HLX - Earnings call transcript Q3 2020 | Helix Energy Solutions Group, Inc.

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Operator

Greetings, and welcome to the Third Quarter 2020 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded, Thursday August 22nd -- sorry, Thursday October 22, 2020. And I'd now like to turn it over to Mr. Erik Staffeldt, CFO. Please go ahead, sir.

Erik Staffeldt

thanks third us quarter and conference on everyone, our call, XXXX morning, for today joining our Good earnings release. call Sparks, Neikirk, this our myself. on for are today Participating Owen CEO; Scotty General our our Ken COO; Counsel and Helix Kratz, opportunity had our review slide an the press night. released last Hopefully, and related to you've release presentation

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

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

Ken Neikirk

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

actual our available measures. www.helixesg.com. of For in report with comparable earnings financial from slide this this annual Investor final the due Owen? are recently and SEC. in under provides made. our and annual GAAP results most number certain reconciliations this the at projections XX-K set measures Form of certain with a call, the of replay our report to presentation and filings In financial forward-looking variety to statements rules, our the Our of differ release, including be section SEC in non-GAAP accordance our reconciliations Slide of may along broadcast filed website press non-GAAP a presentation, These forth our X, during those other may on and factors, materially the future Also disclosures with

Owen Kratz

of our We in This performance, staying challenging outlook everyone the environment, our review are morning, and dynamics well we their Good current families morning, this QX market our the and provide out safe. operations view doing for there hope quarter. will everyone. and fourth our

slides of through provide presentation the summary X to high level a results. Moving X our

quarter this for operators represents third a but the taking complete projects, is typically The peak operations activity year. summer not our weather advantage key normal with the to of period

continue by market, resulting from the impacted to operations Our be OFS largely depressed COVID-XX.

controls. expanded We address reducing We is reported first incremental site the environment. during renewables implemented are the $XXX this EBITDA This of for logistics cost and the required with these strict continue in Robotics, additional the will significantly and QXXXX We've team behind clearance cost safety thereafter, in to of and our $XX perhaps and warm-stacked head-on. operational our incurring we market In protocols costs. QX have benefiting us are to issues longer from but and in the and income recovery the continues million $XX pandemic challenges the net difficult Revenues until controls offering million Seawell were our operate and project. their QX, million. period

Our $XX million quarter. previous from profit the gross $XX to million increased

the end net with in of perspective, $XXX of $XXX generated to compared EBITDA was We at and through XXXX X. Slide quarters first On a the million the in From to of three balance same in of QX. XXXX. million to revenues million through our compared XXXX. results, quarter For $XXX income cash the $XXX million of in million sheet period our the income of to same million period revenues our $XX million year-to-date the $XX $XXX $XXX were balance compared net million

operating $X generated cash CapEx. $XX $XX flow and million During restricted spent of was cash We the quarter, on million million of released.

XXXX debt. of XXXX our of to notes. of continue XXXX This long-term liquidity to million During provides of goals a us refinance refinancing million notes senior and convertible reducing $XXX quarter, million X.XX% our us allowing the we $XX runway, due $XX longer issued while notes

end Our operating Scotty the discussion the was an net now of turn debt call for the results. at quarter in-depth I'll of our $XX over to million.

Scotty Sparks

good and Owen, morning, Thanks, everyone.

Slide Moving on XX. to

operate the environment to teams COVID-XX continued in globally hire We different four partners, a respond and countries. our on vessels to we a offshore continued presented us quarter, had fantastic doing to onshore, and challenging with job. pandemic, and the by working XX both and in well, In third

vessels measures control our have designed to We enhanced operating. proactive our keep

testing exposure over since our tested employees joining and have the our were very personnel X,XXX vessels to on of adopted. prior experienced third-party little We protocols vessels have and

$XX safety globally. and of to including and appropriate personnel employees, Over spending. teams, the the all distancing reasonably during and wear reduced in Africa, Sea vessel increased of revenues levels protect million take we've exception. to was two good achieved supplies achieved effects quarter operational and masks of this utilization and revenue PPE surplus continue period the gross of no vessels utilization. steps Considering continued to holding our chartered enhance warm-stacked margin produced social cost million for and and performing globally second SG&A to operating reduced profits warm-stacking continue the third offices fleet North XX% Slide and The virus on third Even In be mandating in fleets utilization $XX relation COVID-XX and of our vessels Robotics million whilst targeted best environment, regular vessels, results to West measures. We've year the strong $XXX that of the in with continues XX% quarter. the third-parties, We uptime million profits remained abundant offshore clients Intervention This Well to statistics the in also deep facilities. and of our of compared cleaning to we we XX%, attained with producing those and two considerably resulting profit of the XX. quarter, vessels $XXX the in

