HLX - Earnings call transcript Q1 2018 | Helix Energy Solutions Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Helix Energy First Quarter 2018 Earnings Conference Call.

During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, April 24th, 2018. I would now like to turn the conference over to Mr. CFO. Staffeldt, Erik sir. ahead, Please go

Erik Staffeldt

Counsel; our Good morning our Participating our night. us had on Commercial related Owen you've Jeff Wagner, opportunity for this slide our and the to and call for thanks Kratz, is conference today review release. for presentation COO; Officer; General joining our Scotty myself. QX Sparks, call today Helix last and everyone Alisa and Johnson, CEO; release released XXXX Hopefully, on an Chief our earnings press

not had by be tab www.helixesg.com. Releases accessed you've on clicking our Relations a If be materials, copy icon. Press accessed at both accessed page and today's webcast of the can The website Investor can the these press slide release through presentation the under be on can

prepared statement Before will Alisa remarks, forward-looking our we information. Johnson begin regarding Alisa? make our a

Alisa Johnson

certain associated call, on in this safe conference the anticipate under our we forward-looking Reform facts, the than the Securities Act statements and expectations. harbor are Litigation this conference All current XXXX. based are of Private During and in made presentation, of statements statements making of forward-looking historical provisions statements or other call projections

release, are along replay financial annual rules, certain reconciliation, our a with of materially measures call, to presentation during provide of materials Our Owen? on of for Also, year with A may projections financial results report on Form may non-GAAP differ statements annual earnings presentation, and two XXXX. this on be and the report due slide our made. non-GAAP ended GAAP XXst, comparable a this In our the XX-K our broadcast website. the actual including press disclosures forward-looking this final those a future and variety of forth of December number available from SEC factors, our certain slides accordance set in to reconciliation our measures.

Owen Kratz

QX level the Good slide with five, is which of morning everyone. summary We're going results. high to start

to comparable results. our were results XXXX quarter XXXX fourth first Our quarter

Our and positively Mexico. by was Revenues XXXX the first XXXX QX U.K. coming normal impacted flat by [Indiscernible] Robotics in revenues, at the execution winter full of increase and in operations in Intervention essentially This our utilization Brazil quarter well slowdown. good from was million. as Brazil slowdown of were well in as An was a Well vessels U.K. Canyon by QX in of a in offset well to quarter offset as our revenue $XXX in primarily Gulf work result decrease to from both due seasonal from the result

$XX Our in gross million XXXX our decreased Robotics by QX QX driven segment. to profit in million XXXX, from $XX primarily

of $X of QX to compared Our law related QX U.S. net million XXXX to tax million non-cash decreased XXXX $XX.X benefit income $XX QX in due the minus to XXXX changes. million a to in in

Our compared $XX in in million $XX of million performance of QX resulted EBITDA QX to $XX in XXXX. million QX and XXXX in XXXX

our down to QX QX, at in Well Intervention in XXXX. was six, utilization slide from slightly XX% Turning XX%

utilized additional to the The IRS Helix performance has The was However, for in of the utilized benefited Helix QX. our Brazil, Siem XX% X system. The QXXXX monthly quarter operations the Helix Gulf for QX. from XX% compared In Mexico, the XX%. improved after quarter. performance quarter, including and was compared Vessel was utilization of utilized commencing utilized X, utilized in QXXXX the In XXK XXX% the QX XX% vessels crews the the The XX% QX. the of in the mid-December. mobilization of was days in days startup we Siem for of QX Siem continued to XX to X improve. was

at Our and Well Seawell March working activated the were Enhancer the and The in QX. in quarter. North were vessels Sea end utilized XX% of

slowdown seasonal and the to by U.K. impacted were Production a of ROV. results chartered The utilization be winter facilities slowdown during months quarter. performer, entire in the our the markets. steady vessels reduced the in at rate segment full the continued winter Robotics Our operating

slide cash and million On cash levels perspective, QX payments seven, sheet end $XX our increased from connection million million financing. We and in end to expenditures a the $XXX quarter in million principal $XX capital of our at other from offset operations, XXXX. generated at balance $XXX our from payments of of the million by with $XX

$XX to existing down million cash the of remaining $XXX pay million repurchase notes required of to the approximately convertible used of convertible During loan. XXXX senior our quarter, term $XX the of refinance issued million We we senior notes.

from debt position turn year net Scotty end. of discussion the Our call results. at in-depth an million to $XXX decreased over now operating million $XXX to for -- our $XXX I'll

Scotty Sparks

Thanks Owen.

