50 | % | 65 | % | 60 | % | 59 | % | 68 | % | 51 | % | ||||||||||||||||||||||||||||
Deepwater contracting: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pipelay | 64 | % | 91 | % | 100 | % | 96 | % | 90 | % | 77 | % | 40 | % | 82 | % | 80 | % | 76 | % | 49 | % | 59 | % | ||||||||||||||||||||||||||||
Well Operations | 96 | % | 49 | % | 94 | % | 98 | % | 82 | % | 73 | % | 73 | % | 92 | % | 51 | % | 90 | % | 81 | % | 89 | % | ||||||||||||||||||||||||||||
ROVs | 66 | % | 68 | % | 67 | % | 75 | % | 48 | % | 47 | % | 49 | % | 59 | % | 53 | % | 57 | % | 56 | % | 47 | % | ||||||||||||||||||||||||||||
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(1) | Henry Hub Gas Daily Average (the midpoint index price per Mmbtu for deliveries into a specific pipeline for the applicable calendar day as reported by Platts Gas Daily in the “Daily Price Survey” table). | |
(2) | Per NYMEX Calendar pricing. | |
(3) | Average monthly number of rigs contracted, as reported by Offshore Petrodata – Offshore Rig Locator. | |
(4) | Source: Minerals Management Service; installation and removal of platforms with two or more piles in the Gulf. | |
(5) | Average vessel utilization rate is calculated by dividing the total number of days the vessels in this category generated revenues by the total number of days in each quarter. |
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• | during any fiscal quarter (beginning with the quarter ended March 31, 2005) if the closing sale price of Helix’s common stock for at least 20 trading days in the period of 30 consecutive trading day ending on the last trading day of the preceding fiscal quarter exceeds 120% of the conversion price on that 30th trading day (i.e. $38.56 per share); | ||
• | upon the occurrence of specified corporate transactions; or | ||
• | if Helix has called the Convertible Senior Notes for redemption and the redemption has not yet occurred. |
• | cash equal to the lesser of $1,000 and the conversion value, and | ||
• | to the extent the conversion value exceeds $1,000, a number of shares equal to the quotient of (A) the conversion value less $1,000, divided by (B) the last reported sale price of Helix’s common stock for such day. |
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Less Than | More than | |||||||||||||||||||
Total (1) | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
Convertible Senior Notes (2) | $ | 300,000 | $ | — | $ | — | $ | — | $ | 300,000 | ||||||||||
MARAD debt | 134,927 | 3,641 | 7,837 | 8,638 | 114,811 | |||||||||||||||
Revolving debt | — | — | — | — | — | |||||||||||||||
Capital leases | 6,852 | 2,828 | 4,024 | — | — | |||||||||||||||
Helix Energy Limited loan notes | 5,393 | — | 5,393 | — | — | |||||||||||||||
Acquisition of Stolt assets (3) | 78,000 | 78,000 | — | — | — | |||||||||||||||
Investments in Independence Hub, LLC | 32,200 | 32,200 | — | — | — | |||||||||||||||
Drilling and development costs | 78,000 | 78,000 | — | — | — | |||||||||||||||
Property and equipment (4) | 130,000 | 130,000 | — | — | — | |||||||||||||||
Operating leases | 17,869 | 4,025 | 3,940 | 3,139 | 6,765 | |||||||||||||||
Total cash obligations | $ | 783,241 | $ | 328,694 | $ | 21,194 | $ | 11,777 | $ | 421,576 | ||||||||||
(1) | Excludes Helix guarantee of performance related to the construction of the Independence Hub platform under Independence Hub, LLC (estimated to be immaterial at December 31, 2005), and unsecured letters of credit outstanding at December 31, 2005 totaling $6.7 million. These letters of credit primarily guarantee various contract bidding and insurance activities. Helix has estimated decommissioning costs of $15.0 million for 2006 and $106.3 million thereafter which are excluded from table above as the amounts are not contractually committed at December 31, 2005. | |
(2) | Maturity 2025. Can be converted prior to stated maturity if closing sale price of Helix’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter exceeds 120% of the closing price on that 30th trading day (i.e. $38.56 per share). | |
(3) | In April 2005, Helix announced that it had reached an agreement (subject to certain regulatory approvals) to acquire certain assets of Stolt Offshore for approximately $120 million. Helix acquired theDB 801in January 2006 for approximately $38.0 million. Helix subsequently sold a 50% interest in the vessel in January 2006 for total consideration of approximately $23.5 million. Helix acquired theKestrelin March 2006 for approximately $40 million. | |
(4) | At December 31, 2005, Helix had committed to purchase a certain Deepwater Contracting vessel (theCaesar)to be converted into a deepwater pipelay vessel. Total purchase price and conversion costs are estimated to be approximately $125 million to be incurred over the next year. Further, Helix had committed approximately $5 million of the $40 million related to the upgrade of theQ4000. |
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Instrument | Average Monthly | Weighted | ||||
Production Period | Type | Volumes | Average Price | |||
Crude Oil: | ||||||
January to December 2006 | Collar | 125 MBbl | $44.00 — $70.48 | |||
January to December 2007 | Collar | 50 MBbl | $40.00 — $62.15 | |||
Natural Gas: | ||||||
January to December 2006 | Collar | 718,750 MMBtu | $8.16 — $14.40 |
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Owen Kratz | Director since 1990 | |
Chairman of the Board and Chief Executive Officer | age 51 | |
Helix Energy Solutions Group, Inc. | ||
Bernard J. Duroc-Danner | Director since 1999 | |
Chairman of the Board, Chief Executive Officer and President | age 52 | |
Weatherford International, Ltd. | ||
John V. Lovoi | Director since 2003 | |
Principal | age 45 | |
JVL Partners | ||
T. William Porter, III | Director since 2004 | |
Chairman | age 64 | |
Porter & Hedges, L.L.P. | ||
William L. Transier | Director since 2000 | |
Co-Chief Executive Officer | age 51 | |
Endeavour International Corporation | ||
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Martin Ferron | Director since 1998 | |
President | age 49 | |
Helix Energy Solutions Group, Inc. | ||
Gordon F. Ahalt | Director since 1990 | |
Retired Consultant | age 78 | |
Anthony Tripodo | Director since 2003 | |
Managing Director | age 53 | |
Arch Creek Advisors LLC | ||
Name | Age | Position | ||
Owen Kratz | 51 | Chairman and Chief Executive Officer and Director | ||
Martin R. Ferron | 49 | President and Director | ||
Bart H. Heijermans | 39 | Executive Vice President and Chief Operating Officer | ||
James Lewis Connor, III | 48 | Senior Vice President, General Counsel and Corporate Secretary | ||
A. Wade Pursell | 41 | Senior Vice President, Chief Financial Officer and Treasurer | ||
Lloyd A. Hajdik | 40 | Vice President - Corporate Controller and Chief Accounting Officer |
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Annual Compensation (1) | Long Term Compensation | |||||||||||||||||||||||
Dollar Value | Securities | All Other | ||||||||||||||||||||||
of Restricted | Underlying | Compensation | ||||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus (2) | Stock Awards | Options | (3) | ||||||||||||||||||
Owen Kratz | 2005 | $ | 389,423 | $ | 529,759 | $ | 1,164,155 | — | $ | 5,250 | ||||||||||||||
Chairman and | 2004 | 350,000 | 467,608 | — | 33,500 | 5,125 | ||||||||||||||||||
Chief Executive Officer | 2003 | 335,416 | 123,750 | — | 39,579 | 5,000 | ||||||||||||||||||
Martin R. Ferron | 2005 | 389,423 | 529,759 | 1,164,155 | — | 5,250 | ||||||||||||||||||
President | 2004 | 250,000 | 209,394 | — | 21,900 | 5,125 | ||||||||||||||||||
2003 | 239,583 | 63,800 | — | 14,146 | 5,000 | |||||||||||||||||||
Bart H. Heijermans (4) | 2005 | 113,333 | 120,000 | 3,728,423 | — | — | ||||||||||||||||||
Executive Vice President | 2004 | — | — | — | — | — | ||||||||||||||||||
and Chief Operating Officer | 2003 | — | — | — | — | — | ||||||||||||||||||
A. Wade Pursell | 2005 | 221,037 | 197,353 | 400,000 | — | 5,250 | ||||||||||||||||||
Senior Vice President | 2004 | 200,000 | 164,248 | — | 13,400 | 5,125 | ||||||||||||||||||
and Chief Financial Officer | 2003 | 193,750 | 45,500 | — | 12,265 | 4,844 | ||||||||||||||||||
James Lewis Connor, III | 2005 | 189,728 | 204,592 | 225,392 | — | 5,250 | ||||||||||||||||||
Senior Vice President | 2004 | 171,000 | 128,489 | — | 11,700 | 5,125 | ||||||||||||||||||
and General Counsel | 2003 | 133,752 | 122,582 | — | — | 4,601 | ||||||||||||||||||
Lloyd A. Hajdik | 2005 | 143,654 | 106,984 | 65,123 | — | 5,250 | ||||||||||||||||||
Vice President – Corporate Controller | 2004 | 140,000 | 80,000 | — | — | 3,800 | ||||||||||||||||||
and Chief Accounting Officer | 2003 | 11,667 | — | — | 10,000 | — |
Number of Securities | Dollar Value of Unexercised | |||||||||||||||
Number of Shares | Underlying Unexercised Options | In-the-Money Options at | ||||||||||||||
Acquired | Dollar Value | Fiscal Year-End | Fiscal Year-End | |||||||||||||
Name | on Exercise | Realized | Exercisable / Unexercisable | Exercisable/Unexercisable | ||||||||||||
Owen Kratz | 230,000 | $ | 3,301,469 | 615,063 / 101,095 | $ | 7,741,748 / $1,249,134 | ||||||||||
Martin R. Ferron | 78,420 | $ | 2,397,602 | — / 52,012 | — / $1,281,744 | |||||||||||
Bart H. Heijermans | — | — | — / — | — / — | ||||||||||||
A. Wade Pursell | 4,800 | $ | 72,666 | 73,172 / 36,158 | $ | 572,061 / $563,319 | ||||||||||
James Lewis Connor, III | 28,680 | $ | 507,411 | — / 42,720 | — / $737,763 | |||||||||||
Lloyd A. Hajdik | 6,000 | $ | 113,220 | 2,000 / 12,000 | $ | 39,140 / $156,560 |
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Shares Beneficially | Percent of | |||||||
Name and Address | Owned | Common Shares | ||||||
Neuberger Berman, LLC | 6,512,827 | 8.38 | % | |||||
605 Third Avenue | ||||||||
New York, New York 10158 |
Of Shares Beneficially | ||||||||
Amount and Nature of | Owned, Amount that May | |||||||
Beneficial | Be Acquired Within 60 Days | |||||||
Name of Beneficial Owner | Ownership (1) (2) | by Option Exercise | ||||||
Owen Kratz (3) | 5,995,979 | 15,832 | ||||||
Martin R. Ferron (4) | 242,468 | 5,657 | ||||||
Bart H. Heijermans | 133,738 | — | ||||||
A. Wade Pursell (5) | 143,984 | 83,438 | ||||||
James Lewis Connor, III | 34,609 | 4,680 | ||||||
Lloyd A. Hajdik | 10,310 | 2,000 | ||||||
Gordon F. Ahalt | 113,000 | 88,000 | ||||||
Bernard Duroc-Danner | 37,189 | 35,200 | ||||||
John V. Lovoi | 58,302 | 52,800 | ||||||
T. William Porter | 17,600 | 17,600 | ||||||
William L. Transier | 11,982 | — | ||||||
Anthony Tripodo | 36,651 | 30,800 | ||||||
Total | 6,835,812 | 336,007 | ||||||
(1) | Only one Director or executive officer, Owen Kratz, beneficially owns more than 1% of the shares outstanding. Mr. Kratz owns approximately 7.61% of the outstanding shares. Helix’s Directors and Named Executive Officers as a group beneficially own 6,835,812 shares (including shares that are not outstanding but are deemed beneficially owned because of the right to acquire them pursuant to options exercisable within 60 days), which represents approximately 8.68% of the shares outstanding. |
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(2) | Amounts include the shares shown in the last column, which are not currently outstanding but are deemed beneficially owned because of the right to acquire them pursuant to options exercisable within 60 days of March 21, 2006 (i.e., on or before June 9, 2006). With respect to employees other than Mr. Kratz, amounts include shares held through Helix’s Employee Stock Purchase Plan. | |
(3) | Mr. Kratz disclaims beneficial ownership of 1,000,000 shares included in the above table, which are held by Joss Investments Limited Partnership, an entity of which he is a General Partner. | |
(4) | Mr. Ferron disclaims beneficial ownership of 43,340 shares included in the above table, which are held by the Uncle John Limited Partnership, a family limited partnership of which he is a General Partner. | |
(5) | Mr. Pursell disclaims beneficial ownership of 15,000 shares included in the above table, which are held by the WT Kona Redbird Limited Partnership, a family limited partnership of which he is a General Partner. |
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Helix Energy Solutions Group, Inc.