a of was in longest the team continues pipeline achieved such pleasing and completing both in solid with with new North Well was records continuing performed The the of fleet record renewable with working Scotland, Alliance In of operational our utilization -- the ultra-deepwater The year. Gulf vessels Nigeria deepest the set know with performed producing production intervention a by active, QXXXX the high the project outside utilization in at of integration efficiency standards operated three ever teams. for quarter ROV high work of the perform Gulf next high very In vessel our clients. vessels commercial zero working is clean-up a utilization an vessel Robotics with projects. for with in a in set quarter remains continued to more client enhancement XXX Well After in and QXXXX and standard XX%. next to review XX% remainder markets utilization, QXXXX vessel water again of region, early quarter enhancement vessel. fleets extremely remains planned free. a The BP, for for Our November schedule Sea, vessel. downtime. of seven another from to four business we our vessels, year. contract Seawell downtime Islands warm-stacked operations, next through in throughout between In Helix a XX of to project the Seawell was for contracted portion ultra-deepwater the had renewables and intervention been currently Mexico, achieving clients XXX% back operations works commencing well the for completing It performance. another completed, enhancement clients. undertaking no good provides Slide in on Schlumberger the The Mexico. recently production of Usual had client continued a vessel vessel QXXXX, the the uptime an due is from contracted commence year. Canary completing short record-breaking vessel. QX The to Leith, small from chartered XX% commercial the Africa set oil Enhancer across BP alignment transit work the warm-stacked the five for the the for the in between to of extremely on is went the remained completing with to QX then for gap, most projects, clean-up longest well gap intervention and depth West of production the contracted Brazil, QXXXX working good pipeline The achieving globally, of performance detailed QX, for on an has days completed very well trenching, Intervention performing support, gas work LTI

Moving on to XX. Slide

men an the scopes October which continued the for work of potential ready, affected in Sea requirements to and and Enhancer, by reduced operationally for identified worked levels for completed vessel free fourth warm-stacked Scotland, works in The cost, abandonment leading scope crew however, business has reduced including potential the work has warm-stacked scopes Seawell Well another quarter enhancement recently It Enhancer visible clients of to clients quarter. utilization, remains Seawell. Scotland. quarter, warm-stacking minimum work contracted. COVID, Intervention Our most Well due several the and three in of remains been other production significantly been The customer. allowance. completing has should into four achieved operating a kind fourth North has XX% working the Well to The reduced become the The Leith, Leith, in has smaller

keep is the winter XXXX Canary warm-stacked activity condition cost vessel. mode Islands in logistics commence in at back we in QXXXX work and remains the warm-stack Tenerife of of the QX to both We country in our allow. reducing previous transit The as planned in QX period the XXXX, optimistic operating to now and monohull visibility in end vessels seasonal to both significantly will The again that contracted Nigeria daily of are to vessel the higher reactivate in vessels will levels. due throughout years

again Moving operational our excellence with the working quarter continued to to Helix operations achieved work conducting extremely abandonment diver environmental rig on as third In Petrobras and a after by on performance requirements be The the prior another efficiency. Siem safety, one Both two client and contractors on whole to two Siem vessels utilization in work completed work to quarter three we quarter. in abandonment wells go wells production ranked the Slide X to top well, producing enhancement uptime continue for XX. The in Helix of area. order continue strong on regarding strong wells of strict a Petrobras. the fee completed X protected in meet and Brazil, paid

renewables good operating seven year, Robotics good the projects. a vessels to XX quarter on with very and continues for Robotics gas, working vessels Slide and Moving five review. had our on to non-oil during a have a quarter

to East continued our and trenching, to Taiwan. accommodation We by include support, USA secure renewable geographically now line Coast, services site energy and in expand installation and renewable energy clearance survey, product and Europe, works

have vessels. further In contract North vessels were also clearance XX%, Canyon wells XXX% in utilized, working in were in the The the wind II and charter chartered recently to Canyon third a in the was projects four the installation the energy Ops the APAC on undertake had trenching works support. renewables spot including III construction Ops to renewables infrastructure. from Well undertake XXX chartered on the conjunction in works region, we undertaking been and with Grand the Japan. Robotics vessel in subsea on providing vessel days We continuing projects. renewable large North to In utilization group. the projects a contracted spot site U.K. fleet decommissioning on subsea was survey Grand Sea, primarily Well Peridot renewable Kristiansand projects XX%, performing utilization farm XXX% and Taiwan, and quarter, the accommodation vessel Sea, QX utilized Also utilized In this and energy remove project. a World