uptime Moving a to in on with QX utilization to us a slide seasonal still We year, had good good the performance. many we're [Indiscernible]. strong nine. to start the parts company of considering very the in

two the equaling of on contract quarter. of the the which Revenue We fourth performing steady was the quarter both $XXX vessels full at Brazil, also million, first having quarter are in experienced well. in first

a was strong XXXX in moved secured. end XXXX. March XXXX. contract margin was XXXX The to of in fleet we quarter, Abandonment of to good QXXXX client chart BP. working higher QX, both undertaken XXXX, is was scheduling, the into mentioned, vessel in numerous in to schedule the recent of In QXXXX Deep on be Cygnus the The into units to high to was great resulting Gross the stronger in Gulf Temporary on performance It's slightly the XXX% QX. as contracts previous million, expected, it it strong being utilized included a Slide units of a QX Robotics XXXX. no expected, utilization Both inspection QX QX. to in times. have much the commenced The Gulf than contracted vessel a significant a Intervention the to inspection business, vessel had X% units QX. key first owner. returned wells business production in in on from Mostly Well work has Free Helix the much Mexico. the of on trenching the the wells operations. Brazil. the quarter of an low our Both XX% QX. the remained quarter having profit enhancement and commenced and in had planned million At Well SHX activities. safety backlog improvement for for originally the However, vessels quarter, work both the then When better relating The overview as Siem commenced vessels under for planned continues in Brazil, $XX was being we and due the vessel first backlog commenced to in strong with Due earlier slowly ahead work increase to provides The a was in Gulf QXXXX and with of All North XXXX. the four in Mexico previously projects and to results the Mexico. and performance. as side be In in backlog This back the the utilization achieving to until period $XX staff both entered visibility long-term the the vessels intervention however, down working the primarily profit same SHX we cost in mid-period Petrobras. planned of across underwater and Sea creating with time the well QXXXX entered year of locations for QXXXX in and inspection a program. In where still contracted utilization in XX the enhancement two quarter much a stronger charter than of it than has produced commercial completed downtime. production business comparison

on X onto high IRS levels. completed first subsea our first growing QXXXX intervention IRS the work facility unique with kind our subsea to Regarding the high is the on at the should system X its offering the rental idle addressing IRS of the mid-January, In pressure and IRS X units the model remain West of into late standalone a its renter the This oil. Helix quarter. mobilized pressure in contract is systems, in requirements contracted XXK Africa our basis intervention Houston. continues

We QXXXX this well clients. and services way. all Helix undertaken the the continue the on ROVs works vessel seems with be QXXXX consolidated providing our and subsea alliance have to package contracts onto package the the the on contracted to providing been working This mechanism to and [Indiscernible] as systems one

Moving to slide XX.

working in entirely. the contracted backlog one year both Enhancer of after both enhancement with in our production XX% in worked early in of our vessels The quarter, commenced quarter the As XX% vessels Sea in March. Approximately expected, Dundee will to work year. slow a then Intervention warm require The in vessels Seawell that integrated commenced contracted commencing clients period. dive-in the a be being warm stacked this in business had in the we've U.K. services the for log quarter had strong March, project dive-in stacked winter March unique projects the projects Well With with [low-cost the warm] in a for three work XX% for Well early working for Denmark. North on

in have both to had slide working was to the downtime X is vessels some a completed Siem contracted seven currently, X the the is wells well perform and very we utilized little The with had well also to downtime due fully XX% our Moving on initial of well. quarter date vessel XX. had performing some performed wells quarter. The in vessel quarter and but In continues for The and to well best strong has and mineralization very integrating operational pleased to very the performing very Siem five quarter. Helix the very in Petrobras. quarter. Helix and crews, the Brazil, We

Petrobras. opportunities. We IRS at now for our XX in rental X standalone approximately have Brazil for wells has been facility completed installed

on for review. slide the Robotics Moving XX to

start the conditions. due harsh we a had expected, slow the As with Robotics to year seasonal to

completed utilization I utilization, achieved In and still Grand increased has ROV vessels XXXX, days trenching projects projects. base returning after in project. in days the slide after shorter we days the wants investment-based from Gulf utilization, North for projects we've Deep Grand III XX charter the vessels undertaking its numerous the year three completed and significantly more short-duration Robotics to Sea our on days Canyon trencher improved XX% reduced backlog XXXX comparison trenching cost to worked XX a utilization, II The The Grand XX. IRM works fleet. will for the over detailing we good long-term of have charter. Canyon walk-to-project. contract to utilization However, across outlook leave and and Over scope. reference. of the performing slide trenching a Canyon XX-day with XX Mexico XX in IRM on the working Cygnus your

XXXX earlier, well-executed projects start to far. better outlook. contracted to had all with sheet more mentioned Erik safety XXXX now and is throughout, a the to discussion year the far be the balance and compared on year with businesses. As call XXXX shaping over performance strong good work turn QX, We up across thus I'll for to our

Erik Staffeldt

Thanks Scotty.

