- Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to the third quarter Helix Energy Solutions 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, today's call has been recording, Tuesday, October 25, 2022. I would now like to turn the conference over to Brent Arriaga, Chief Accounting Officer. Please go ahead.

Brent Arriaga

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

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

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

Kenneth Neikirk

statements we call the based making Act safe forward-looking fact, under business future financial and XXXX. under are assumptions anticipate and or made in historical may or forward-looking and Securities expectations Litigation of are trends call, on Private this forward-looking of the All current of projections or associated or projections statements harbor today. as other Such events, industry statements conference of results. include statements statements certain this During estimates than presentation, Reform our and in provisions conference business

with Our reports most in due XX-K, our on Form factors, actual including and set SEC. annual projections to future those quarterly of filings X our results uncertainties, filed and statements may our and assumptions Form differ in report in a forward-looking our variety and materially from other risks, number and recently forth XX-Q on the Slide

this release, financial measures. undue are disclaim any duty update do therefore, or October statements any report These are place any the only of reconciliations, regarding reliance advised forward-looking by today, a that and forward-looking on along You Please available we any with that you earnings We measures comparable statements, reconciliations to of Also party our at subject Investors made call, replay GAAP as broadcast information -- section website certain not call. with accurate written oral replay presentation, this non-GAAP the the remember final sensitive for under our any statement. annual third the of undertake rules, our should helixesg.com. made. may and Owen? this disclosures and no be information call. non-GAAP to In longer XXXX, any XX, speaks of this of presentation of certain provide financial SEC conference call time of on accordance the matter as during not of this be may this slides

Owen Kratz

well. hope our impact Thanks, performance rapidly and the Ken. XXXX are I to But color morning, and outlook and QX discussing their on for operations. and its doing our review and XXXX the families start provide Good QX morning. balance potential results, we before beyond. and We year-to-date of our This there provide out on results, want market acquisitions. improving everyone recent We'll get by we'll into

to expands provider, Helix and Alliance. services, acquisition added diversifies field diving intervention We've facility revenue service our markets removal a and stream. of acquisition water our positions and services, offerings our full pipeline First, abandonment The P&A well existing marine in and surface as and services. capabilities shallow our

positioned improving the our a is existing well offshore operations, to execute from preeminent benefit offshore We environment. Helix to Alliance energy company. Helix our continue transition as to position strategy Like

include quarter full Helix Our quarter. first third the for results Alliance

Thunder our acquisition Second, Hawk Field. the of

ways. securing assets wells the acquisition and of X in utilization our our equipment the of subsea XX.X% have related assumption nontraditional subsea for continues The the of abandonment We acquired obligation. strategy for

near term for [indiscernible] the long secure maximizing to expect for in and We benefit term. the production

highlights key a the high-level X results Slide for the presentation. to provide X through of now quarter. Moving and summary our

renewables Field, newly Alliance Highlights market worth. During and in all to with strong their Hawk quarter, of again market increased activity generating quarter start strong strong development our across production from improved and support activity the QXXXX global offshore the our rates. increased with North; activity, marine trenching be energy the new the Sea; Field. seasonally West facilities from working the driving in boulder Gulf the benefited Strong in and acquired Africa; performer good robotics grab. primarily and Thunder continue steady and utilization to were systems third our of of a Mexico the strong Helix very Droshky from for day's segments the with energy levels include utilization Production

improving sales with were extension On million of quarter Siem negotiated for reflective the X, X-year our the market. front, $XXX the contract Revenues second of increase the an $XXX results. we Petrobras million, secured for over Helix quarter a a

improvement was loss net million, Our QX. over $XX $XX an million

our was the net impacted the Our impact nearly it unrealized all -- all million. signifies quarter noncash. EBITDA which to U.S. Adjusted third with negatively loss $XX U.K.-based FX nearly inflection for entities, was $XX Helix. believe strengthening and for We by primarily an dollar, million of negative quarter of the point

the our in at continue we're room Brazil And for our improved improvements results. as with this We quarter, And operate we employees an contract XXXX. recent of high for starting recovering in market and the benefits foundation with have offshore levels. flow X-year improvement recognize Our to set to see through there's Petrobras.

end seasonal market work, to at see Slide with on perspective, the we QX $XXX the improvements but to from quarter XXXX. On outlook X, in million. impacts our cash a sheet with expect We balance contracted combined the our of was significant balance expect our results,

of acquisition position the discussion our in in-depth of of were I'll operating $XX dock cash approximately debt our We free resulting Scotty We $XX $X end, dry $XX recertification net Alliance. $XX results. to million, costs. of spent in $XXX million for of operating was million. on million quarter call At including CapEx, million. on now net our an flow cash and flow million cash a quarter, the of we used turn over During

Scott Sparks

good Thanks, everyone. Owen, morning, and

to excelled and anticipated functional our year our conditions expectation. year utilization and fleet, the team safe. in Moving set favorable onshore be reliably visibility, team's in continue to than produced could to our had to better the on XX. across high a Slide terms standard, Market backlog keep turning the looking improve, better and in and in offshore global and that more the with and strong The point We exceptional operations continue forward and we're increasing rates an quarter QX in conclude XXXX conditions. early stronger

of with assets. [indiscernible] contracted for numerous place Our in some contracts outlook days improved XXXX for with long-term year-over-year high remains visibility and work

for Africa, our positioned In the and operations All third Mexico globally Brazil, are Gulf XXXX of continue and U.S. operational Coast. Europe, well West operate we minimal beyond. of on quarter the in the Asia, with businesses with disruption XXXX, of to East