March 14, 2006
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December 31, | ||||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 91,080 | $ | 91,142 | ||||
Accounts receivable — | ||||||||
Trade, net of allowance for uncollectible accounts $585 and $7,768 | 197,046 | 95,732 | ||||||
Unbilled revenue | 31,012 | 18,977 | ||||||
Deferred income taxes | 8,861 | 12,992 | ||||||
Other current assets | 44,054 | 35,118 | ||||||
Total current assets | 372,053 | 253,961 | ||||||
Property and equipment | 1,259,014 | 861,281 | ||||||
Less — Accumulated depreciation | (342,652 | ) | (276,864 | ) | ||||
916,362 | 584,417 | |||||||
Other assets: | ||||||||
Equity investments | 179,556 | 67,192 | ||||||
Goodwill, net | 101,731 | 84,193 | ||||||
Other assets, net | 91,162 | 48,995 | ||||||
$ | 1,660,864 | $ | 1,038,758 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 99,445 | $ | 56,047 | ||||
Accrued liabilities | 145,752 | 75,502 | ||||||
Current maturities of long-term debt | 6,468 | 9,613 | ||||||
Total current liabilities | 251,665 | 141,162 | ||||||
Long-term debt | 440,703 | 138,947 | ||||||
Deferred income taxes | 167,295 | 133,777 | ||||||
Decommissioning liabilities | 106,317 | 79,490 | ||||||
Other long term liabilities | 10,584 | 5,090 | ||||||
Total liabilities | 976,564 | 498,466 | ||||||
Convertible preferred stock | 55,000 | 55,000 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Common stock, no par, 240,000 shares authorized, 104,898 and 104,040 shares issued | 233,537 | 212,608 | ||||||
Retained earnings | 408,748 | 258,634 | ||||||
Treasury stock, 27,204 shares, at cost | (3,741 | ) | (3,741 | ) | ||||
Unearned compensation | (7,515 | ) | — | |||||
Accumulated other comprehensive (loss) income | (1,729 | ) | 17,791 | |||||
Total shareholders’ equity | 629,300 | 485,292 | ||||||
$ | 1,660,864 | $ | 1,038,758 | |||||
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net revenues | $ | 799,472 | $ | 543,392 | $ | 396,269 | ||||||
Cost of sales | 516,400 | 371,480 | 304,186 | |||||||||
Gross profit | 283,072 | 171,912 | 92,083 | |||||||||
Gain on sale of assets | 1,405 | — | — | |||||||||
Selling and administrative expenses | 62,790 | 48,881 | 35,922 | |||||||||
Income from operations | 221,687 | 123,031 | 56,161 | |||||||||
Equity in earnings (losses) of investments | 13,459 | 7,927 | (87 | ) | ||||||||
Net interest expense and other | 7,559 | 5,265 | 3,403 | |||||||||
Income before income taxes and change in accounting principle. | 227,587 | 125,693 | 52,671 | |||||||||
Provision for income taxes | 75,019 | 43,034 | 18,993 | |||||||||
Income before change in accounting principle | 152,568 | 82,659 | 33,678 | |||||||||
Cumulative effect of change in accounting principle, net | — | — | 530 | |||||||||
Net income | 152,568 | 82,659 | 34,208 | |||||||||
Preferred stock dividends and accretion | 2,454 | 2,743 | 1,437 | |||||||||
Net income applicable to common shareholders | $ | 150,114 | $ | 79,916 | $ | 32,771 | ||||||
Earnings per common share | ||||||||||||
Basic: | ||||||||||||
Earnings per share before change in accounting principle | $ | 1.94 | $ | 1.05 | $ | 0.43 | ||||||
Cumulative effect of change in accounting principle | — | — | 0.01 | |||||||||
Earnings per share | $ | 1.94 | $ | 1.05 | $ | 0.44 | ||||||
Diluted: | ||||||||||||
Earnings per share before change in accounting principle | $ | 1.86 | $ | 1.03 | $ | 0.43 | ||||||
Cumulative effect of change in accounting principle | — | — | 0.01 | |||||||||
Earnings per share | $ | 1.86 | $ | 1.03 | $ | 0.44 | ||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 77,444 | 76,409 | 75,479 | |||||||||
Diluted | 82,205 | 79,062 | 75,688 |
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Accumulated Other | Total | |||||||||||||||||||||||||||||||
Common Stock | Retained | Treasury Stock | Unearned | Comprehensive | Shareholders’ | |||||||||||||||||||||||||||
Shares | Amount | Earnings | Shares | Amount | Compensation | Income (Loss) | Equity | |||||||||||||||||||||||||
Balance, December 31, 2002 | 102,120 | $ | 195,405 | $ | 145,947 | (27,204 | ) | $ | (3,741 | ) | $ | — | $ | (94 | ) | $ | 337,517 | |||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||
Net income | — | — | 34,208 | — | — | — | — | 34,208 | ||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 5,044 | 5,044 | ||||||||||||||||||||||||
Unrealized gain on commodity hedges, net | — | — | — | — | — | — | 1,215 | 1,215 | ||||||||||||||||||||||||
Comprehensive income | 40,467 | |||||||||||||||||||||||||||||||
Convertible preferred stock dividends | — | — | (981 | ) | — | — | — | — | (981 | ) | ||||||||||||||||||||||
Accretion of preferred stock costs | — | — | (456 | ) | — | — | — | — | (456 | ) | ||||||||||||||||||||||
Activity in company stock plans, net | 800 | 3,940 | — | — | — | — | — | 3,940 | ||||||||||||||||||||||||
Tax benefit from exercise of stock options | — | 654 | — | — | — | — | — | 654 | ||||||||||||||||||||||||
Balance, December 31, 2003 | 102,920 | 199,999 | 178,718 | (27,204 | ) | (3,741 | ) | — | 6,165 | 381,141 | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||
Net income | — | — | 82,659 | — | — | — | — | 82,659 | ||||||||||||||||||||||||
Foreign currency translations adjustments | — | — | — | — | — | — | 10,780 | 10,780 | ||||||||||||||||||||||||
Unrealized gain on commodity hedges, net | — | — | — | — | — | — | 846 | 846 | ||||||||||||||||||||||||
Comprehensive income | 94,285 | |||||||||||||||||||||||||||||||
Convertible preferred stock dividends | — | — | (1,620 | ) | — | — | — | — | (1,620 | ) | ||||||||||||||||||||||
Accretion of preferred stock costs | — | — | (1,123 | ) | — | — | — | — | (1,123 | ) | ||||||||||||||||||||||
Activity in company stock plans, net | 1,120 | 10,481 | — | — | — | — | — | 10,481 | ||||||||||||||||||||||||
Tax benefit from exercise of stock options | — | 2,128 | — | — | — | — | — | 2,128 | ||||||||||||||||||||||||
Balance, December 31, 2004 | 104,040 | 212,608 | 258,634 | (27,204 | ) | (3,741 | ) | — | 17,791 | 485,292 | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||
Net income | — | — | 152,568 | — | — | — | — | 152,568 | ||||||||||||||||||||||||
Foreign currency translations adjustments | — | — | — | — | — | — | (11,393 | ) | (11,393 | ) | ||||||||||||||||||||||
Unrealized loss on commodity hedges, net | — | — | — | — | — | — | (8,127 | ) | (8,127 | ) | ||||||||||||||||||||||
Comprehensive income | 133,048 | |||||||||||||||||||||||||||||||
Convertible preferred stock dividends | — | — | (2,454 | ) | — | — | — | — | (2,454 | ) | ||||||||||||||||||||||
Activity in company stock plans, net | 858 | 16,527 | — | — | — | (7,515 | ) | — | 9,012 | |||||||||||||||||||||||
Tax benefit from exercise of stock options | — | 4,402 | — | — | — | — | — | 4,402 | ||||||||||||||||||||||||
Balance, December 31, 2005 | 104,898 | $ | 233,537 | $ | 408,748 | (27,204 | ) | $ | (3,741 | ) | $ | (7,515 | ) | $ | (1,729 | ) | $ | 629,300 | ||||||||||||||
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 152,568 | $ | 82,659 | $ | 34,208 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Cumulative effect of change in accounting principle | — | — | (530 | ) | ||||||||
Depreciation and amortization | 110,683 | 104,405 | 70,793 | |||||||||
Asset impairment charge | 790 | 3,900 | — | |||||||||
Equity in (earnings) losses of investments, net of distributions | (2,851 | ) | (469 | ) | 87 | |||||||
Amortization of deferred financing costs | 1,126 | 1,344 | 340 | |||||||||
Amortization of unearned compensation | 1,406 | — | — | |||||||||
Deferred income taxes | 42,728 | 42,046 | 18,493 | |||||||||
Tax benefit of stock option exercises | 4,402 | 2,128 | 654 | |||||||||
(Gain) loss on sale of assets | (1,405 | ) | 100 | 45 | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable, net | (107,163 | ) | (17,397 | ) | (20,256 | ) | ||||||
Other current assets | (6,997 | ) | (23,294 | ) | 5,038 | |||||||
Accounts payable and accrued liabilities | 64,625 | 43,292 | (9,808 | ) | ||||||||
Other noncurrent, net | (17,480 | ) | (11,907 | ) | (11,648 | ) | ||||||
Net cash provided by operating activities | 242,432 | 226,807 | 87,416 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (361,487 | ) | (50,123 | ) | (93,160 | ) | ||||||
Acquisition of businesses, net of cash acquired | (66,586 | ) | — | (407 | ) | |||||||
Investments in production facilities | (111,060 | ) | (32,206 | ) | (1,917 | ) | ||||||
Distributions from equity investments, net | 10,492 | — | — | |||||||||
(Increase) decrease in restricted cash | (4,431 | ) | (20,133 | ) | 73 | |||||||
Proceeds from (payments on) sales of property | 5,617 | (100 | ) | 200 | ||||||||
Other, net | (2,470 | ) | — | — | ||||||||
Net cash used in investing activities | (529,925 | ) | (102,562 | ) | (95,211 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Borrowings on Convertible Senior Notes | 300,000 | — | — | |||||||||
Sale of convertible preferred stock, net of transaction costs | — | 29,339 | 24,100 | |||||||||
Borrowings under MARAD loan facility | 2,836 | — | — | |||||||||
Repayment of MARAD borrowings | (4,321 | ) | (2,946 | ) | (2,767 | ) | ||||||
Repayments on line of credit | — | (30,189 | ) | (22,402 | ) | |||||||
Deferred financing costs | (11,678 | ) | (4,550 | ) | (208 | ) | ||||||
Borrowings on term loan | — | — | 5,730 | |||||||||
Repayments of term loan borrowings | — | (35,000 | ) | — | ||||||||
Borrowings on capital leases | — | — | 12,000 | |||||||||
Capital lease payments | (2,859 | ) | (3,647 | ) | (2,430 | ) | ||||||
Preferred stock dividends paid | (2,200 | ) | (1,620 | ) | (981 | ) | ||||||
Redemption of stock in subsidiary | (2,438 | ) | (2,462 | ) | (2,676 | ) | ||||||
Exercise of stock options | 8,726 | 11,038 | 3,570 | |||||||||
Net cash provided by (used in) financing activities | 288,066 | (40,037 | ) | 13,936 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (635 | ) | 556 | 237 | ||||||||
Net (decrease) increase in cash and cash equivalents | (62 | ) | 84,764 | 6,378 | ||||||||
Cash and cash equivalents: | ||||||||||||
Balance, beginning of year | 91,142 | 6,378 | — | |||||||||
Balance, end of year | $ | 91,080 | $ | 91,142 | $ | 6,378 | ||||||
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Estimated | ||||||||||
Useful Life | 2005 | 2004 | ||||||||
Vessels | 15 to 30 years | $ | 609,558 | $ | 506,262 | |||||
Offshore oil and gas leases and related equipment | UOP | 601,866 | 328,071 | |||||||
Machinery, equipment, buildings and leasehold improvements | 5 to 30 years | 47,590 | 26,948 | |||||||
Total property and equipment | $ | 1,259,014 | $ | 861,281 | ||||||
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Year Ended | ||||
December 31, | ||||
2003 | ||||
Net income applicable to common shareholders as reported | $ | 32,771 | ||
Cumulative effect of accounting change | (530 | ) | ||