It and our XX. slide maturity their to at Moving XXst. profile instruments March debt outlines

reduction payments. Our total from scheduled a $XXX a balance, principal XXst our our at primarily of XXXX reflecting year funded end was $X debt million March million,

require It the million $XX effectively net were a XXXX costs. transaction maturities to balance and During with we coupon. and senior to of liquidity have balance. convertible refinanced in has the cash approximately issued in was [Indiscernible] loan loan flow that first XXXX repurchased term million pushing This This refinance with allowed quarter, million used pay repurchase. down million and we notes us strengthen of due cash The of of and term remaining our due our convertible low into position XXXX. XXXX, maintain $XX to the to will done senior $XX was partially convertible required notes interest them our cash $XXX to the cash debt we notes

sheet net balance including debt it to an key levels metrics, XX, as year-end. slide gross update Moving of provides and on

mentioned in million million in $XXX refinancing. debt to net debt net decreased $XXX QX been QX. previously had directly The Our in the attributable decrease from to

outflows of Our down $XX by million, increased at to end pay million, the $XX CapEx reflecting and cash operating of cash debt. million of slightly $XXX quarter flow offset $XX position of million improved

net to Our capitalization book XX%. debt was

on outlook slide to provides over Moving XX, an it XXXX.

We XXXX assumptions of in range are million $XXX EBITDA This million. for $XXX maintaining our to in includes forecast range estimates. key the

in We are benefit assuming SHX the year and full from SHX Brazil.

XXXX expect the Seawell XXXX the March, Sea to North maintain of in With activity Enhancer the high campaigns quarter. and into on of Well fourth a Well start we market Intervention level

XXXX, and are good there scheduled QX We the utilization to gaps for to are have although fill. expect remainder the of they

our going market to to weak, results, from an costs these the charter Although QX forward increase provided. assumptions variation the expect continues and Robotics key EBITDA work. the reflected trenching from in in we be as outside reduced Any range fall the benefit could cause significant

Moving to slide XX.

backlog remains $XXX estimated million scheduled be which about $X.X currently XXXX. backlog, completed XXXX and of Our to at billion in is

the on Our opportunities servicing to into Brazil, driven Well weighted will have spot year Mexico, contract, we QXXXX a and months. expected Well thereafter. in additional opportunities. market, The its In shipyard day The with backlog the some level experienced from Petrobras the of XXX-day inspection. rental utilization full BP. producer has into rental vessel with on during we weakness with for I to expected a contract. in a QX program heavily duration SHX. into duration QXXXX is The activity is benefit of BP our is the identified expect contract downtime QX seasonal IRS and QX SHX market The service contracts, vessel worked the both our rate currently has it QX of the approximately winter vessels Intervention into into opportunities rate the required Gulf QXXXX SHX starting contract and currently with Sea XX March Intervention as expect XXth vessel QX. into expected scheduled In of QX. XXK assuming North downtime, we're near-term two to for performed be with by the underwater In program. maintenance regulatory its Helix days unit went with unit market, XXK high The mid-January day

off of we start slow of stem forecasted We're expecting return trenching with Grand Canyon in during months, XX, QX, a the the this the hedge Cygnus rolling Deep the segment capital costs slide market. in payment expected for remainder the XXXX. after to stronger forecasted in wind XXXX, improvements expecting approximately the on $XXX QX. continuing due is the at performance year improvement million for most slowdown are Moving construction to for winter its QX, the Robotics the to shipyard The chartered of CapEx lower farm from in including

skip to QXXXX time, scheduled XXXX loan, with turn debt remaining term and call Our leave and slide XX for for reference. million for payments to approximate $XX MARAD I'll debt, payment on I'll I'll closing comments. back your loan. Owen our it this At the

Owen Kratz

year-over-year XXXX Thanks expectations. our as quarter EBITDA up Erik. XX% well increased has XXXX XX% Well, first Helix relative to strong is compared own year-over-year. as started and Revenues contribution to with a

on X the was market on On Brazil. was expect I our Gulf the year the were ago. of holding, mention this, strong XXXX being utilization full rate operating had first utilization in We might utilization appears their Helix Siem North improved be be have in Helix it spite that expected continues weigh while XXXX are to North vessels of to in to starting a Siem X top pressure challenging vessels fleet of above improvement The in continued first March. to quarter are better rates. Gulf Mexico intervention the conditions. expectations. of the strong quarter over both and primarily The Sea pricing than with both Mexico by vessel driven season in hire Sea Pricing and

marginally on as the weak had expected, cost believe in the we're to reductions start which making showing end the result downtime of year to a Cygnus efficiencies, improving due as reducing year-over-year I and but Deep a of results. the progress addition, events In benefited Canyon is meaningful charter.