trenching the ROV trenching utilized presence In secured support work provide on XX in of APAC Mexico, Gulf region. had pay unit works. utilization, have of a continued on in Candies the U.S. go foundation TXXXX Ross which The the conducting as ROV Coast, was our We support working East the and we XXXX for vessel, client provide provided region, six a on to farm the clients. days XXXX for wind in our vessel the will XXX%

slide expanding previously, especially the is the XX. a vessels services sector. already Robotics Slide for mentioned reference. this As utilization trenching into renewables to leave your year, globally group Over good the having I'll detailing in

to and Before I whilst our new personnel, team, partners their again call conditions. turn and produce personnel normal Erik, our strong, would work the quarter with thank COVID like exceptional for to another Helix I our onshore to efficient our offshore dealing the safe global

Erik Staffeldt

Thanks, Scotty.

our September outlines it XXth. XX, and profile, the maturity Slide debt instrument to Moving

was Our $XXX total debt funded million.

quarter, to the senior million our During convertible convertible million This notes. convertible issued the due coupon. extinguish million convertible into transaction XXXX the debt $XXX in to providing maturities we and challenging with This maturing $XXX in XXth. metrics, strength 'XX X.XX% million $XX of $XX September sheet flexibility a notes and third notes our XXXX, new A our XXXX key notes, senior of of these update greater at 'XX lot and was debt done levels manage provides effectively an refinanced this net on long-term including liquidity XX, position during Slide times. of XXXX. near-term balance our

$XXX million. approximated debt Cash net $XX end position was Our at QX the of million.

capitalization debt to Our quarter-end, was X%. net book

a XXXX discussion our XX Moving on over for Slide outlook. to

XXXX We $XXX million $XXX in million guidance cash are for follows; million the free million the range; our million; EBITDA to million. flow $XXX $XX to revenue $XXX $XX as refining in and to

for Brazil. are key assumptions, fourth X Our all guidance. range and expected our levels metrics. Helix results and line estimates in The to some markets assuming quarter We're in the activity to full X with as year-to-date our expectations adjustment our the support an quarter Siem in includes and nearly upward This follows. previous represent guidance

projects the been the are expect fill pricing weather QX or commensurate later risk in will utilization fourth We in has Robotics and we gaps pursuing increased QXXXX quarter. Enhancer have Well in of the half has fourth small decrease activity good although quarter, second -- will the completion quarter. the the the warm-stacked, with although of QXXXX, to projects.

for and assumptions XX. EBITDA region in the these our business, of with of the typical range outside quarter step more winter to color is cause in Providing season expect Sea. for fourth on variation key the North onset Slide down significant segment our Any As overall, we the provided. could the fall the by

First, our in still projects remain expected small until possibility. late North while vessel work Well Well stacked, to -- the work XXXX unlikely Sea, Intervention QX QXXXX contracted has to its completed is XXXX. segment. the on on stacked a expected into is mobilization BP The QXXXX has Enhancer schedule in QX. the mid-October. work Helix U.K., in Gulf start warm-stacked to X quarter the in in The been expected for of hire with Seawell late of the is opportunities for for and for The and Mexico, balance the gaps pursuing balance QXXXX the is XXXX. QX. of balance remain for XXXX. work X In November, working hire Siem are contracted of Brazil, with the

QX Grand in North by Canyon will of has Sea customers in in have more Intervention. with although Candies Well performing Canyon to utilization North our trenching incurred Work of as III continues to normal good you basis balance on as Moving APAC II the continue be to season utilization. in XXXX. pay continued term. multiple is is the in mostly in expected operating to Sea. strong wind Ross near go expected segment. Robotics and the fourth the to Great on over for contract a the expected with the be resilient winter the Robotics market quarter than for into sector farm renewables diminish will onset current this activity events, the

QX, wind weather but dependent. and the project duration farm survey site continues be Our clearance into will

in a with using the We an later in additional decommissioning project scheduled in also completed project VOO mid-October QX.

no for balance is HPX Facilities. Production 'XX, The with expected change. on of to Moving contract

commensurate on our XX, asset Slide of and with intend CapEx. to we our moving to activity levels the Continuing As aggressively we have overhead. reduce into cost by continue stated, previously

of year, has our million been cost recertification Reviewing which at Forecast spent of already vessels, majority our primarily remains for $XX the comprised the balance the of QX. sheet. in

of million debt scheduled million a fourth decrease $XX in funded by to of Our quarter. scheduled $XXX is as the result payments

on released work required may million with $XX of to position cash Africa. restricted return in West XXth, Our although it was again July be

of was million tax tax I'll I'll $XX this balance and it as CARES Act. turn the the the of anticipate call the end At back refunds a result approximately Owen closing XX near comments. leave amount changes at in the cash for skip Our in from We your time, $XXX the of quarter for reference. Slide the million. term to