Pro forma net income applicable to common shareholders | $ | 32,241 | ||
Pro forma earnings per common share applicable to common shareholders: | ||||
Basic | $ | 0.43 | ||
Diluted | 0.43 | |||
Earnings per common share applicable to common shareholders as reported: | ||||
Basic | $ | 0.44 | ||
Diluted | 0.44 |
Asset retirement obligation at December 31, 2004 | $ | 82,030 | ||
Liability incurred during the period | 36,119 | |||
Liabilities settled during the period | (1,913 | ) | ||
Revision in estimated cash flows | (583 | ) | ||
Accretion expense (included in depreciation and amortization) | 5,699 | |||
Asset retirement obligation at December 31, 2005 | $ | 121,352 | ||
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Instrument | Average Monthly | Weighted | ||||||
Production Period | Type | Volumes | Average Price | |||||
Crude Oil: | ||||||||
January to December 2006 | Collar | 125 MBbl | $ | 44.00 - $70.48 | ||||
January to December 2007 | Collar | 50 MBbl | $ | 40.00 - $62.15 | ||||
Natural Gas: | ||||||||
January to December 2006 | Collar | 718,750 MMBtu | $ | 8.16 - $14.40 |
Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Income before change in accounting principle | $ | 152,568 | $ | 82,659 | $ | 33,678 | ||||||
Cumulative effect of change in accounting principle, net | — | — | 530 | |||||||||
Preferred stock dividends and accretion | (2,454 | ) | (2,743 | ) | (1,437 | ) | ||||||
Net income applicable to common shareholders | $ | 150,114 | $ | 79,916 | $ | 32,771 | ||||||
Weighted-average common shares outstanding: | ||||||||||||
Basic | 77,444 | 76,409 | 75,479 | |||||||||
Effect of dilutive stock options | 772 | 609 | 209 | |||||||||
Effect of restricted shares | 240 | — | — | |||||||||
Effect of convertible notes | 118 | — | — | |||||||||
Effect of convertible preferred stock | 3,631 | 2,044 | — | |||||||||
Diluted | 82,205 | 79,062 | 75,688 | |||||||||
Basic Earnings Per Share: | ||||||||||||
Income before change in accounting principle | $ | 1.97 | $ | 1.08 | $ | 0.45 | ||||||
Cumulative effect of change in accounting principle, net | — | — | 0.01 | |||||||||
Preferred stock dividends and accretion | (0.03 | ) | (0.03 | ) | (0.02 | ) | ||||||
$ | 1.94 | $ | 1.05 | $ | 0.44 | |||||||
Diluted Earnings Per Share: | ||||||||||||
Income before change in accounting principle | $ | 1.89 | $ | 1.05 | $ | 0.45 | ||||||
Cumulative effect of change in accounting principle, net | — | — | 0.01 | |||||||||
Preferred stock dividends and accretion | (0.03 | ) | (0.02 | ) | (0.02 | ) | ||||||
$ | 1.86 | $ | 1.03 | $ | 0.44 | |||||||
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For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net income applicable to common shareholders: | ||||||||||||
As reported | $ | 150,114 | $ | 79,916 | $ | 32,771 | ||||||
Add back: Stock-based employee compensation cost included in reported net income, net of tax | 914 | — | — | |||||||||
Deduct: Total stock-based compensation costs determined under the fair value method, net of tax | (2,566 | ) | (2,368 | ) | (3,331 | ) | ||||||
Pro Forma | $ | 148,462 | $ | 77,548 | $ | 29,440 | ||||||
Earnings per common share: | ||||||||||||
Basic: | ||||||||||||
As reported | $ | 1.94 | $ | 1.05 | $ | 0.44 | ||||||
Pro forma | $ | 1.92 | $ | 1.02 | $ | 0.39 | ||||||
Diluted: | ||||||||||||
As reported | $ | 1.86 | $ | 1.03 | $ | 0.44 | ||||||
Pro forma | $ | 1.84 | $ | 1.00 | $ | 0.39 |
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Years Ended December 31, | ||||||||
2005 | 2004 | |||||||
Net revenues | $ | 829,205 | $ | 610,338 | ||||
Income before income taxes | 232,145 | 135,780 | ||||||
Net income | 155,531 | 89,216 | ||||||
Net income applicable to common shareholders | 153,077 | 86,473 | ||||||
Earnings per common share: | ||||||||
Basic | $ | 1.98 | $ | 1.13 | ||||
Diluted | $ | 1.89 | $ | 1.11 |
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Years Ended December 31, | ||||||||
2005 | 2004 | |||||||
Net revenues | $ | 1,039,615 | $ | 705,843 | ||||
Income before income taxes | 236,078 | 86,241 | ||||||
Net income | 158,260 | 56,714 | ||||||
Net income applicable to common shareholders | 155,806 | 53,971 | ||||||
Earnings per common share: | ||||||||
Basic | $ | 2.01 | $ | 0.71 | ||||
Diluted | $ | 1.93 | $ | 0.70 |
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2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets | $ | 3,070 | $ | 5,047 | ||||
Noncurrent assets | 228,689 | 250,508 | ||||||
$ | 231,759 | $ | 255,555 | |||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||
Current liabilities | $ | 373 | $ | 25,164 | ||||
Noncurrent liabilities | 440 | 122,397 | ||||||
Members’ equity | 230,946 | 107,994 | ||||||
$ | 231,759 | $ | 255,555 | |||||
2005 | 2004 | 2003 | ||||||||||
Revenues | $ | 32,411 | $ | 26,740 | $ | — | ||||||
Operating expenses | 596 | 247 | 187 | |||||||||
Depreciation | 8,028 | 6,018 | — | |||||||||
Operating income (loss) | 23,787 | 20,475 | (187 | ) | ||||||||
Interest expense | (2,833 | ) | (4,475 | ) | — | |||||||
Interest income, net of other expense | 198 | 118 | 47 | |||||||||
Net Income (Loss) | $ | 21,152 | $ | 16,118 | $ | (140 | ) | |||||
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2005 | 2004 | |||||||
Accrued payroll and related benefits | $ | 27,982 | $ | 20,195 | ||||
Workers’ compensation claims | 2,035 | 2,767 | ||||||
Insurance claims to be reimbursed | 6,133 | 9,485 | ||||||
Royalties payable | 46,555 | 26,196 | ||||||
Decommissioning liability | 15,035 | 2,540 | ||||||
Hedging liability | 8,814 | 876 | ||||||
Income taxes payable | 7,288 | 797 | ||||||
Deposits | 10,000 | — | ||||||
Other | 21,910 | 12,646 | ||||||
Total accrued liabilities | $ | 145,752 | $ | 75,502 | ||||
• | during any fiscal quarter (beginning with the quarter ended March 31, 2005) if the closing sale price of Helix’s common stock for at least 20 trading days in the period of 30 consecutive trading day ending on the last trading day of the preceding fiscal quarter exceeds 120% of the conversion price on that 30th trading day (i.e., $38.56 per share); | ||
• | upon the occurrence of specified corporate transactions; or | ||
• | if the Company has called the Convertible Senior Notes for redemption and the redemption has not yet occurred. |
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• | cash equal to the lesser of $1,000 and the conversion value, and | ||
• | to the extent the conversion value exceeds $1,000, a number of shares equal to the quotient of (A) the conversion value less $1,000, divided by (B) the last reported sale price of Helix’s common stock for such day. |
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Convertible | ||||||||||||||||||||||||
MARAD | Senior | Capital | Loan | |||||||||||||||||||||
Debt | Notes | Revolver | Leases | Notes | Total | |||||||||||||||||||
2006 | $ | 3,640 | $ | — | $ | — | $ | 2,828 | $ | — | $ | 6,468 | ||||||||||||
2007 | 3,823 | — | — | 2,519 | 5,393 | 11,735 | ||||||||||||||||||
2008 | 4,014 | — | — | 1,505 | — | 5,519 | ||||||||||||||||||
2009 | 4,214 | — | — | — | — | 4,214 | ||||||||||||||||||
2010 | 4,424 | — | — | — | — | 4,424 | ||||||||||||||||||
Thereafter | 114,811 | 300,000 | — | — | — | 414,811 | ||||||||||||||||||
Long-term debt | 134,926 | 300,000 | — | 6,852 | 5,393 | 447,171 | ||||||||||||||||||
Current maturities | (3,640 | ) | — | — | (2,828 | ) | — | (6,468 | ) | |||||||||||||||
Long-term debt, less current maturities | $ | 131,286 | $ | 300,000 | $ | — | $ | 4,024 | $ | 5,393 | $ | 440,703 | ||||||||||||
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Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
Foreign provision | — | 0.9 | 0.4 | |||||||||
Percentage depletion in excess of basis | (0.7 | ) | — | — | ||||||||
Research and development tax credits | — | (1.3 | ) | — | ||||||||
IRC Section199 deduction | (0.5 | ) | — | — | ||||||||
Other | (0.8 | ) | (0.4 | ) | 0.7 | |||||||
Effective rate | 33.0 | % | 34.2 | % | 36.1 | % | ||||||
Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Current | $ | 32,291 | $ | 988 | $ | 500 | ||||||
Deferred | 42,728 | 42,046 | 18,493 | |||||||||
$ | 75,019 | $ | 43,034 | $ | 18,993 | |||||||
2005 | 2004 | 2003 | ||||||||||
Domestic | $ | 68,957 | $ | 41,260 | $ | 20,492 | ||||||
Foreign | 6,062 | 1,774 | (1,499 | ) | ||||||||
$ | 75,019 | $ | 43,034 | $ | 18,993 | |||||||
2005 | 2004 | |||||||
Deferred tax liabilities | ||||||||
Depreciation | $ | 159,360 | $ | 136,328 | ||||
Equity investments in production facilities | 28,264 | 23,152 | ||||||
Prepaid and other | 10,693 | 6,657 | ||||||
Total deferred tax liabilities | $ | 198,317 | $ | 166,137 | ||||
Deferred tax assets | ||||||||
Net operating loss carry forward | $ | (2,079 | ) | $ | (3,706 | ) | ||
Decommissioning liabilities | (26,915 | ) | (28,711 | ) | ||||
R&D credit carry forward | — | (4,455 | ) | |||||
Reserves, accrued liabilities and other | (10,537 | ) | (8,263 | ) | ||||
Total deferred tax assets | $ | (39,531 | ) | $ | (45,135 | ) | ||
Net deferred tax liability | $ | 158,786 | $ | 121,002 | ||||
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2005 | 2004 | 2003 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
Options outstanding, Beginning of year | 2,599,894 | $ | 10.65 | 3,446,204 | $ | 10.19 | 3,981,492 | $ | 9.76 | |||||||||||||||
Granted | — | — | 337,000 | 12.63 | 367,980 | 8.95 | ||||||||||||||||||
Exercised | (858,070 | ) | 10.17 | (1,119,818 | ) | 9.85 | (631,514 | ) | 6.69 | |||||||||||||||
Terminated | (23,920 | ) | 10.82 | (63,492 | ) | 10.43 | (271,754 | ) | 10.19 | |||||||||||||||
Options outstanding, December 31, | 1,717,904 | $ | 10.91 | 2,599,894 | $ | 10.65 | 3,446,204 | $ | 10.19 | |||||||||||||||
Options exercisable, December 31, | 1,066,316 | $ | 10.94 | 1,428,348 | $ | 10.58 | 1,872,790 | $ | 10.35 | |||||||||||||||
13. | Shareholders’ Equity |
14. | Business Segment Information (in thousands) |
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Revenues — | ||||||||||||
Deepwater contracting | $ | 328,315 | $ | 197,688 | $ | 150,486 | ||||||
Shelf contracting | 223,211 | 126,546 | 134,935 | |||||||||
Oil and gas production | 275,813 | 243,310 | 137,279 | |||||||||
Intercompany elimination | (27,867 | ) | (24,152 | ) | (26,431 | ) | ||||||
Total | $ | 799,472 | $ | 543,392 | $ | 396,269 | ||||||
Income (loss) from operations — | ||||||||||||
Deepwater contracting | $ | 42,333 | $ | (8,916 | ) | $ | (13,094 | ) | ||||
Shelf contracting (1), (2) | 60,078 | 14,610 | 15,622 | |||||||||
Oil and gas production | 123,104 | 117,682 | 53,633 | |||||||||
Production facilities equity investments (3) | (977 | ) | (345 | ) | — | |||||||
Total | $ | 224,538 | $ | 123,031 | $ | 56,161 | ||||||
Net interest expense and other — | ||||||||||||
Deepwater contracting | $ | 8,571 | $ | 4,663 | $ | 2,744 | ||||||
Shelf contracting | (45 | ) | — | 42 | ||||||||