basis Canyon improvement expect for primarily of market. the We of year-over-year by to the remainder driven strong a greater show the marked trenching year utilization, on

Scotty in pointed We have year this XXXX better as backlogs as visibility we on did than -- in we out. Canyon

We of inform this better stand cash our everyone have flow references where to in we weak added to market. in presentation some

interest $XX $XXX million and per next We of over years year. three of the million have roughly payments roughly forecasted CapEx

We objectives. expect we flow sufficient flow strong current to Even operating cash we continue. levels, at have our cash and to cash feel meet

the matter in million the $XXX we elected convertible to repurchase we mid-March, was of pay twofold. new a XXXX required senior for our issuing were the decision off notes of issue some with XXXX notes a rationale to prudence, of by mentioned. As our proceeds convertible The note. as The refinance to used debt notes

we to it cost from low on our pressure portion cash and First, felt our our unnecessary cash of keep the prudent to And right. date wished of our -- avoid maturity we move to to second, flow. interest restructure debt

is market continues and recovery optionality that debt our should flow with our vessel. our shipyard persist. addition, to except so in owner have punch match our the is our to be to QXXXX current us opportunity the remaining QX risk integration and ready expected level fleet. to QXXXX behind The conditions completing Part the an uncertain cash items, We felt upgrades XXXX. cash provided with some aggressively some currently market to around of our we felt there is amount us. to In list We're convertible furnished work the our current The expect flows. continue -- construction work intent both complete weak, stems The strong liquidity reduce for the convertible equipment vessel of do. to that it of divestments this and but players work a signs of maturity Petrobras market existing Sea that expected level timing capability debt added the to new intent well showing With growth offering settle Africa has EBITDA of timing also North our we Brazil Sea assets a notes, be pre-payable grow the the from even could expect other the desired of M&A for to for if and work stated continued region. in North a yet an activity. to that's as as result as as can't this currently of new that is create future. opportunity in West the brings well is cash to

in region a and addition regions speed. We vessel uniquely vessel twin our being is in region designed from transit each designed as that This that well. as was can interest a campaign The to be expect to means opportunity, semi an with the successfully. QXXXX higher multiple

have to shipyard with we XXXX, commitments Although cash relatively of in we're the a position market opportunities XXXX, cost the option working reduced XXXX. hard flow free expect net remaining greatly in over vessel on low with end dealt bring to are to [Indiscernible] we XXXX Once our capital defer the with strong and earlier and the until be debt debt. of to a any positive identifying

Now service with market margins as prefer we start present the we This ourselves intervention as improve formats that additional and creations. assets. to in preeminent at get realize capability, well contracting throwing various offering around these utilization and we've best-in-class our a value enabling to Helix Even ahead we'll ways expected as of our of fleet has non-rig promising capable for to exploring not the us. our ways uncertainties a clients expand to this is robotic had be is greater to though XXXX,

this we're trending at not range guidance be first towards And upper back turn our say half that quarter, with over we'll reason, the that I'll Eric. it For of to other the time with this provided. to that, revising than

Erik Staffeldt

we'll time, questions. Owen. at Thanks this take Operator,

Operator

line from Thank Instructions] Marshall ahead. go question Our Adkins. you, first comes Please sir. [Operator the of

Marshall Adkins

your past I I guys. very helpful, we very the that. is the and helpful know much do in community is morning mentioned and guidance this don't presentation analyst that the if appreciate Good in

Owen Kratz

Thank you, Marshall.

Marshall Adkins

us a Owen, prices than We're speak, I changed Has an the bidding question guess, we seeing in have more the your optimistic in frame month. at Brent you're into the for tone upward your the $XX -- seeing last Or we're ever since the that so update outlook way. activity? just at on that at now me QX prices positive resulting this what move let heard as I've front seems oil from, give to last least feeding the on tone XXXX? looking before, the Is call? on

Owen Kratz

in parts here. moving few the a Marshall, Okay, answer

up. of I budgeting though as The think price yet. have -- of we because contract that very while. the The wellheads, rules, the and oil the on movement to of warrant think a we're tendering Africa across price, for is West of the the It countries. not starting the now West has intervention it's budget. high know to each XXXX follow in country market seeing been market commodity is that I too much impact We're but the an the quite upward there has has watching movement tends What was that pile schedules its don't impacted difficult seeing late. not region tendering producer a count maturity don't each market activity. Africa there cannot own single I a had

real hobble to Africa present in some success warrants what difficult it's full-time with. in that enough goal. believe and That's year that of opportunity side to a the schedule So, contracts, a basically, do asset wrestling cobble Africa. a we negotiating We're we're our West work on probably an that West seeing we've now now warrants sustainable seen it's vessel on with that's full first the utilization together that the that a schedule there a together

and the of -- work amount biggest the up. to basement needs you probably a-- of piling the do changes that Scotty, that's be maturity have So, that's