Owen Kratz

Well, color sheets. means that Erik. on Thanks, you've other specifically. is the Most their and companies heard other market little challenging. Helix try for Helix I'd in a say This outlook referring morning, the fill to to balance companies and may be what like

this year our balance maturities minimize in of Fortunately, to one XXXX. to of this we the earlier took out challenges extend to as debt manage action sheet our and runway

we've a we the and sheet. our with cash while obligations sufficient that hand meet As goal of now, cash debt with ultimate feel achieving position said have debt to gross on balance for flow we forecasted zero our

will of operate Our another We can to going is the year forward. commodity intention predict. $XXX early this of pandemic XXXX to no all in with our leverage be to debt happened know pay low reliably date by of part continue the obviously and that end and the still end million down anyone with ongoing what prices

alternative OFS a market demand begun and energy have During recovery. community favor some this than investors Expectations with producers and evolved longer and renewables. and time, out a of become banks supply the has clear, of investing fallen to forecast it's to of the pivot have and to expected

almost negative as gradual it timing banks where If to believe The If as occur. balanced the and/or our vaccines in may continue have clear supply the to and spite place. flow reaction renewables taking irrationally example, sentiment fight depends the effect sustain but a a as for sometime adverse we across of have successful that with a do the market an the matter in reporting will cycles, budgets in hamper discipline. therapeutics, having on extent OFS slow consolidation abandonment as XXXX, top it vessel cash OFS of few effect Regardless and of of as demand renewables. then with of the PDP the pivot up supply sheets, uncertainties reaching recapitalization market going persist going of be market board. maturity, We share of to companies what in and to need believe we the uncertain of Helix, in successful and is for We On happens. They'll oversupplied of of past predicted depends all It's prices recovery investment to recover. balance the will emerge their market. market, the of particular significance still in and commodity gas oversupply an number means this, early service COVID also reservoirs the to else less destruction for through ultimate demand what For what forward. to are supply the market unconventional and investor will capacity and rationalization industry's rig on this the conclusion opaque industry's cleaned to the growing on leads of only market will the oil recovery. no recovery

these It's accepted positive non-rig Helix intervention that both operates and assets and declines, more a have Helix, generating patience, that world significantly. is OFS to capacity for that anytime at this rigs. build would alter this the reduced get part this -- others drill in adaptability is term the you'll relative it assets significantly part only and likely footprint this opportunities and are of that will take for Helix and soon the -- it's the see carbon growth generally methodologies long market there. is efficient as now a While riser-based to discipline not

work must unfortunately, we uncertainty. However, marked realities within present we exceedingly of and operate in unstable the environment the the environment and is by

help go in a prices realize and some In market long addition world-class revenues assets. way to us to stability increase commensurate our would with commodity

the are as multi-year got term and with long-term less to this the has begun near contracts is They conducive pandemic to the contracts market long-term, rigs. to on, costs. as inclined signal producers caught they not have time toward that uncertain last continued these For committed

a return also that at specifically, related drop the of and the to intervention gas spot off opinion market oil issue, intervention when least than it's OFS see XXXX, access the have has award may market work long-term work, our year market being spot an producers until market. assets was to until for to not contracts and Given the few a the We've be the next three and soon may and as predict for happen wells but contracts what intervention contracts. our or account multiyear to may just demand in up believe intervention had market to stabilizes spot work multiyear return had perceived in we history on support around increases. market are two the been It to always mature a commodity changed. prices well Very that too will inclined and/or rather

still in is value where show that the that an long-term market market. dealing to producers on and this be spot very spending. those business also contracts commit to with spot least our the are can our to always customers also we've competing But uncertain to of term, contracts the support are in goal built the winning majority proven we in type challenge adept market. market, but The work proposition near won it's can Our at in was long-term of we a recognized deliver, at our

offerings, believe we creative serious terms achievable. for to others is footprint contracting based several lower And who ways management our our increasing offer, base rigs sustainability extension and versus about own We are geographic ESG we reservoirs and drill our those producers in carbon on their abandonment overall the on improve asset have and life story, to efficiencies, through can't and an also capacity adapt of have take footprint.