Oil and gas production | (1,117 | ) | 602 | 617 | ||||||||
Production facilities equity investments | 150 | — | — | |||||||||
Total | $ | 7,559 | $ | 5,265 | $ | 3,403 | ||||||
Equity in earnings (losses) of production facilities investments | $ | 10,608 | $ | 7,927 | $ | (87 | ) | |||||
Income (loss) before income taxes— | ||||||||||||
Deepwater contracting | $ | 33,762 | $ | (13,579 | ) | $ | (15,838 | ) | ||||
Shelf contracting | 60,123 | 14,610 | 15,580 | |||||||||
Oil and gas production | 124,221 | 117,080 | 53,016 | |||||||||
Production facilities equity investments | 9,481 | 7,582 | (87 | ) | ||||||||
Total | $ | 227,587 | $ | 125,693 | $ | 52,671 | ||||||
Provision (benefit) for income taxes — | ||||||||||||
Deepwater contracting | $ | 9,949 | $ | (7,574 | ) | $ | (5,061 | ) | ||||
Shelf contracting | 21,009 | 5,166 | 5,383 | |||||||||
Oil and gas production | 40,734 | 42,787 | 18,701 | |||||||||
Production facilities equity investments | 3,327 | 2,655 | (30 | ) | ||||||||
Total | $ | 75,019 | $ | 43,034 | $ | 18,993 | ||||||
Identifiable assets — | ||||||||||||
Deepwater contracting | $ | 736,852 | $ | 597,257 | $ | 466,632 | ||||||
Shelf contracting | 277,446 | 145,226 | 156,463 | |||||||||
Oil and gas production | 478,522 | 229,083 | 225,230 | |||||||||
Production facilities equity investments | 168,044 | 67,192 | 34,517 | |||||||||
Total | $ | 1,660,864 | $ | 1,038,758 | $ | 882,842 | ||||||
Capital expenditures — | ||||||||||||
Deepwater contracting | $ | 90,037 | $ | 21,016 | $ | 18,938 | ||||||
Shelf contracting | 32,383 | 1,792 | 2,631 | |||||||||
Oil and gas production | 238,698 | 27,315 | 71,591 | |||||||||
Production facilities equity investments | 111,429 | 32,206 | 1,917 | |||||||||
Total | $ | 472,547 | $ | 82,329 | $ | 95,077 | ||||||
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Depreciation and amortization — | ||||||||||||
Deepwater contracting | $ | 25,102 | $ | 20,227 | $ | 18,171 | ||||||
Shelf contracting (1) | 15,734 | 19,032 | 14,731 | |||||||||
Oil and gas production | 70,637 | 69,046 | 37,891 | |||||||||
Total | $ | 111,473 | $ | 108,305 | $ | 70,793 | ||||||
(1) | Included pre-tax $790,000 and $3.9 million of asset impairment charges in 2005 and 2004, respectively. | |
(2) | Included $2.8 million equity in earnings from investment in OTSL. | |
(3) | Represents selling and administrative expense of Production Facilities incurred by the Company. See Equity in Earning of Production Facilities investments for earning contribution. |
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Deepwater Contracting | $ | 26,431 | $ | 22,246 | $ | 23,044 | ||||||
Shelf Contracting | 1,436 | 1,906 | 3,387 | |||||||||
Total | $ | 27,867 | $ | 24,152 | $ | 26,431 | ||||||
15. | Supplemental Oil and Gas Disclosures (Unaudited) |
2005 | 2004 | 2003 | ||||||||||
Gunnison(net of accumulated depreciation, depletion and amortization) | $ | 100,020 | $ | 107,335 | $ | 104,378 | ||||||
Proved developed properties being amortized | 375,563 | 201,392 | 188,113 | |||||||||
Less — Accumulated depletion, depreciation and amortization | (160,651 | ) | (136,066 | ) | (96,086 | ) | ||||||
Net capitalized costs | $ | 314,932 | $ | 172,661 | $ | 196,405 | ||||||
Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Exploration costs | $ | 5,728 | $ | — | $ | — | ||||||
Proved property acquisition costs | 219,956 | — | 2,687 | |||||||||
Development costs | 67,193 | 38,373 | 79,289 | |||||||||
Total costs incurred | $ | 292,877 | $ | 38,373 | $ | 81,976 | ||||||
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Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Revenues | $ | 275,813 | $ | 243,310 | $ | 137,279 | ||||||
Production (lifting) costs | 62,700 | 39,454 | 33,907 | |||||||||
Depreciation, depletion and amortization | 70,637 | 69,046 | 37,891 | |||||||||
Selling and administrative | 19,372 | 17,745 | 12,465 | |||||||||
Pretax income from producing activities | 123,104 | 117,065 | 53,016 | |||||||||
Income tax expense | 40,734 | 42,787 | 18,701 | |||||||||
Results of oil and gas producing activities | $ | 82,370 | $ | 74,278 | $ | 34,315 | ||||||
Oil | Gas | Total | ||||||||||
Reserve Quantity Information | (MBbls) | (MMcf) | (MMcfe) | |||||||||
Total proved reserves at December 31, 2002 | 12,037 | 85,225 | 157,447 | |||||||||
Revision of previous estimates | 1,942 | (5,545 | ) | 6,107 | ||||||||
Production | (1,952 | ) | (16,208 | ) | (27,920 | ) | ||||||
Purchases of reserves in place | 6 | 2,657 | 2,693 | |||||||||
Sales of reserves in place | — | — | — | |||||||||
Extensions and discoveries | 488 | 8,531 | 11,459 | |||||||||
Total proved reserves at December 31, 2003 | 12,521 | 74,660 | 149,786 | |||||||||
Revision of previous estimates | (1,412 | ) | (2,184 | ) | (10,656 | ) | ||||||
Production | (2,593 | ) | (25,957 | ) | (41,515 | ) | ||||||
Purchases of reserves in place | — | — | — | |||||||||
Sales of reserves in place | (1 | ) | (697 | ) | (703 | ) | ||||||
Extensions and discoveries | 2,002 | 7,382 | 19,394 | |||||||||
Total proved reserves at December 31, 2004 | 10,517 | 53,204 | 116,306 | |||||||||
Revision of previous estimates | (403 | ) | (1,124 | ) | (3,542 | ) | ||||||
Production | (2,473 | ) | (18,137 | ) | (32,975 | ) | ||||||
Purchases of reserves in place | 6,653 | 91,089 | 131,007 | |||||||||
Sales of reserves in place | — | — | — | |||||||||
Extensions and discoveries | 579 | 11,041 | 14,515 | |||||||||
Total proved reserves at December 31, 2005 | 14,873 | 136,073 | 225,311 | |||||||||
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2005 | 2004 | 2003 | ||||||||||
Future cash inflows | $ | 2,131,985 | $ | 756,668 | $ | 807,868 | ||||||
Future costs — | ||||||||||||
Production | (311,163 | ) | (125,350 | ) | (127,530 | ) | ||||||
Development and abandonment | (450,558 | ) | (146,131 | ) | (145,268 | ) | ||||||
Future net cash flows before income taxes | 1,370,264 | 485,187 | 535,070 | |||||||||
Future income taxes | (433,335 | ) | (144,263 | ) | (154,046 | ) | ||||||
Future net cash flows | 936,929 | 340,924 | 381,024 | |||||||||
Discount at 10% annual rate | (209,867 | ) | (54,185 | ) | (71,586 | ) | ||||||
Standardized measure of discounted future net cash flows | $ | 727,062 | $ | 286,739 | $ | 309,438 | ||||||
2005 | 2004 | 2003 | ||||||||||
Standardized measure, beginning of year | $ | 286,739 | $ | 309,438 | $ | 211,727 | ||||||
Sales, net of production costs | (213,113 | ) | (203,856 | ) | (103,372 | ) | ||||||
Net change in prices, net of production costs | 194,965 | 92,395 | 102,319 | |||||||||
Changes in future development costs | (63,621 | ) | (17,474 | ) | (3,339 | ) | ||||||
Development costs incurred | 67,193 | 38,373 | 79,289 | |||||||||
Accretion of discount | 40,808 | 43,048 | 21,173 | |||||||||
Net change in income taxes | (214,936 | ) | 3,770 | (37,127 | ) | |||||||
Purchases of reserves in place | 575,320 | — | 4,994 | |||||||||
Extensions and discoveries | 80,720 | 55,743 | 21,224 | |||||||||
Sales of reserves in place | — | (3,077 | ) | — | ||||||||
Net change due to revision in quantity estimates | (12,442 | ) | (32,025 | ) | 11,312 | |||||||
Changes in production rates (timing) and other | (14,571 | ) | 404 | 1,238 | ||||||||
Standardized measure, end of year | $ | 727,062 | $ | 286,739 | $ | 309,438 | ||||||
2005 | 2004 | 2003 | ||||||||||
Beginning balance | $ | 7,768 | $ | 7,462 | $ | 6,390 | ||||||
Additions | 2,577 | 2,745 | 2,688 | |||||||||
Deductions | (9,760 | ) | (2,439 | ) | (1,616 | ) | ||||||
Ending balance | $ | 585 | $ | 7,768 | $ | 7,462 | ||||||
17. | Subsequent Events |
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18. | Quarterly Financial Information (Unaudited) |
Quarter Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Fiscal 2005 Revenues | $ | 159,575 | $ | 166,531 | $ | 209,338 | $ | 264,028 | ||||||||
Gross profit | 51,873 | 52,419 | 82,928 | 95,852 | ||||||||||||
Net income | 25,961 | 26,577 | 43,221 | 56,810 | ||||||||||||
Net income applicable to common shareholders | 25,411 | 26,027 | 42,671 | 56,006 | ||||||||||||
Earnings per common share: | ||||||||||||||||
Basic | 0.33 | 0.34 | 0.55 | 0.72 | ||||||||||||
Diluted | 0.32 | 0.32 | 0.53 | 0.69 | ||||||||||||
Fiscal 2004 Revenues | $ | 120,714 | $ | 127,701 | $ | 131,987 | $ | 162,990 | ||||||||
Gross profit | 31,741 | 41,415 | 45,726 | 53,030 | ||||||||||||
Net income | 14,009 | 18,592 | 23,787 | 26,271 | ||||||||||||
Net income applicable to common shareholders | 13,645 | 18,208 | 22,794 | 25,269 | ||||||||||||
Earnings per common share: | ||||||||||||||||
Basic: | 0.18 | 0.24 | 0.30 | 0.33 | ||||||||||||
Diluted: | 0.18 | 0.24 | 0.29 | 0.32 |
19. | Subsequent Events (Unaudited) |
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts) | ||||||||||||||||
Helix and | ||||||||||||||||
Remington | ||||||||||||||||
Pro Forma | Pro forma | |||||||||||||||
Year Ended December 31, 2005 | Helix | Remington | Adjustments | Combined | ||||||||||||
Net revenues and other income | $ | 799,472 | $ | 270,529 | $ | (2,229 | )(a) | $ | 1,067,772 | |||||||
Cost of sales: | ||||||||||||||||
Depreciation, depletion and amortization | 111,473 | 60,351 | 48,377 | (b) | 220,201 | |||||||||||
Operating Expenses | 404,927 | 84,824 | (2,229 | )(a) | 487,522 | |||||||||||
Gross Profit | 283,072 | 125,354 | (48,377 | ) | 360,049 | |||||||||||
Gain on sale of assets | 1,405 | — | — | 1,405 | ||||||||||||
Selling and administrative expenses | 62,790 | 15,182 | — | 77,972 | ||||||||||||
Income from operations | 221,687 | 110,172 | (48,377 | ) | 283,482 | |||||||||||
Equity in earnings of investments | 13,459 | — | — | 13,459 | ||||||||||||
Net interest expense and other | 7,559 | 613 | 43,288 | (c) | 51,460 | |||||||||||
Income before income taxes | 227,587 | 109,559 | (91,665 | ) | 245,481 | |||||||||||
Provision for income taxes | 75,019 | 38,992 | (32,083 | )(d) | 81,928 | |||||||||||
Net income | 152,568 | 70,567 | (59,582 | ) | 163,553 | |||||||||||
Preferred stock dividends and accretions | 2,454 | — | — | 2,454 | ||||||||||||
Net income applicable to common shareholders | $ | 150,114 | $ | 70,567 | $ | (59,582 | ) | $ | 161,099 | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 1.94 | $ | 2.48 | $ | 1.78 | ||||||||||
Diluted | $ | 1.86 | $ | 2.37 | $ | 1.72 | ||||||||||
Weighted average common share outstanding: | ||||||||||||||||
Basic | 77,444 | 28,488 | 13,148 | (e) | 90,592 | |||||||||||
Diluted | 82,205 | 29,722 | 13,148 | (e) | 95,353 |
(a) | Reflects the elimination of sales and related operating expenses between Helix and Remington. | |
(b) | Reflects estimated increases in depreciation, depletion and amortization related to the “step-up” of the acquired properties to their fair value. Adjustment calculated as the incremental depreciation, depletion and amortization rate based on the purchase price applied to the 2005 production for Remington. | |