Scotty Sparks

of because Yes, what swing the [Indiscernible] is to based to that of of say wells more more heavy of with the to enhancement can we're production oil, And more to of and and activities intervention P&A maintenance I compared suited that rise leads inside QXXXX. increase work. we the think which price

QX that for. they leads to production intervention operators money on maintenance in seen which put built the enhancement. We've work off base, long for changed more time we've heavy is So, and spend the

Marshall Adkins

Perfect.

on fill seems me my your is next in to some we the you QX, schedule being about think were you to mentioned, those in should holes how us it August November. to there's ability question, holes leads like that sense which schedule like there? the or Give your conservative the just of so And --

Scotty Sparks

off-contract the not filled. with is BP now Right

reduce some are visibility and out We in clients will good with be to we're quite BP in portion rates, It of the be in and rates, hole. negotiations confident the that portion a will undertaken. we're be the hole close it more of but discussions market that will

Marshall Adkins

me, Okay. Last one from Scotty.

about that kind on the talked revisit You what's QXXXX happening? what of and there you can back Give is more so the you're went Schlumberger you come that? alliance we and us Could understand exactly quickly. through really detail and doing

Scotty Sparks

Okay.

equipment forward coming Schlumberger plan crews advantage plan the vessel with vessel. for firstly the installed multi the have that crews, And we One, that headcount us cost Schlumberger can therefore, the an is the reasons. and on gives bring base. two down So, we'll the on and

XX-day campaign, times, operator-to-operator we from it say equipment. these six probably that for allows jump well time when so project demobilizing mobilization less XX it of just days about and you to and service mobilizing Secondly, different is each in used

and us, time forward one services clients an likewise overall price behind price clients subcontract the just issues. a program. to one then, will things Schlumberger have than put It And much take advantage Schlumberger forward. and it And they days' the that having procurement a to So, hopefully. take for a forward the client. subcontractor, Then us invoice, larger with less the as on and can you've also salesforce up it contract the Schlumberger allows us efficiencies and of as adds that where we to four put and deal lead one less allows and well put against

Marshall Adkins

Okay, great. Thank you all.

Scotty Sparks

you. Thank

Operator

line from MacPherson. Ian go of ahead. Please Our comes next question the

Ian MacPherson

Thanks. I Good the we you really didn't utilization. have Scotty, -- up were look few Sea Owen was at the back upturn, quarter. tiding North or years last ago that you debts on morning. the in a Congratulations seasonal guess, when

we any think seems for XXXX-XXXX whey North -- full happen higher as year haven't XXXX-XXXX that now North that Sea to that's of you the just of sort You that could that you progress it's there to winter yet. is as But those that think Sea prices and oil reason back be not that season XX% XX% coming continues possible season, assets out to do described look utilization would could with winter do be sort it to if revisited? -- dynamic

Scotty Sparks

not I it at levels yet. has potential. the think those We're

have strong Sea. Right virtually have visibility into -- We and QX both vessels see we into North very for the we a backlog now, into contracted vessels both December. contracted taken

If you at and QX this in year find were to ago, work having we looking take a QX.

up confident and to of Now down we're quite I comes contracted a we're filling feel of the good portion this that Again, QX. operators.

work work. the oil of With is on the In our more and required. of Sea, maintenance spending price about basin, there work. money increase, maintenance maintenance more North [Indiscernible] they're split work is XX% enhancement production

they catch-up don't use the months, Owen? we're where So, add I but to there yet, not if not winter starting know you want I have will to happen think to fully.

Ian MacPherson

Okay.

Owen Kratz

gauge their It's And because their historically. see that's partner or big how they this they the in fruition having longer all of to both the To that, for them on or approvals comes they not to work within taking said just year, I a work issues and that season is whether as it have the have be just some to that, approvals. time XXXX. provide if the have about work or dynamic the in probably one not long more seeing the going hard-pressed goes. off producers But that the in would negotiations held extent any we budget contract, in fit would just partner know -- a our they're year we the spot if we're regions. into are, expand get sign a that's Yes, reason now with leading having positive is projects have to we're that driver. getting here winter on pickup opportunity they or feelings work contracting to the add the is I on give a some where either we months you from or QXXXX for recurring to the is of don't is than there into for to that on whether now, optionality for QXXXX, That's market which

Ian MacPherson

you Thank for Good. both answer. that

for follow-up is for Siem three a X. two me was on expected this of thinking the Just weeks, the I that quarter appropriate? to Helix from maintenance the range downtime

Scotty Sparks

think regulatory up, to locations. transit of total we XX Yes, then work includes Petrobras there we Petrobras and sites, is the days in I -- out contract that plan out yard. the to back in the to we put for yard be The that