revenues the increase. generated This renewables XXXX almost of XX% was We the market. our also to foothold that from seek we'll

every to believe that long-term eventual renewables market, and the the is interest for drastically market the for be that's continues We We'll to of leverage that on including contribution well and exponential The gravitating without current continuing couple the all sector tremendous growth startups a as game looking believe to we're grow to other this of let see an me company a on of remains, our a Before in aggressive we current contractor, in -- to events the be almost not positioned from been renewables, the will are market just overly not has and We positioned the uncertainty recovery. longer hasten of recovery. the recovery factors year anyone OFS renewables, the in we changed. our we risks, to but going market this see pandemic challenging OFS provide constantly we position, carrying challenges this still side in the but we're in the also and ongoing and be -- the landscape I will world back. the the context years. knocked next when market and we for we time to the have out we're The to stronger earlier and market that evolve, robust lead changed that the say navigate have are this environment a more opportunities be in and market of to growth minimize we'll a proactive to on but When some increase to say strategy are our and renewables being hope like a and feel good jumps prudent strategy. projected we changer, risk. participation what mean renewables.

can that I'll also the we We challenges those. turn pursuing are to of ahead see offset and over that, it With Erik some back now. opportunities

Erik Staffeldt

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

Operator

Macpherson. of go question Please line first from the The instructions] [Operator is Ian ahead.

Ian Macpherson

look I that contracting the was Seawell hear QXXXX even we're addition -- year a then, secured on into total next shaping QXXXX And the work Thanks. as more in moving morning, in secured you as work optimistic for at think, year, do you how mobilizing spot-dominated to of just the QX. next good roll-overs that this everyone. seem a I already in into Brazil some redeploying about and about contract have you in the to for early up, we well? the though, drop-off some you or point? it Is Owen, term given commencing -- Good QXXXX fleet lead think utilization interested environment,

Scotty Sparks

morning, Owen. that to to and one That's... Good Ian. start then pass take I'll it over

Ian Macpherson

Thanks, Scotty.

Scotty Sparks

the that discussions still will there's right into lot next get the We and approved reactivate year those into budgets budget days, there's to early It's monohulls work both but their lot a from visibility do XXXX. but is they budgets we now if operators -- visibility put off see of we that's the in do this North If a but so, placed. approved, of been need Sea feel well been we're year. are that there,

close Regarding one that executed. close QXXXX, in two have the to we already contracts place third one, very and we're to having having a

the up So vessel we start QX. stepping in to plan

because the late work this of be Nigeria. still country, logistics sometime budgets aren't early that but out also, early year, and for us. And down and it the last caveat visibility fact to high are we this now We to will have of closed need to can then was off put to yet QX. that was We we days totally the seeing approved get globally, that and Overall, in guys in it's Nigeria with QX process. months, in operational few over transit plan improved whereas

Owen Kratz

number it's visibility is that happens, not add this fields Yeah, we budgeting abandonment don't us stance is and but color The the to occurring. work going I'll of needs going which real, The we the when work out corporate producers to the uncertainty up said is know. see work that in for my comments, increases there, of is the be needs what of done as just into of amount be a building the maturing, I just the year. general of to comment. work The amount that overview be done next work,

think, I we've not to long-term being contracts already rigs. led are seen that

So little in a oversupplied. multiyear on adverse that's committed days market are to taking I obviously think, a producers

will work there. the think I I think they be could --

majors think towards the budgets renewable I to to pivoting some that, to a the they're market cash the of to need going but oil top oil I'm and -- of back more relevant sure the flow the to announced again, the market. going Does work may then in they're of from gas the that corporate the the on that not their mean cut renewables. budgets -- then sector going of relative fund it are return and what that spot on sector, and be gas to

that picture the So some it's a know finalized budgets until the and that's clearer don't a have I we get of we'll producers. little bit see by uncertain

Ian Macpherson

Thank Scotty, also helpful. perspective I, or the probably on from been Owen, Robotics. That's Robotics think by a resilience as -- modeling of on I side, the surprised positively both. -- you have

I year-on-year out that side? from on think, as wind gas half and now next right? is for visibility Robotics you the the coming with happens regardless oil look of the growth about that revenue revenues So year, into space, stream half to what of of good still something next is year out

Scotty Sparks

farms to trenching the Coast. good Globally, year renewable expect the the we've did in than we sector. out one. Yeah, support a on jump East I wind wind can Owen coming and for our clearance on we site gone We project to expect USA as to very Taiwan, had large East We've good and continue has farm mean, in. project year commence first we with Coast expected. expanded be and Robotics We've accommodation very a providing more start that won be that longer I'll our that a this service installation licensed said. the We first quarter. far and lines on had in we

that that say three similar to hard Japan. increased we're next chasing but next year in activity of part size could of but our been recently and in more it's we are are be and year, to first two projects And seeing repeated awarded to the So project Taiwan next scale, just later also in year. they

and very whether executing but normalizes seen, where it to we're there, leads towards to is year we're yet is chasing this be certainly visibility the this So it's service a or growth increased it well. line --

Ian Macpherson

pass over. I'll it Scotty. Thanks, Well done.