(c) | Reflects the increase in long-term debt of $814 million to fund the cash portion of the purchase price at estimated annual interest rate for 2005 of 5.32%. | |
(d) | The pro forma adjustment to income tax reflects the statutory federal and state income tax impacts of the pro forma adjustments to Helix’s pretax income. Applied tax rate of 35%. | |
(e) | Reflects the issuance of 13.1 million shares of Helix stock to be issued to Remington stockholders as consideration in the acquisition. |
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UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(in thousands) | ||||||||||||||||
Helix and | ||||||||||||||||
Remington | ||||||||||||||||
Pro Forma | Pro forma | |||||||||||||||
As of December 31, 2005 | Helix | Remington | Adjustments | Combined | ||||||||||||
Assets | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 91,080 | $ | 38,860 | $ | (20,000 | )(a) | $ | 109,940 | |||||||
Accounts receivable - | ||||||||||||||||
Trade, net of allowance for uncollectible amounts | 197,046 | 66,887 | — | 263,933 | ||||||||||||
Unbilled revenue | 31,012 | — | — | 31,012 | ||||||||||||
Insurance receivable | — | 23,308 | — | 23,308 | ||||||||||||
Income tax receivable | — | 5,767 | — | 5,767 | ||||||||||||
Deferred income taxes | 8,861 | — | — | 8,861 | ||||||||||||
Other current assets | 44,054 | 5,466 | — | 49,520 | ||||||||||||
Total current assets | 372,053 | 140,288 | (20,000 | ) | 492,341 | |||||||||||
Net property and equipment | 916,362 | 443,905 | 832,403 | (a) | 2,192,670 | |||||||||||
Other assets: | ||||||||||||||||
Equity investments | 179,556 | — | — | 179,556 | ||||||||||||
Goodwill, net | 101,731 | — | 429,870 | (a),(d) | 531,601 | |||||||||||
Other assets, net | 91,162 | 1,872 | — | 93,034 | ||||||||||||
$ | 1,660,864 | $ | 586,065 | $ | 1,242,273 | $ | 3,489,202 | |||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 99,445 | $ | 76,561 | $ | — | $ | 176,006 | ||||||||
Accrued liabilities | 145,752 | 1,094 | — | 146,846 | ||||||||||||
Current maturities of long term debt | 6,468 | — | 8,142 | (b) | 14,610 | |||||||||||
Total current liabilities | 251,665 | 77,655 | 8,142 | 337,462 | ||||||||||||
Long-term debt | 440,703 | — | 806,082 | (b) | 1,246,785 | |||||||||||
Deferred income taxes | 167,295 | 82,876 | 273,672 | (d) | 523,843 | |||||||||||
Decommissioning liabilities | 106,317 | 21,375 | — | 127,692 | ||||||||||||
Other long-term liabilities | 10,584 | — | — | 10,584 | ||||||||||||
Total liabilities | 976,564 | 181,906 | 1,087,896 | 2,246,366 | ||||||||||||
Convertible preferred stock | 55,000 | — | — | 55,000 | ||||||||||||
Shareholders’ equity | 629,300 | 404,159 | 154,377 | (c) | 1,187,836 | |||||||||||
$ | 1,660,864 | $ | 586,065 | $ | 1,242,273 | �� | $ | 3,489,202 | ||||||||
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(a) | The following is a preliminary estimate of the deemed purchase price for Remington on a purchase accounting basis: |
Thousands of Dollars | ||||
Cash | $ | 814,224 | ||
30,156,452 Remington estimated diluted shares times $27.00 per share | ||||
Helix Stock | 558,536 | |||
30,156,452 Remington estimated diluted shares times .436 times $42.48 per share | ||||
Transaction Related Costs | 20,000 | |||
Estimated direct transaction fees payable by Helix to be capitalized as part of the purchase price for Remington | $ | 1,392,760 | ||
Purchase Price Allocation | Thousands of Dollars | |||
Current assets | $ | 140,288 | ||
Property and equipment | 1,276,308 | |||
Other long-term assets | 1,872 | |||
Goodwill | 429,870 | |||
Current liabilities | (77,655 | ) | ||
Deferred income taxes | (356,548 | ) | ||
Decommissioning liabilities | (21,375 | ) | ||
$ | 1,392,760 | |||
(b) | Reflects the increase in long-term debt to fund the cash portion of the purchase price at estimated annual interest rate for 2005 of 5.32%. | |
(c) | Reflects the elimination of book value of Remington equity and the issuance of 13.1 million shares of Helix stock to be issued to Remington stockholders as consideration in the acquisition. | |
(d) | Reflects the deferred tax “gross-up” relating to the acquired proven reserves based on purchase price paid. |
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(UNAUDITED)
Helix | Remington | |||||||||||
Historical | Historical | Pro Forma | ||||||||||
Consolidated Operations | ||||||||||||
Crude oil (in MBbls) | 14,873 | 18,381 | 33,254 | |||||||||
Natural gas (in MMcf) | 136,073 | 168,659 | 304,732 | |||||||||
Total (in MMcfe) | 225,311 | 278,945 | 504,256 | |||||||||
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Thousands of Dollars | ||||||||||||
Helix | Remington | |||||||||||
Historical | Historical* | Pro Forma | ||||||||||
Consolidated Operations | ||||||||||||
Future cash flows | ||||||||||||
Revenues | $ | 2,131,985 | $ | 2,713,983 | $ | 4,845,968 | ||||||
Production costs | (311,163 | ) | (200,297 | ) | (511,460 | ) | ||||||
Development and abandonment costs | (450,558 | ) | (148,514 | ) | (599,072 | ) | ||||||
Income tax expense | (433,335 | ) | (706,403 | ) | (1,139,738 | ) | ||||||
Future net cash flows | 936,929 | 1,658,769 | 2,595,698 | |||||||||
Discounted to present value at 10% annual rate | (209,867 | ) | (421,786 | ) | (631,653 | ) | ||||||
Total | $ | 727,062 | $ | 1,236,983 | $ | 1,964,045 | ||||||
* | Certain amounts reclassified to conform to Helix’s presentation. |
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• | the designation of the series; | ||
• | the number of shares of the series, which number the board may thereafter (except where otherwise provided in the certificate of designation) increase or decrease (but not below the number of shares then outstanding); | ||
• | whether dividends, if any, will be cumulative or noncumulative and the dividend rate of the series; | ||
• | the dates at which dividends, if any, will be payable; | ||
• | the redemption rights and price or prices, if any, for shares of the series; | ||
• | the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series; | ||
• | the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Helix; | ||
• | whether the shares of the series will be convertible into shares of any other class or series, or any other security, of Helix or any other corporation, and, if so, the specification of the other class or series or the other security, the conversion price or prices or rate or rates, any adjustments thereof, the date or dates as of which such shares shall be convertible and all of the terms and conditions upon which such conversion may be made; | ||
• | restrictions, if any, on the issuance of shares of the same series or of any other class or series; and | ||
• | voting rights, if any, of the shareholder of such series, which may include the right of such shareholders to vote separately as a class on any matter. |
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• | the prohibition of shareholder action without a meeting; | ||
• | the prohibition of shareholders calling a special meeting; · the number, election and term of our directors; | ||
• | the removal of directors; and | ||
• | fixing a quorum for meetings of shareholders. |
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• | Remington’s Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2005. | ||
• | Remington’s Current Reports on Form 8-K filed on March 17, 2006. |
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ARTICLE I | DEFINITIONS | A-1 | ||||
Section 1.1 | Defined Terms | A-1 | ||||
Section 1.2 | References and Titles | A-7 | ||||
ARTICLE II | THE MERGER | A-7 | ||||
Section 2.1 | The Merger | A-7 | ||||
Section 2.2 | Effect of the Merger | A-8 | ||||
Section 2.3 | Governing Instruments, Directors and Officers of the Surviving Corporation | A-8 | ||||
Section 2.4 | Effect on Securities | A-8 | ||||
Section 2.5 | [RESERVED] | A-9 | ||||
Section 2.6 | Exchange of Certificates | A-9 | ||||
Section 2.7 | Closing | A-11 | ||||
Section 2.8 | Effective Time of the Merger | A-11 | ||||
Section 2.9 | Taking of Necessary Action; Further Action | A-11 | ||||
Section 2.10 | Withholding | A-11 | ||||
ARTICLE III | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-12 | ||||
Section 3.1 | Organization | A-12 | ||||
Section 3.2 | Other Equity Interests | A-12 | ||||
Section 3.3 | Authority and Enforceability | A-12 | ||||
Section 3.4 | No Violations | A-12 | ||||
Section 3.5 | Consents and Approvals | A-12 | ||||
Section 3.6 | SEC Documents | A-13 | ||||
Section 3.7 | Financial Statements | A-13 | ||||
Section 3.8 | Capital Structure | A-13 | ||||
Section 3.9 | No Undisclosed Liabilities | A-14 | ||||
Section 3.10 | Absence of Certain Changes or Events | A-14 | ||||
Section 3.11 | Contracts | A-15 | ||||
Section 3.12 | Compliance with Laws, Material Agreements and Permits | A-15 | ||||
Section 3.13 | Governmental Regulation | A-16 | ||||
Section 3.14 | Litigation | A-16 | ||||
Section 3.15 | No Restrictions | A-16 | ||||
Section 3.16 | Taxes | A-16 | ||||
Section 3.17 | Employee Benefit Plans; Labor Matters | A-17 | ||||
Section 3.18 | Employment Contracts and Benefits | A-18 | ||||
Section 3.19 | [RESERVED] | A-18 | ||||
Section 3.20 | Insurance | A-18 | ||||
Section 3.21 | Intellectual Property | A-18 | ||||
Section 3.22 | Title to Assets | A-18 | ||||
Section 3.23 | Oil and Gas Operations | A-18 | ||||
Section 3.24 | Environmental Matters | A-19 | ||||
Section 3.25 | Books and Records | A-20 | ||||
Section 3.26 | Brokers | A-20 | ||||
Section 3.27 | Affiliate Transactions | A-20 | ||||
Section 3.28 | Disclosure Controls and Procedures | A-20 | ||||
Section 3.29 | Derivative Transactions and Hedging | A-20 | ||||
Section 3.30 | Vote Required | A-21 | ||||
Section 3.31 | Recommendation of Company Board of Directors; Opinion of Financial Advisor | A-21 | ||||
Section 3.32 | Imbalances | A-21 | ||||
Section 3.33 | Preferential Purchase Rights | A-21 | ||||
Section 3.34 | No Tax Partnership | A-21 | ||||
Section 3.35 | Royalties | A-21 | ||||
Section 3.36 | State Takeover Laws | A-21 | ||||
Section 3.37 | Earnings Announcement | A-21 | ||||
ARTICLE IV | REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | A-21 | ||||
Section 4.1 | Organization | A-21 | ||||
Section 4.2 | Other Equity Interests | A-22 | ||||
Section 4.3 | Authority and Enforceability | A-22 |
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Section 4.4 | No Violations | A-22 | ||||
Section 4.5 | Consents and Approvals | A-22 | ||||
Section 4.6 | SEC Documents | A-22 | ||||
Section 4.7 | Financial Statements | A-22 | ||||
Section 4.8 | Capital Structure | A-23 | ||||
Section 4.9 | No Undisclosed Liabilities | A-23 | ||||
Section 4.10 | Absence of Certain Changes or Events | A-23 | ||||
Section 4.11 | Contracts | A-24 | ||||
Section 4.12 | Compliance with Laws, Material Agreements and Permits | A-25 | ||||