Ian MacPherson

got it. Okay,

Owen Kratz

periods Yes, out downtime taking also well maintenance I'd that impacted but and is in downtime reducing Scotty, [Indiscernible] to Siem Brazil during point the if should this eliminated of going just like outstanding by -- is are I'm Petrobras is to worth which on [Indiscernible] opportunity a some drives. wrong, each and is that revenue. X, be reduce [Indiscernible] correct tendencies rates pier We're what's the the resolve Helix the day about $X,XXX reducing, four the will

uptick a pretty positive us. for So, it's

Ian MacPherson

Owen. Good color. Thanks

Operator

question of comes line next Joe from Our Please ahead. Gibney. the go

Joe Gibney

morning. Good Yes, thanks.

Just on QXXXX. the a question

vessel? much in some now of how backlog. the XQ know curious, much Just indicated with actually spoken XQ, in booked how XQ is the is you'd secured is now third but now and for is indications for quarter I

Scotty Sparks

Yes, have we've good we when and with secured our others, got in discussions with all that year work we're year clients into into premium with visibility work that's clients we QX. that of QX in out one and

Joe Gibney

there Helix the utilization. a The question X, on Okay. Siem just

you better operating these All some both expectation. you the going sounds are like every you of crew quarter, indicated got above issues but vessels in month. integration had of It

with in see exit of that better? you trying X this gauge to run your initial its Siem sort here sort going what utilization you in vessel Helix expect the So, quarter kind utilization for mid-XX% this expectations would of still of asset QX? at you a or -- on getting of rate Are commence is did rate Just quarter? for to exit sort

Owen Kratz

we've than in quarter, say the the The think just you quarter we run I'm done run you'll exceptionally but run use see that's -- of quite that quarter-over-quarter, good would stronger to exceedingly end a being was Brazil. the probably both the cautious rate up we're exited rate improvement for could level. mean QX, on in I probably of But not I vessels. I strong.

Joe Gibney

And you. clarification. Scotty Got one Just

you referenced into be the think they some the accurate? you North secure vessels, able now utilization I now? these of Sea into that could to worked, but out both did December prospects say indicate prospects it think go vessels but XX% I you year, fourth might XQ Is December. quarter, the there the last into it, in to that for XX%

Scotty Sparks

good we or feel discussions, they're Yes, final I that time of just not locking happen. it's likely. should think a that's one as that contracted, and in see two matter were Again, contracts that

Joe Gibney

I Thank it. you. Okay. appreciate

Operator

[Indiscernible]. from ahead. Please line Our next go of question James comes the

Unidentified Analyst

Good Robbie This is Jim. actually morning guys. for on

Just one quick question.

what and Schlumberger that different be could you talk I performance-based Could guys ways the looking roadblocks achieving at you structures. other structured for know contracting years and a contracting a bit in about is You about the your sort talked to contracts pushing actuality? what little partner, are being of different now. few are

Scotty Sparks

mobilization the us the because sort base, equipment time, can sum increases to Yes, client, ourselves cost we be headcounts lead one contracts, know know let Schlumberger can of allows the or of that the can lump as per contract the reducing it installed. structured to be we vessel, say mobilization me site, less the procurement take that the contracts portions on issues allows

it working lead allows crews more further used So, to should to the together and efficiencies. get to therefore

Owen Kratz

sitting leading we called has out, XXXXs still and contracting. in forms on I'll been used of successfully. add the several a we've and matter pushing it's the right a different the offered. industry past that And with applying we've Yes, just performance determining and drivers contracting that there number is of the Schlumberger of on performance in very are format. There formats of the of we are creativity but down the types were formats when their the contracting, what clients were then the each

our to plan into lot think of getting a as even means in that one we optionality market. for on a I what there's our we're do, for of being the margins and of -- pretty to us a about excited without expand So, challenging able is as lot details

Unidentified Analyst

rate of from What then, maintenance helpful. the beyond last CapEx run that's of one me. sort Okay, XXXX? level And

Erik Staffeldt

through running of by program maintenance of will From mostly delivery our million $XX running that our capital we to $XX be Starting standpoint, million XXXX, XXXX, capital the we see timing XXXX have between in and our beyond driven the with QX. the docks. dry the

Unidentified Analyst

Okay. very much. Thank you

Operator

next question Our go ahead. comes from of the Please line Dezellem. Bill

William Dezellem

where where year, then mindset It had guess, beginning at to we make versus please? though today I'd seems picked like your on was the you're has of but you when your seeing talk you. the up, what today Thank understand the the as does please QX's I -- QX clarification call? Would thoughts sure you about that some you're versus utilization