Scotty Sparks

you, Ian. Thank

Operator

is The Sabella. question Michael go of line next ahead. from Please

Mike Sabella

the mean, talking us could go shorter-term where relative when I see was back floater re-contracted. guys think we to right now, we rate kind of guess rate kind we as are vessels in kind you are for of of see think clients kind the, it's appreciate out I you about around rates help commentary these things the are and you look the but wondering today, And of can I of and the for sensitive kind I just to market? of to proper you just think get know, your re-contracting work. where what of if where kind

Owen Kratz

Well, Scotty that's a tough one. I'll you and start, can...

Owen Kratz

producers competing projects as are not we're not aggressive again a or as The right the to back the they much for it were we point at are competing thing that's is in XXXX, a incremental on. again, going commerciality the offer makes against as We're incentivizes go a being near means which how that pre-XXXX. good now. production that allocate XXXX, the rates at -- -- against we what necessarily seeing But better us. successful after spending gets the then this. to and so need that and rigs this little how are in budgets We working than they toward not much proposition additional what that to They're forward the to probably possible. anywhere just they they How value them were certainly rigs able to be where the were of

long think, the the perceived thing, I a across commodity increase. the greater potential think, in stagnate to the continue think you're as to a to over is see and I range, meaningful are on prices good -- overhang weigh going to pricing years, on the hard as rig board, the a but to to intervention is going $XX going I next price see as it's reliance which few be

increase an So our the into I supply Utilization before ability pricing to think upward our we part significant get start now, before not issue our a right is movement really and seeing it the with pricing. in see have commodity XXXX you to is balancing you the demand on pricing. major of

Scotty Sparks

that to add I'll as think, I well.

of unique Well to rig the as have. so not because the regionally to remember and Sea, the Enhancer compared offerings Seawell it's well, North that in are You rates they based have

drill XX% rigs. assets world-class than Our are rigs, not burn less fuel they about drill

efficient thing that burn. not that against work used help utilization, for win the into but drill using there time, the our there's increase efficiencies we the rates add they run piece can us necessarily have sure, way efficiencies far So offer against than procurement we the win we rig, us. the demobilizing are mobilizing to work is drilling but rates rigs, and more battling our fuel that The more time, is assets

Mike Sabella

for as From you if Yeah. to chartered kind think about as to market that invest Appreciate growth? is talk some meaningful you think the of we just renewables chartering potential need of year. rigs today, capital you we kind perhaps vessels to about -- the continue to And where are and that that. next there all get to that growth And these realize your ability perspective, them. for vessels then about charter any need of

Owen Kratz

all you turned been to at to up There you builds. new I identify you market vessels recently almost participate tendering presence. the company how for an quite as market that offering if is a to needs an out providing every that we've there signed on issue now larger example, there taking with you solution, be our service Monday a to opening them. that it's by is wind XX for where a could is for renewables The Yeah, we mean, were Thursday, current right the tender in a time, leverage everybody Giving farm. oversupplied. found -- time some renewables a foothold think into niche, we looking

So in Personally, a return. and lot them a ESG alluding challenging to sake able that think sustainable big see to what color I making from my I comments was the be announce the are are component capital to perspective going to that's for for just commitments. it's an of being companies of

more are We balance focused on trying our sheet. to protect manage and

a more little market bit. stepping So incremental competitors a that, that to we renewables market and the the you watch taking we'll go our in we'll out could follow of flyer what with where geographic as see large contracting look the but through on us sums and the and would add, provide and grows on a more capital renewables. And we're renewables and already plan investing footprint evolves matures be play expanding Hello? not modest integrated going won't contracting, approach -- alliances, way a to the we services basis we either them but the at

Mike Sabella

Yeah, great. that's Thank you.

Owen Kratz

The repeat or I'll expansion though one just this project year may thing what the think said, not large from possible already now, showing probably adding clearance is renewables that to and are Japan. in in does replicate site we are pretty add Scotty clearance but at to that that areas the we work, work clearance although a that Taiwan level, additional we site I failure may the would did offset incremental replicate. that benefit it site any

Mike Sabella

all. Thanks

Operator

next question ahead. go line George Please O'Leary. The from of the is

George O'Leary

renewables natural jump of given where exist? get the capital pursued and or space haven't are the yet? to into are that types hand have as the know of you just the done work in the the invest any on the An but assets what the of clearance given get not extension already to of site of front, those -- the with go few and market you questions kind into there of out aggressive and and and you in there wanting overly prior wind about you've work that that you extent extensions you have today a trenching to don't can opportunities do are bunch today assets We the to headlong asked just have curious you comment -- is necessarily already,