Section 4.13 | Governmental Regulation | A-25 | ||||
Section 4.14 | Litigation | A-25 | ||||
Section 4.15 | No Restrictions | A-25 | ||||
Section 4.16 | Taxes | A-26 | ||||
Section 4.17 | Employee Benefit Plans; Labor Matters | A-26 | ||||
Section 4.18 | Employment Contracts and Benefits | A-27 | ||||
Section 4.19 | [RESERVED] | A-27 | ||||
Section 4.20 | Insurance | A-27 | ||||
Section 4.21 | Intellectual Property | A-27 | ||||
Section 4.22 | Title to Assets | A-27 | ||||
Section 4.23 | Oil and Gas Operations | A-27 | ||||
Section 4.24 | Environmental Matters | A-28 | ||||
Section 4.25 | Books and Records | A-29 | ||||
Section 4.26 | Brokers | A-29 | ||||
Section 4.27 | Affiliate Transactions | A-29 | ||||
Section 4.28 | Disclosure Controls and Procedures | A-29 | ||||
Section 4.29 | Derivative Transactions and Hedging | A-29 | ||||
Section 4.30 | No Vote Required | A-29 | ||||
Section 4.31 | Funding | A-30 | ||||
Section 4.32 | Interim Operations of Merger Sub | A-30 | ||||
Section 4.33 | Imbalances | A-30 | ||||
Section 4.34 | Preferential Purchase Rights | A-30 | ||||
Section 4.35 | No Tax Partnership | A-30 | ||||
Section 4.36 | Royalties | A-30 | ||||
ARTICLE V | COVENANTS | A-30 | ||||
Section 5.1 | Conduct of Business by Parent Pending Closing | A-30 | ||||
Section 5.2 | Conduct of Business by the Company Pending Closing | A-31 | ||||
Section 5.3 | Access to Assets, Personnel and Information | A-32 | ||||
Section 5.4 | No Solicitation | A-33 | ||||
Section 5.5 | Company Stockholders’ Meeting | A-34 | ||||
Section 5.6 | Registration Statement and Proxy Statement/Prospectus | A-34 | ||||
Section 5.7 | Stock Exchange Listing | A-35 | ||||
Section 5.8 | Additional Agreements | A-35 | ||||
Section 5.9 | Agreements of Affiliates | A-36 | ||||
Section 5.10 | Section 16 | A-36 | ||||
Section 5.11 | Public Announcements | A-36 | ||||
Section 5.12 | Notification of Certain Matters | A-36 | ||||
Section 5.13 | Payment of Expenses | A-36 | ||||
Section 5.14 | Indemnification and Insurance | A-36 | ||||
Section 5.15 | Employee Benefits | A-38 | ||||
Section 5.16 | Parent Board of Directors | A-38 | ||||
Section 5.17 | Tax Matters | A-38 | ||||
Section 5.18 | Formation of Merger Sub | A-38 | ||||
ARTICLE VI | CONDITIONS | A-39 | ||||
Section 6.1 | Conditions to Each Party’s Obligation to Effect the Merger | A-39 | ||||
Section 6.2 | Conditions to Obligations of Parent and Merger Sub | A-39 | ||||
Section 6.3 | Conditions to Obligations of the Company | A-40 | ||||
ARTICLE VII | TERMINATION | A-40 | ||||
Section 7.1 | Termination Rights | A-40 | ||||
Section 7.2 | Effect of Termination | A-41 | ||||
Section 7.3 | Fees and Expenses | A-42 |
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ARTICLE VIII | MISCELLANEOUS | A-42 | ||||
Section 8.1 | Nonsurvival of Representations and Warranties | A-42 | ||||
Section 8.2 | Amendment | A-42 | ||||
Section 8.3 | Notices | A-42 | ||||
Section 8.4 | Counterparts | A-43 | ||||
Section 8.5 | Severability | A-43 | ||||
Section 8.6 | Entire Agreement; No Third Party Beneficiaries | A-43 | ||||
Section 8.7 | Applicable Law | A-43 | ||||
Section 8.8 | No Remedy in Certain Circumstances | A-43 | ||||
Section 8.9 | Assignment | A-43 | ||||
Section 8.10 | Waivers | A-43 | ||||
Section 8.11 | Confidentiality Agreement | A-43 | ||||
Section 8.12 | Incorporation | A-43 | ||||
EXHIBIT 5.9 | Form of Affiliate Letter | A-45 | ||||
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER | A-48 |
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Acquisition Proposal | A-1 | |||
Affiliate | A-1 | |||
Aggregate Merger Consideration | A-1 | |||
Agreement | A-1 | |||
Benefit Plan | A-1 | |||
Cash Consideration | A-2 | |||
CERCLA | A-2 | |||
CERCLIS | A-2 | |||
Certificate of Merger | A-2 | |||
Claim | A-37 | |||
Closing | A-2 | |||
Closing Date | A-2 | |||
Code | A-1 | |||
Company | A-1 | |||
Company Bank Credit Agreement | A-2 | |||
Company Benefit Plan | A-2 | |||
Company Certificate | A-2 | |||
Company Common Stock | A-2 | |||
Company Disclosure Schedule | A-2 | |||
Company Employees | A-2 | |||
Company Financial Statements | A-2 | |||
Company Material Agreement(s) | A-2 | |||
Company Meeting | A-2 | |||
Company Permits | A-16 | |||
Company Preferred Stock | A-2 | |||
Company Proposal | A-2 | |||
Company Representative | A-3 | |||
Company Reserve Report | A-3 | |||
Company Restricted Stock | A-3 | |||
Company SEC Documents | A-13 | |||
Company Severance Programs | A-18 | |||
Company Stock Incentive Plan | A-3 | |||
Company Stock Option | A-3 | |||
Company Subsidiary(ies) | A-3 | |||
Company’s Oil and Gas Interests | A-5 | |||
Confidentiality Agreement | A-3 | |||
Control | A-1 | |||
Controlled By | A-1 | |||
Conversion Number | A-3 | |||
Deemed Outstanding Company Option Shares | A-8 | |||
Deemed Surrendered Shares | A-8 | |||
Defensible Title | A-3 | |||
Derivative Transaction | A-3 | |||
DGCL | A-1 | |||
Disclosure Schedule | A-3 | |||
Dissenting Stock | A-3 | |||
Dissenting Stockholders | A-3 | |||
Effective Time | A-11 | |||
Environmental Law | A-3 | |||
ERISA | A-3 | |||
Exchange Act | A-3 | |||
Exchange Agent | A-3 | |||
Exchange Fund | A-9 | |||
GAAP | A-3 | |||
Governmental Action | A-4 | |||
Governmental Authority | A-4 | |||
Hazardous Material | A-4 | |||
HSR Act | A-4 | |||
Hydrocarbons | A-4 | |||
Indemnified Parties | A-37 | |||
Joint Release | A-36 | |||
Laws | A-4 | |||
Lien | A-4 | |||
Market Price | A-4 | |||
Material Adverse Effect | A-4 | |||
Merger | A-1 | |||
Merger Consideration | A-8 | |||
Merger Sub | A-1 | |||
Merger Sub Common Stock | A-4 | |||
National Stock Exchange | A-4 | |||
New Plans | A-38 | |||
Oil and Gas Interest(s) | A-4 | |||
Oil and Gas Interests of Parent | A-5 | |||
Oil and Gas Interests of the Company | A-5 | |||
Old Plans | A-38 | |||
Other Business Interests of Parent | A-5 | |||
Ownership Interests | A-5 | |||
Parent | A-1 | |||
Parent Bank Credit Agreement | A-5 | |||
Parent Benefit Plan | A-5 | |||
Parent Certificate | A-5 | |||
Parent Common Stock | A-5 | |||
Parent Companies | A-5 | |||
Parent Disclosure Schedule | A-5 | |||
Parent Expenses | A-5 | |||
Parent Financial Statements | A-5 | |||
Parent Material Agreement(s) | A-5 | |||
Parent Permits | A-25 | |||
Parent Representative | A-5 |
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Parent Reserve Report | A-6 | |||
Parent SEC Documents | A-22 | |||
Parent Subsidiary(ies) | A-6 | |||
Parent’s Oil and Gas Interests | A-5 | |||
Parties | A-1 | |||
PBGC | A-6 | |||
Permitted Encumbrances | A-6 | |||
Person | A-6 | |||
Proxy Statement/Prospectus | A-6 | |||
RCRA | A-6 | |||
Registration Statement | A-6 | |||
Required Company Vote | A-6 | |||
Reserve Data Value | A-7 | |||
Responsible Officers | A-7 | |||
SEC | A-7 | |||
Securities Act | A-7 | |||
SOX | A-7 | |||
Superior Proposal | A-7 | |||
Surviving Corporation | A-8 | |||
Target Companies | A-7 | |||
Tax Returns | A-16 | |||
Tax Withholding Amounts | A-8 | |||
Taxes | A-7 | |||
Third-Party Consent | A-7 | |||
Under Common Control With | A-1 |
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To Parent and/or | ||||
Merger Sub: | Cal Dive International, Inc. | |||
400 N. Sam Houston Parkway E., | ||||
Suite 400 | ||||
Houston, TX 77060 | ||||
Facsimile no.: (281) 618-0505 | ||||
Attention: Martin Ferron | ||||
with a copy to: | Fulbright & Jaworski L.L.P. | |||
Fulbright Tower | ||||
1301 McKinney, Suite 5100 | ||||
Houston, TX 77010 | ||||
Facsimile no.: 713-651-5246 | ||||
Attention: Arthur H. Rogers | ||||
To the Company: | Remington Oil and Gas Corporation | |||
8201 Preston Rd., Suite 500 | ||||
Dallas, TX 75225 | ||||
Facsimile no.: (214) 210-2643 | ||||
Attention: James A. Watt | ||||
with a copy to: | Andrews Kurth LLP | |||
600 Travis, Suite 4200 | ||||
Houston, TX 77002-3090 | ||||
Facsimile no.: 713-220-4285 | ||||
Attention: Michael O’Leary |
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COMPANY: REMINGTON OIL AND GAS CORPORATION, a Delaware corporation | ||||
By: /s/ JAMES A. WATT | ||||
Name: James A. Watt | ||||
Title: Chairman and Chief Executive Officer | ||||
PARENT: CAL DIVE INTERNATIONAL, INC., a Minnesota corporation | ||||
By: /s/ MARTIN FERRON | ||||
Name: Martin Ferron | ||||
Title: President | ||||
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, 2006
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Very truly yours, | ||||||||||
By: | ||||||||||
Name: | ||||||||||
Accepted this ____day of | ||||||||||
, 2006 | ||||||||||
CAL DIVE INTERNATIONAL, INC. | ||||||||||
By | ||||||||||
Name: | ||||||||||
Title: | ||||||||||
[MERGER SUB] | ||||||||||
By | ||||||||||
Name: | ||||||||||
Title: | ||||||||||
REMINGTON OIL AND GAS CORPORATION | ||||||||||
By | ||||||||||
Name: | ||||||||||
Title: | ||||||||||
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TO
AGREEMENT AND PLAN OF MERGER
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COMPANY: | ||||||
REMINGTON OIL AND GAS CORPORATION, a Delaware corporation | ||||||
By: | /s/ JAMES A. WATT | |||||
Name: James A. Watt | ||||||
Title: Chairman and Chief Executive Officer | ||||||
PARENT: | ||||||
CAL DIVE INTERNATIONAL, INC., a Minnesota corporation | ||||||
By: | /s/ JAMES LEWIS CONNOR, III | |||||
Name: James Lewis Connor, III | ||||||
Title: Senior Vice President | ||||||
MERGER SUB: | ||||||
CAL DIVE MERGER — DELAWARE, INC., a Delaware corporation | ||||||
By: | /s/ JAMES LEWIS CONNOR, III | |||||
Name: James Lewis Connor, III | ||||||
Title: Vice President |
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Remington Oil & Gas Corporation
8201 Preston Road, Suite 600
Dallas, Texas 75225
(i) | Reviewed a draft of the Agreement dated January 22, 2006, participated in certain limited negotiations concerning the Merger among representatives of the Company and Cal Dive and discussed with the officers of the Company the course of other negotiations with Cal Dive; | ||
(ii) | Reviewed certain financial and other information about the Company and Cal Dive that was publicly available and that we deemed relevant; | ||
(iii) | Reviewed certain internal financial and operating information, including financial projections relating to the Company that were provided to us by the Company, taking into account (a) the growth prospects of the Company, (b) the Company’s historical and current fiscal year financial performance and track record of meeting its forecasts, and (c) the Company’s forecasts going forward and its ability to meet them; | ||
(iv) | Reviewed the corporate budget of Cal Dive for 2006; | ||
(v) | Met with the Company’s and Cal Dive’s managements regarding the business prospects, financial outlook and operating plans of the Company and Cal Dive, respectively, and held discussions concerning the impact on the Company and Cal Dive and their prospects of the economy and the conditions in the Company’s industry; | ||