Scotty Sparks

expecting to start holes vessel. got at the we contracted do year, work of work and schedule from a the more QX. were QX expect gone to to well. be gap very we QX, inspection has apart some on XX that you few We've the have XX-day we for a Yes, fully into

that We have QX The lot quite and a QX. into visibility. with contracts clients good we

So, I'd always if clients on now. utilization We confident. looking QXXXX. the better the so I'm We've know right high had same like, not quite

William Dezellem

Okay.

than of So, we not utilized more have though the impression what the a ago, for contracted in say it looking was that year you of were at correct? you what months that is couple under now were terms

Owen Kratz

that's half very and looking late we clients Certainly, in the utilization at to at the the the were were if contract; fill any, the the of of beginning for because starting we of of second nature year, of -- propensity the little, year now.

our visibility go. as So, improving we is

William Dezellem

where in helpful. guidance vessels? the specifically increase is is the and right. And or that your coming All that other you. revenue from, is That's essentially it QX Thank

Scotty Sparks

a and our quarter. with uptick higher FX in North of a marginal the in the true-up first think cost bit vessels came in I revenue of No, also Sea our is items our true-up rates plus little that

So, marginal revenue those our of two the increase. drivers are

Owen Kratz

that, in than a from much what add our think expected of on standpoint. stronger I performing guidance I would revenue also Brazil top we was

William Dezellem

Great. Thank you all.

Operator

Our next question comes from the line of Vaibhav Vaishnav. Please go ahead.

Vaibhav Vaishnav

my Thank I Intervention. least some look if increases on you first way questions. see COGS, first cost question in What the at I at XXXX? taking just else like had part something wondering $XXX to was million. in million and understand increased it quarters but I a for $XX X like it cost? is is last I that three for Siem quarter The Well guess one-time was if been there of Helix it,

Scotty Sparks

cost had the the days. roughly for vessel the in Siem the only the driver Helix quarter, is fourth XX big No, our addition we increases there six vessel, that X. of In of

for now and a significant increase. driver full that quarter cost had so it there we So, in a was our of

as revenue Our we cost vessels we operating structure obviously now increase but increased in Intervention, has that that, well. expect have Well base six to

Owen Kratz

I the mean the December, deferred applied also conclusion January, to of of and that part charge. a to mode than did full was during X half mode during rather Helix of And the first go Siem all cost the P&L. being not and cost deferred P&L hit the the of month

Vaibhav Vaishnav

quarter. quarter XXXX million about increase Okay, that's it It million there from first visibility quarter? the that call helpful. increased second couple it million typically, of to to be over this think seems is fair end towards has maybe EBIT Would second $XX first for the Intervention If years, I to the $XX $XX million last think higher of Well quarter higher year. to $XX

Erik Staffeldt

second the standpoint. obviously, to contributor uptick in Obviously, not that a quarter, our our first change North quarter, in March. Their they're Intervention big Well is, moving started vessels. the season of Yes, Sea from

a contribution. So, we of quarter full expect

second have So, the Well you North activation is Intervention historically the significant that's the of that seen the in vessels. Sea quarters uptick

Owen Kratz

increase think I show to a has to Robotics significant also QX. over forecasted have QX

Vaibhav Vaishnav

going my question. next was to Actually, that be

This visibility looking -- should have at be in more you so million of versus we million to XQ? cost, thinking couple improvement million last has $X $XX XQ million $XX like sequentially. more year, $X just and EBIT So, to years, EBIT again, maybe increased you Robotics, have

Erik Staffeldt

mean, the And I work Canyon And vessels down where good of vessels. a first has be cost from base trenching comes Yes, then back from four should secured. returning the it to been three that. all, portion goes to of

vessels year, of our of trenching the work most vessel all of another the way end the is the year. to trenching One up from has

because but of work over an in to coming base secured difference cost also years. has see and trenching So, the is The an work, down work and trenching been big increasing increase the vessels three going previous cost trenching contracted. a and in increase you're revenues secured

Canyon a times only year year. think back, we hundred days this at few I this looking for time had the for year, last that three above

Vaibhav Vaishnav

Siem Helix, maybe the Siem question so the question -- on I last have if you Helix call, you earlier. The X And Okay. and answered have. -- still we of Apologies, Helix dropped that was Siem they additions -- I need need some dated here at end can do see are at X full more we rates from day March; on? we do improvements or

Owen Kratz

rate. [Indiscernible], quarter-over-quarter. revenue This four $X,XXX of mentioned or three I we in very of well sort eliminate an the coming which day per strong. a first the to very up, by run of was -- think period was going Overall, [Indiscernible]. this the run ties I yard at quarter before, end into increase see you'll as will around is rate the increase quarter The fourth -- revenue

see. run to least an quarter should So, have end it's of -- improvement the not see or sustainable at an rate, at you the we'll Whether improvement quarter-over-quarter.