Scotty Sparks

require like independent for some farm and trenching out so and wind we U.S. that works we over completed like farms have expansion for that believe in our trenching we the best-in-class wind the just market is be assets -- until and wind licensed farm been feel for we've been a space an wind XXXX. we farm leader We've said, trenching we George. first contracted We years XX will I'll time. the projects trenching, take there will We've in U.S. there. that trenching have the

year are We a we couple tendering Taiwan. also in projects note next of that

So region an the trenching. expansion And we're expansion renewables farms or we're seeing Europe. APAC for wind an seeing in into

assets The timely into. build of to or a to the they're asset, and other is to leased build that side trenching expensive get quite

in So we feel we're a good place.

have a and globally. are good record track that we the very On we seeing expand side, trenching

for good that's think, So us. a I market

George O'Leary

rest you, of asked The questions have Great. and answered. guys. my been Thank

Operator

of ahead. next question the Please the line [Operator go And from Schumm. Instructions] is James

James Schumm

some wanted understand in second obviously $X just sense gave from revenues better is QXXXX the I there the and quarter? utilization. off in that a that $X then of pointed Well reasonable in the million quarter. I Intervention benefit cost the the EBIT may million from try it one-time cuts. out to was other to -- maybe decline came you benefit make million think thinking to increase $X or Does you Is that maybe balance in

Erik Staffeldt

there Yeah, benefited think -- that few us. Jim, were I items I think there

and probably associated towards say, additional, stacking the Seawell that. and operation have the was I QX additional some incurred vessels. moved in the stacking with reducing that of can you And cost were we there aggressively the cost with think associated QX those in QX support

stacking time, daily and it also second QX so additional of And downtime -- have that and those a incurring cost vessels. some think, reflects in you the QX, so of in testing I really did was stable Also QXXXX could was say one-time a the quarter. where cost some

the improvement. are moving that And of the have so some really driven parts those

James Schumm

payments the what the just of cash are next then do the your refinancing year cash taxes convert, -- year? next think then and the be you you going And will interest after think what Erik. to do be Thanks, Okay.

Erik Staffeldt

withholding on work, be taxes taxes will really pure don't that being cash our associated foresee I tax tax payer cash the environment. paying foreign this cash we'll standpoint, our in a a From with be us

for taxes. be and Africa, withholding it'll West work So in Brazil the

going we think I probably debt. the far as As for less I it's our cash interest, you're -- as $XX range than our down continue pay-off think to taxes in million looking, and

James Schumm

just on then and capex. lastly Okay,

could recall capex guys maintenance and wrong. be had this sort you I that million maintenance year, think, cost year, $XX but saying So vessel this of you have heavier you I I

So a more I'm is capex like number? year's million if just next wondering, $XX

Erik Staffeldt

early for for from did process. that heavy year was have Jim. in still process, We first the Still the early the year, and vessels. in us standpoint, quarter This in so it a five

I probably that drive think $XX in there think I range at I the down. possibility but to this caveat for year, would million a $XX point, is next million to

Owen Kratz

million. I'll Yeah, under maintenance year, was we're still but a add. $XX This just big

is maintenance no the amounts our instance, footprint but going year, capital for we mean we're invest cost of renewables, next down, to said increase renewables, capex. but not in doesn't that that large the Looking discussions going to to back on

consistent truly until identified, we have really this is, can't capex we expect but it purely, those to So would be plans say with what year's. next I year's

James Schumm

Okay, you great. Thank guys.

Operator

Please The next David Smith. the of line ahead. go from is question

David Smith

Hey, good a morning, quarter. congratulations great and on

Owen Kratz

Thanks.

David Smith

you hoping adapt opening more in improve regarding ability Intervention Owen, and remarks some your the you spot color compete on market, a your give that. offerings. Well to mentioned to I ability in was might

Owen Kratz

our One, Yeah. for build Marathon, acquired last and essentially backlog from the Droshky year you saw Field that abandonment. step us out

there see pivoting going renewables hands then a the They're into reservoirs. producers, they're majors divestment that's the towards we're of on more going is think, uniquely I aggressive. smaller you placed. When

and whole who of producer-by-producer probably so of sum manner would be So a we believe means It's our record is on them, or something competitive there that it's payment that like history, offer. contracting, can and out based do, company track -- with take we be going, can market can identifying is have lump offer a those that page partner or in I matter trying we of other in -- willing we retains to any and not. our now employ. to to we can contracting can are don't but We advantage our which we kind. Other getting all can models likely different a

you detail don't keep into posted the but to we what that, we'll much can too So get of I about on do. want specifics

David Smith

Sure.