(vi) | Reviewed the market prices and valuation multiples for the Company common stock and Cal Dive common stock; |
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(vii) | Compared the valuation in the public market of companies we deemed similar to that of the Company in market, services offered, and size; | ||
(viii) | Reviewed public information concerning the financial terms of certain recent transactions that we deemed comparable to the Merger; | ||
(ix) | Performed a discounted cash flow analysis to analyze the present value of the future cash flow streams that the Company has indicated it expects to generate; | ||
(x) | Reviewed certain proved oil and gas reserve data furnished to us by the Company and Cal Dive, including the 2004 year end reserve report for the Company and Cal Dive prepared by independent reserve engineers as well as internal 2005 year end projected reserve information of the Company and Cal Dive furnished to us by the Company and Cal Dive, respectively; and | ||
(xi) | Reviewed the potential pro forma impact of the Merger. |
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2.1 | Agreement and Plan of Merger dated January 22, 2006, among Cal Dive International, Inc. and Remington Oil and Gas Corporation, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K/A, filed by the registrant with the Securities and Exchange Commission on January 25, 2006 (the “Form 8-K/A”). | |
2.2 | Amendment No. 1 to Agreement and Plan of Merger dated January 24, 2006, by and among, Cal Dive International, Inc., Cal Dive Merger – Delaware, Inc. and Remington Oil and Gas Corporation, incorporated by reference to Exhibit 2.2 to the Form 8-K/A. | |
2.3 | Asset Purchase Agreement by and between Cal Dive International, Inc., as Buyer, and Stolt Offshore Inc. and S&H Diving LLC, as Sellers, dated April 11, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on April 13, 2005. | |
2.4 | Amendment to Asset Purchase Agreement by and between Cal Dive International, Inc., as Buyer, and Stolt Offshore Inc., S&H Diving LLC and SCS Shipping Limited, as Sellers, dated November 1, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on November 4, 2005. | |
3.1 | 2005 Amended and Restated Articles of Incorporation, as amended, of registrant, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by registrant with the Securities and Exchange Commission on December 14, 2005. | |
3.2 | Second Amended and Restated By-Laws of Cal Dive International, Inc., as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on December 1, 2005. | |
3.3 | Certificate of Rights and Preferences for Series A-1 Cumulative Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by registrant with the Securities and Exchange Commission on January 22, 2003 (the “2003 Form 8-K”). | |
3.4 | Certificate of Rights and Preferences for Series A-2 Cumulative Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by registrant with the Securities and Exchange Commission on June 28, 2004 (the “2004 Form 8-K”). | |
4.1 | Credit Agreement by and among Bank of America, N.A., et al., as Lenders, and Helix Energy Solutions Group, Inc., as Borrower, dated August 16, 2004, incorporated by reference to Exhibit 4.1 to the registrant’s Annual Report on 10-Q for the fiscal quarter ended September 30, 2004, filed by the registrant with the Securities and Exchange Commission on November 5, 2004 (the “2004 Form 10-Q”). | |
4.2 | Participation Agreement among ERT, Helix Energy Solutions Group, Inc., Cal Dive/Gunnison Business Trust No. 2001-1 and Bank One, N.A., et. al., dated as of November 8, 2001, incorporated by reference to Exhibit 4.2 to Form 10-K for the fiscal year ended December 31, 2001, filed by the registrant with the Securities and Exchange Commission on March 28, 2002 (the “2001 Form 10-K”). | |
4.3 | Form of Common Stock certificate, incorporated by reference to Exhibit 4.1 to the Form S-1. | |
4.4 | Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of August 16, 2000, incorporated by reference to Exhibit 4.4 to the 2001 Form 10-K. | |
4.5 | Amendment No. 1 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of January 25, 2002, incorporated by reference to Exhibit 4.9 to the 2002 Form 10-K/A. | |
4.6 | Amendment No. 2 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of November 15, 2002, incorporated by reference to Exhibit 4.4 to the 2003 Form S-3. | |
4.7 | First Amended and Restated Agreement dated January 17, 2003, but effective as of December 31, 2002, by and between Helix Energy Solutions Group, Inc. and Fletcher International, Ltd., incorporated by reference to Exhibit 10.1 to the 2003 Form 8-K. | |
4.8 | Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated July 26, 2002, incorporated by reference to Exhibit 4.12 to the 2002 Form 10-K/A. | |
4.9 | First Amendment to Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated January 7, 2003, incorporated by reference to Exhibit 4.13 to the 2002 Form 10-K/A. |
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4.10 | Second Amendment to Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated February 14, 2003, incorporated by reference to Exhibit 4.14 to the 2002 Form 10-K/A. | |
4.11 | Lease with Purchase Option Agreement between Banc of America Leasing & Capital, LLC and Canyon Offshore Ltd. dated July 31, 2003 incorporated by reference to Exhibit 10.1 to the Form 10-Q for the fiscal quarter ended September 30, 2003, filed by the registrant with the Securities and Exchange Commission on November 13, 2003. | |
4.12 | Amendment No. 3 Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of July 31, 2003, incorporated by reference to Exhibit 4.12 to Annual Report on Form 10-K for the year ended December 31, 2004, filed by the registrant with the Securities Exchange Commission on March 16, 2005 (the “2004 10-K”). | |
4.13 | Amendment No. 4 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of December 15, 2004 , incorporated by reference to Exhibit 4.13 to the 2004 10-K. | |
4.14 | Second Amendment to Credit Agreement dated March 21, 2005, made by and between Company and Bank of America, N.A., et al., incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on March 23, 2005. | |
4.15 | Indenture relating to the 3.25% Convertible Senior Notes due 2025 dated as of March 30, 2005, between Cal Dive International, Inc. and JPMorgan Chase Bank, National Association, as Trustee., incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on April 4, 2005 (the “April 2005 8-K”). | |
4.16 | Form of 3.25% Convertible Senior Note due 2025 (filed as Exhibit A to Exhibit 4.15). | |
4.17 | Registration Rights Agreement dated as of March 30, 2005, between Cal Dive International, Inc. and Banc of America Securities LLC, as representative of the initial purchasers, incorporated by reference to Exhibit 4.3 to the April 2005 8-K. | |
4.18 | Trust Indenture, dated as of August 16, 2000, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on October 6, 2005 (the “October 2005 8-K”). | |
4.19 | Supplement No. 1 to Trust Indenture, dated as of January 25, 2002, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.2 to the October 2005 8-K. | |
4.20 | Supplement No. 2 to Trust Indenture, dated as of November 15, 2002, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.3 to the October 2005 8-K. | |
4.21 | Supplement No. 3 to Trust Indenture, dated as of December 14, 2004, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.4 to the October 2005 8-K. | |
4.22 | Supplement No. 4 to Trust Indenture, dated September 30, 2005, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.5 to the October 2005 8-K. | |
4.23 | Form of United States Government Guaranteed Ship Financing Bonds, Q4000 Series 4.93% Sinking Fund Bonds Due February 1, 2027 (filed as Exhibit A to Exhibit 4.22). | |
4.24 | Form of Third Amended and Restated Promissory Note to United States of America, incorporated by reference to Exhibit 4.6 to the October 2005 8-K. | |
5.1* | Opinion of Andrew C. Becher, Special Counsel to the registrant, regarding the legality of the common stock to be offered hereby | |
10.1 | 1995 Long Term Incentive Plan, as amended, incorporated by reference to Exhibit 10.3 to the Form S-1. | |
10.2 | Employment Agreement between Owen Kratz and Company dated February 28, 1999, incorporated by reference to Exhibit 10.5 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed by the registrant with the Securities and Exchange Commission on March 31, 1999 (the “1998 Form 10-K”). | |
10.3 | Employment Agreement between Martin R. Ferron and Company dated February 28, 1999, incorporated by reference to Exhibit 10.6 of the 1998 Form 10-K. | |
10.4 | Employment Agreement between A. Wade Pursell and Company dated January 1, 2002, incorporated by reference to Exhibit 10.7 of the 2001 Form 10-K. | |
10.5 | Employment Agreement between James Lewis Connor, III and Company dated May 1, 2002, incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed by the registrant with the Securities and Exchange Commission on March 15, 2004 (the “2003 Form 10-K”). | |
10.6 | First Amendment to Employment Agreement between James Lewis Connor, III and Company dated January 1, 2004, incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed by the registrant with the Securities and Exchange Commission on March 15, 2005 (the “2004 Form 10-K”). | |
10.7 | Cal Dive International, Inc. 2005 Long Term Incentive Plan, including the Form of Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on May 12, 2005. |
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10.8 | Employment Agreement by and between Cal Dive International, Inc. and Bart H. Heijermans, effective as of September 1, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on September 1, 2005. | |
21.1 | Subsidiaries of registrant – As of December 31, 2005, the registrant had thirteen subsidiaries: Energy Resource Technology, Inc.; Canyon Offshore, Inc.; Cal Dive ROV, Inc.; Cal Dive I-Title XI, Inc.; Cal Dive Offshore, Ltd.; Well Ops (U.K.) Limited; Well Ops Inc.; ERT (U.K.) Limited; Cal Dive HR Services Limited; Cal Dive Trinidad & Tobago Ltd.; Canyon Offshore Ltd.; Canyon Offshore International Corp.; and Well Ops PTE Limited. |
23.1* | Consent of Ernst & Young LLP. | |
23.2* | Consent of Ernst & Young LLP. | |
23.3* | Consent of Huddleston & Co., Inc. | |
23.4* | Consent of Netherland, Sewell & Associates, Inc. | |
23.5* | Consent of Andrew C. Becher (included in Exhibit 5.1). | |
24.1* | Powers of Attorney (included on the signature pages hereto). |
Consolidated Balance Sheets as of December 31, 2005 and 2004
Consolidated Statements of Operations for the Years Ended December 31, 2005, 2004 and 2003
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2005, 2004 and 2003
Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003
Notes to Consolidated Financial Statements.