Erik Staffeldt

than also see got better from vessel. Helix We on crews a in state X, we running bed well should that as Helix Siem that steady on and Siem system X very better vessel. the performance is

same We Siem expect from X. the Helix

come go startup on expect we vessels. as the for cost to and the operating vessels, So, we original see than costs; both forward, one, we down downtimes less should the slightly two, the

Owen Kratz

performance. had mentioning do little vessel it was sourcing out we're on point not the related very a Siem replacement vessel downtime, we with but in in And damaged. the the to down for really that finding that to might the we X Helix issues downtime went due that I had to [Indiscernible],

Vaibhav Vaishnav

very taking good for That's question quarter. Thank helpful. right. and you All

Operator

[Operator Instructions] go ahead. Smith. David Please line of We the have a from question

Unidentified Analyst

Wanted Hi. quarter. you. circle to Well Congrats pricing to on comments. Intervention your Thank back the

pricing Sea Gulf pressure. I think I Mexico is heard and holding North remains under of

spot Mexico Sea of last want comparable remains is make you were it get right, pricing last softer pricing fair And say year looks sure, or Gulf implying that XXXX to Just pressure is to still I year? XXXX? in this to under than like North

Scotty Sparks

work rates slightly work. is contracted dive-in revenue we're to net that coming small for the uniqueness increase the up it's Again, rates dive-in so above are already the the lot on a Okay, of twofold. has vessels. of from having the and assets dive-in seeing on Sea, associated the with trickle of of utilization because of XXXX. North dive-in is the XX% the plus, a one down

in market the We are pressure unit comes out Gulf right really is only spot as the seeing rig of working the It's activities on still QXXXX close The that Mexico. pressure. year. the in we

fight at that can the procurement saying Again, we we're clients seeing operators continuously teams utilization; rigs. we've we work expect from with. the they against do So, worked

Owen Kratz

a I'd vessel important I improved, it's up roll really XXXX, that Yes, but been pressure. think slightly market rates Relative under that has of seeing you to note are only legacy spot the the we're say seeing to rates. QXXXX that said we just are same, not the if rate

on greater in is XXXX little pressure the the say I'd general, year-over-year, than rates, a So, our QXXXX. for

Erik Staffeldt

That's a good point.

Unidentified Analyst

been color. excess of capacity. the Appreciate it. for clear rig Mexico spot overhang about thinking pricing the QX, Gulf good has the And That's just

remember QXXXX? QXXXX XX% kind Well more any Intervention describe Owen efficiently if ask sure that said And the QXXXX you've think to you I comments advantages? quantify XX% I or to if work. rig. the any versus also there And qualify wanted the expect as was but right, those a just of wanted I make to performing on to versus were advantages that so,

Owen Kratz

with of benefit less likely familiar Yes, of that did to a study intervention QXXXX kind a the anywhere actual number lot efficiency what on. are of XX actually Statoil perception; on clients duration are that say But the But that it's work just I gain. like is efficiency the we're the needs and Other clients give lot believe generates of the depends I'd between work percent is not for there. XX%. their as us rigs. a that us shows from prefer vessel it the of somewhere that and factor of

this to price a out the Although they versus those kind seeing we of of ability sometimes incorporated amazed we're XXXX, vessel gain. in been Relative got definitely considering in things learning QX, well ones a for to once some twice, and QX But need efficiency came done of try the then or ahead QXXXX do just that them any right there it and is into and before. it, has taken been never how QX. we've I'm the curve

instance, retrieve days we to the to on doing two instance, depending means the versus we trolley on the we the QX, the having or to risers QX have are setting when which the wrong save ability side, the on the for For riser off outs, change three downhole the not on the device, do we devices QX. depth or the water

big a is gain there So, efficiency there.

Beyond interchanged writing. QX no that, there's provides very quickly. also tension so the control be It to has well devices walk-to-work, a man unique the that allows frame

more QX, the There's have Scotty, you So, but great versus other main QX do of benefit any? just a safety are there concerns ones. is those two the improvements. differences,

Scotty Sparks

will transit at enhancements speed will manner be plan QX. unit equipment for the for those permanently go We QXXXX well in installed QXXXX have quicker QX as available The is to again, same than we'll the on much contract is and Schlumberger, instance. so QXXXX

Unidentified Analyst

very much. Great. you Thank

Scotty Sparks

Thank you.

Operator

There are at questions no further this time.

Erik Staffeldt

Okay.

you. in your We July. So, for much us participation. our thank look much We you quarter to call today. interest forward very and joining second appreciate XXXX very on you having Thank

Operator

and concludes lines. ask and gentlemen, disconnect participation We thank Ladies to you today's your your for that please you call.

Helix Energy Solutions (HLX) 24 Apr 182018 Q1 Earnings call transcript