Scotty Sparks

management they And I position alliance, have. helping that a with us the mechanisms, we don't they work others lead the contract an with added where them take where with who alliance reservoir we can with. a Schlumberger position that that in that in good well take out a position in our that. and also to we're where can unique benefit gives us We're are different and can so and that contracting to have to contract will help optimization

David Smith

Appreciate there to in that. your similar months the And obligation any regarding outlook discussions if take wanted the change Droshky compared six is to deal. ago, to P&A or to ask, on potential

Owen Kratz

little beginning at price a with commodity blew of left producers deals, those the how models. sort of splash dialog up Following of year, in the had and with uncertainty us this When so ended. of engaged sort in that all that made to interest that an the value Droshky therefore of discussion had the were producers, we in number that a pursuing similar

the is dialogs enough I the recently, is Just to interest of are a market, that starting expressed that's again up. back returned being that and stability number there are there think

matter So being for patient right waiting of deal. and the a it's

David Smith

Great, appreciate Thank you. it.

Operator

next go the The from of Samantha Please Instructions] [Operator line is question ahead. Hoh.

Samantha Hoh

my taking for Thanks question. guys. Hey

pricing of the a work much there on variations covered profitability grounds but talking we've could specifically, oil traditional and So between terms time this about and Robotics side some wondering, spend we the I in really like your was renewables the if today, lot of are gas?

Scotty Sparks

decline for everybody we've they're to sort and rates. but and the holds good and vast and as ROV than last rates Well, the hold in niche such oil a rates the few of recently awarded gas knows, that I'll those sure as better traditional oil take we've years Typical gas trenching, is that. been the work operations place managed I'm

work So level renewables that trenching to gas and on rates because even have not may oil able good side, previously. the at the we like XXXX, for side contracted have we hold on a said niche, I and out and

we're that of services vessels The plenty at, there's spot renewable other available. looking

in to should us that that line. therefore, cost be and feel go project take pickup to able keep as works we I charters long-term have opportunistic forward less and margins and commit having our to we on charters be spot to ourselves we'll won't So lead to

Samantha Hoh

here, wondering, the just renewables? there in in people variations establish rules And region is sort for office any work if that local an you flow kind into just picking standards, to having there just you're like expand I'm -- just employed sort capital is globally in increase to side need are of terms up globally being the that in of as required for country, OpEx or them going of by that's example, of you in the with where for renewable

Scotty Sparks

in in I I with been the now. Taiwan Europe in years, the is that so. think the don't and expansion established right I working that. covering we've and we're well can so placed last work for We think large we've XX U.S., obviously mean,

Operator

ahead. a is line from There Schumm. of follow up the go Please James

James Schumm

one. we for already thanks say, me sorry, of year. you covered contracts sense on early and next just talking maybe what place in QXXXX, putting if what but in third like duration the back two a to about guys, this, Hey I'm these? of potentially Did you utilization and the close for trying might you mentioned to get kind contract are look

Owen Kratz

to XXX But potential at days. begin general, final days because on expectations hard Right -- not worked -- there's sort times to there's could is with and of our at two this days of a now, that it's work minimum, in The are a a which are to XXX lot I follow looking would with, XXX XXX in probably of of details we looking -- that this a out is we're plus like lead the something contracted. contracts. base expanding and say, on

Scotty Sparks

discussions currently period All gives that, options base not we're March we've in And and works, of of so in also the is in contracts Australia, decision a has these have are those just then and final also On chasing. there. that in guidance a fixed go but it's of for been awarded have year. three contracts what obviously other regarding that so top we're that we the we and options work some discussions next

firm some would seeing have work. options imagined... that we're there's and then work visibility We more got for firm on a -- lot QXXXX. this So We've

James Schumm

just... Okay, thanks and

Scotty Sparks

Sorry, have we would imagined...

James Schumm

be... to just Sorry,

Scotty Sparks

Okay, after you.

James Schumm

of not clear, XXX, XXX both days for right? per contract, just a Sorry, contracts, to be the it's two

Scotty Sparks

Right, in with that's base that our and others. the across and two hope like to we add to then discussions said, we

James Schumm

Okay. very Thank you much.

Scotty Sparks

you. Thank

Operator

There are questions. no other

Erik Staffeldt

your to having February of Thanks joining quarter We for look call Okay. you participation, XXXX appreciate and fourth and much on us interest very in you. Thank our forward today. XXXX.

Operator

conclude and does thank your lines. That you now We you conference today. can your for disconnect for participation the call

Helix Energy Solutions (HLX) 22 Oct 202020 Q3 Earnings call transcript