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HELIX ENERGY SOLUTIONS GROUP, INC. | ||||||
By: | /s/ A. WADE PURSELL | |||||
A. Wade Pursell | ||||||
Senior Vice President, | ||||||
Chief Financial Officer |
Signature | Title | |
/s/ OWEN KRATZ | Chairman, Chief Executive Officer and Director (principal | |
executive officer) | ||
/s/ MARTIN R. FERRON | ||
President and Director | ||
/s/ A. WADE PURSELL | Senior Vice President and Chief Financial Officer (principal | |
financial officer) | ||
/s/ LLOYD A. HAJDIK | Vice President – Corporate Controller and Chief Accounting | |
Officer (principal accounting officer) | ||
/s/ GORDON F. AHALT | ||
Director | ||
/s/ BERNARD J. DUROC-DANNER | ||
Director | ||
/s/ JOHN V. LOVOI | ||
Director | ||
/s/ T. WILLIAM PORTER | ||
Director | ||
/s/ WILLIAM L. TRANSIER | ||
Director | ||
/s/ ANTHONY TRIPODO | ||
Director |
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2.1 | Agreement and Plan of Merger dated January 22, 2006, among Cal Dive International, Inc. and Remington Oil and Gas Corporation, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K/A, filed by the registrant with the Securities and Exchange Commission on January 25, 2006 (the “Form 8-K/A”). | |
2.2 | Amendment No. 1 to Agreement and Plan of Merger dated January 24, 2006, by and among, Cal Dive International, Inc., Cal Dive Merger – Delaware, Inc. and Remington Oil and Gas Corporation, incorporated by reference to Exhibit 2.2 to the Form 8-K/A. | |
2.3 | Asset Purchase Agreement by and between Cal Dive International, Inc., as Buyer, and Stolt Offshore Inc. and S&H Diving LLC, as Sellers, dated April 11, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on April 13, 2005. | |
2.4 | Amendment to Asset Purchase Agreement by and between Cal Dive International, Inc., as Buyer, and Stolt Offshore Inc., S&H Diving LLC and SCS Shipping Limited, as Sellers, dated November 1, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on November 4, 2005. | |
3.1 | 2005 Amended and Restated Articles of Incorporation, as amended, of registrant, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by registrant with the Securities and Exchange Commission on December 14, 2005. | |
3.2 | Second Amended and Restated By-Laws of Cal Dive International, Inc., as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on December 1, 2005. | |
3.3 | Certificate of Rights and Preferences for Series A-1 Cumulative Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by registrant with the Securities and Exchange Commission on January 22, 2003 (the “2003 Form 8-K”). | |
3.4 | Certificate of Rights and Preferences for Series A-2 Cumulative Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by registrant with the Securities and Exchange Commission on June 28, 2004 (the “2004Form 8-K”). | |
4.1 | Credit Agreement by and among Bank of America, N.A., et al., as Lenders, and Helix Energy Solutions Group, Inc., as Borrower, dated August 16, 2004, incorporated by reference to Exhibit 4.1 to the registrant’s Annual Report on 10-Q for the fiscal quarter ended September 30, 2004, filed by the registrant with the Securities and Exchange Commission on November 5, 2004 (the “2004Form 10-Q”). | |
4.2 | Participation Agreement among ERT, Helix Energy Solutions Group, Inc., Cal Dive/Gunnison Business Trust No. 2001-1 and Bank One, N.A., et. al., dated as of November 8, 2001, incorporated by reference to Exhibit 4.2 to Form 10-K for the fiscal year ended December 31, 2001, filed by the registrant with the Securities and Exchange Commission on March 28, 2002 (the “2001 Form 10-K”). | |
4.3 | Form of Common Stock certificate, incorporated by reference to Exhibit 4.1 to the Form S-1. | |
4.4 | Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of August 16, 2000, incorporated by reference to Exhibit 4.4 to the 2001 Form 10-K. | |
4.5 | Amendment No. 1 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of January 25, 2002, incorporated by reference to Exhibit 4.9 to the 2002 Form 10-K/A. | |
4.6 | Amendment No. 2 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of November 15, 2002, incorporated by reference to Exhibit 4.4 to the 2003 Form S-3. | |
4.7 | First Amended and Restated Agreement dated January 17, 2003, but effective as of December 31, 2002, by and between Helix Energy Solutions Group, Inc. and Fletcher International, Ltd., incorporated by reference to Exhibit 10.1 to the 2003 Form 8-K. | |
4.8 | Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated July 26, 2002, incorporated by reference to Exhibit 4.12 to the 2002 Form 10-K/A. | |
4.9 | First Amendment to Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated January 7, 2003, incorporated by reference to Exhibit 4.13 to the 2002 Form 10-K/A. | |
4.10 | Second Amendment to Amended and Restated Credit Agreement among Cal Dive/Gunnison Business Trust No. 2001-1, Energy Resource Technology, Inc., Helix Energy Solutions Group, Inc., Wilmington Trust Company, a Delaware banking corporation, the Lenders party thereto, and Bank One, NA, as Agent, dated February 14, 2003, incorporated by reference to Exhibit 4.14 to the 2002 Form 10-K/A. | |
4.11 | Lease with Purchase Option Agreement between Banc of America Leasing & Capital, LLC and Canyon Offshore Ltd. dated July 31, 2003 incorporated by reference to Exhibit 10.1 to the Form 10-Q for the fiscal quarter ended September 30, 2003, filed by the registrant with the Securities and Exchange Commission on November 13, 2003. |
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4.12 | Amendment No. 3 Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of July 31, 2003, incorporated by reference to Exhibit 4.12 to Annual Report on Form 10-K for the year ended December 31, 2004, filed by the registrant with the Securities Exchange Commission on March 16, 2005 (the “2004 10-K”). | |
4.13 | Amendment No. 4 to Credit Agreement among Cal Dive I-Title XI, Inc., GOVCO Incorporated, Citibank N.A. and Citibank International LLC dated as of December 15, 2004 , incorporated by reference to Exhibit 4.13 to the 2004 10-K. | |
4.14 | Second Amendment to Credit Agreement dated March 21, 2005, made by and between Company and Bank of America, N.A., et al., incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on March 23, 2005. | |
4.15 | Indenture relating to the 3.25% Convertible Senior Notes due 2025 dated as of March 30, 2005, between Cal Dive International, Inc. and JPMorgan Chase Bank, National Association, as Trustee., incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on April 4, 2005 (the “April 2005 8-K”). | |
4.16 | Form of 3.25% Convertible Senior Note due 2025 (filed as Exhibit A to Exhibit 4.15). | |
4.17 | Registration Rights Agreement dated as of March 30, 2005, between Cal Dive International, Inc. and Banc of America Securities LLC, as representative of the initial purchasers, incorporated by reference to Exhibit 4.3 to the April 2005 8-K. | |
4.18 | Trust Indenture, dated as of August 16, 2000, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on October 6, 2005 (the “October 2005 8-K”). | |
4.19 | Supplement No. 1 to Trust Indenture, dated as of January 25, 2002, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.2 to the October 2005 8-K. | |
4.20 | Supplement No. 2 to Trust Indenture, dated as of November 15, 2002, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.3 to the October 2005 8-K. | |
4.21 | Supplement No. 3 to Trust Indenture, dated as of December 14, 2004, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.4 to the October 2005 8-K. | |
4.22 | Supplement No. 4 to Trust Indenture, dated September 30, 2005, between Cal Dive I-Title XI, Inc. and Wilmington Trust, as Indenture Trustee, incorporated by reference to Exhibit 4.5 to the October 2005 8-K. | |
4.23 | Form of United States Government Guaranteed Ship Financing Bonds, Q4000 Series 4.93% Sinking Fund Bonds Due February 1, 2027 (filed as Exhibit A to Exhibit 4.22). | |
4.24 | Form of Third Amended and Restated Promissory Note to United States of America, incorporated by reference to Exhibit 4.6 to the October 2005 8-K. | |
5.1* | Opinion of Andrew C. Becher, Special Counsel to the registrant, regarding the legality of the common stock to be offered hereby | |
10.1 | 1995 Long Term Incentive Plan, as amended, incorporated by reference to Exhibit 10.3 to the Form S-1. | |
10.2 | Employment Agreement between Owen Kratz and Company dated February 28, 1999, incorporated by reference to Exhibit 10.5 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed by the registrant with the Securities and Exchange Commission on March 31, 1999 (the “1998 Form 10-K”). | |
10.3 | Employment Agreement between Martin R. Ferron and Company dated February 28, 1999, incorporated by reference to Exhibit 10.6 of the 1998 Form 10-K. | |
10.4 | Employment Agreement between A. Wade Pursell and Company dated January 1, 2002, incorporated by reference to Exhibit 10.7 of the 2001 Form 10-K. | |
10.5 | Employment Agreement between James Lewis Connor, III and Company dated May 1, 2002, incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed by the registrant with the Securities and Exchange Commission on March 15, 2004 (the “2003 Form 10-K”). | |
10.6 | First Amendment to Employment Agreement between James Lewis Connor, III and Company dated January 1, 2004, incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed by the registrant with the Securities and Exchange Commission on March 15, 2005 (the “2004 Form 10-K”). | |
10.7 | Cal Dive International, Inc. 2005 Long Term Incentive Plan, including the Form of Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on May 12, 2005. | |
10.8 | Employment Agreement by and between Cal Dive International, Inc. and Bart H. Heijermans, effective as of September 1, 2005, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on September 1, 2005. | |
21.1 | Subsidiaries of registrant – As of December 31, 2005, the registrant had thirteen subsidiaries: Energy Resource Technology, Inc.; Canyon Offshore, Inc.; Cal Dive ROV, Inc.; Cal Dive I-Title XI, Inc.; Cal Dive Offshore, Ltd.; Well Ops (U.K.) Limited; Well Ops Inc.; ERT (U.K.) Limited; Cal Dive HR Services Limited; Cal Dive Trinidad & Tobago Ltd.; Canyon Offshore Ltd.; Canyon Offshore International Corp.; and Well Ops PTE Limited. | |
23.1* | Consent of Ernst & Young LLP. | |
23.2* | Consent of Ernst & Young LLP. |
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23.3* | Consent of Huddleston & Co., Inc. | |
23.4* | Consent of Netherland, Sewell & Associates, Inc. | |
23.5* | Consent of Andrew C. Becher (included in Exhibit 5.1). | |
24.1* | Powers of Attorney (included on the signature pages hereto). |