We with for continue standards efficiency at quarter. uptime strong the to operate high

and shallow the with of and the of the decommissioning for on third and improved of the of together. welcome expectation, that focuses line the the the certainly are I'm Helix team. newly part in are them the Alliance's pleased a mostly -- we space. constructively acquired on Helix teams water business, company well on performing happy process say to board working producing revenues third $XX million, a profit improvement produced vast quarter the the integration commenced million, we in During first of of quarter, gross $XX a a XX%, positive gross quarter, of million, $XXX we quarter XXXX quarter In third the margin significant Alliance to resulting as against XXXX. of our and EBITDA a course, profit generating is have and of improvement

multiple for utilization utilization Helix provides globally performing Asia operational the XXK works work system The the owned in Helix intervention well XX% XX% vessel work Mexico. contracted had then Pleasingly, QXXXX, system. X and in a the quarter, campaign XX% commenced of Alliance multiyear West fleet Systems The Shell the U.S. customer The in intervention renewables of X vessels then of the the numerous vessel the enhancement deepwater. for one utilization XX% both client Gulf XX% of high XX% XXXX with vessel further ultra the XX% overview SLB vessels the jointly strong Helix third another the of vessels of utilization, the utilization XXX of For well operate chartered Sea the QXXXX one fleet in for and working Africa. again, The of on quarter North Helix for working in for Mexico, Subsea campaign more activity key under XX in utilization customers, is the days our X of wells ultra jointly in working vessels agreement. with utilization working package. quarter, to and into expect and work multiyear XX% operating trenching The achieved between quarter. recently with compared of projects second of well and in intervention in utilization contracted steadily the have in vessel XX% achieved single business Brazil, in in XXK for Europe, we for a the clients Alliance achieved globally, high renewable the ROV of Coast. currently for XX% continue and Robotics The the of visibility to vessel Slide as deepwater. Service support, on a quarter, completed with on good in clients contracted to Gulf The part days SLB X X,XXX Alliance fleet had intervention XXXX achieved Mexico. utilization of utilization XX% X SLB increasing customer, Both potential the utilizing third utilizing production owned Gulf detailed rates. strong rest utilization East well

Slide XX. to on Moving

in vessels XXXX. customers services. seeing awarded XXXX awards much and expecting in X improved Sea over or a and of much campaign Enhancer improved West customers, performed and vessel XX% for Shetland. to works working the X The spec production operations is shortly. already higher vessels due well would both We utilization. in for utilization continues commenced improve, further works XXX Africa. with the XX% U.K. X our The customer the we enhancements and some the seasonally with The in rates the the X months with Intervention for quarter have wells Typically, vessel decommissioning diving achieved North remainder performed of business Sea. and had periods, in also for on utilization west for Well Our had business enhancement utilizing one to North vessels Sea QX of contracted The breakdown market good now our visibility days another in achieving contracted Seawell the stronger winter production both on a QXXXX and North utilization decommissioning the further good and for wells quarter, North Sea in

most work wells completion in clients. Energy. fully QXXXX to two enhancement is in wells for from is is later at to complete much campaign conducting for each in and time, are paid QXXXX On Once QXXXX for for confident to XXXX commencing with are operations APAC our transited winter XXXX. to contracted of However, and expecting XXXX, Zealand scheduled planning half clearer APAC only of The in to vessel for on in contracted QX, back abandonment X-well scheduled the in abandonment our of a minimal transit commenced Nigeria a vessels QX half and The for schedule and works undertake the to Australia for executed and Zealand, on the paid remainder client campaign, in stack contracts covering to program in the work another vessel. works a the commence July opportunities for XXXX performing in XXXX. the and region vessel New end and inspection preparation we not a then completion continue are the the existing its work of transit work period of this for with in now second we planned XXXX. the work the August further of regulatory New Namibia. in the the undertake the Nigeria production Cooper now then to The The XXXX. is vessel its in a maintenance into On vessel months completing after for in X Australia of of maintenance drydock set first

years. in activity completed the on December XX. is quarter in Moving Helix had The Helix work utilization XXX% on Brazil, XXXX four had X quarter. of third utilization, contract In well a to and commence Siem announced with we to X XX% Slide we wells. strong of for the Pleasingly, enhancement strong with production decommissioning for Petrobras the the recently to X set extension that Siem one

contract it X recently XX% a substantial The now utilized with the vessel Siem increase in survey mid-December. as undertaken Helix QX XXXX project works decommissioning the a contracts. in prepares and until charter is ROV beginning rate for for December awarded So X-year under was Trident long-term

year pleased We XX again, expect and with once into long-term being XXXX, to a have far XXXX fleet our for well intervention compared intervention be is us back contracts. to in better we of are going to secured to rates, Slide both Brazil vessels, both provides utilization. our detail vessels

utilized handed X a Egypt the Sea. renewables the the vessels Moving performed for season. The trenching, The are further planned North III was In during project works renewables to client. works renewables perform region, to APAC to gas oil and a project well clearance Horizon North Act-compliant operations QX trenching the fans support XXXX site QX. for is our is another standards utilized changing expected QX. days currently the utilization last worked in back vessels performing chartered Taiwan. farm our an site supporting of trenching on renewables for X X survey trenching another performing and quarter, site Robotics period. the support, a Thailand, ROV Canyon vessel long-term survey Operating survey Canyon had project with vessel renewables-related then customer project. on project support extend. On and review. in performed project for quarter, XXX its working site [indiscernible] the XX wind Robotics another strong built good options Sea then their completion to grab of to And utilizing work into The Singapore XXX% with completing and vessel offshore had of vessels XX the for form customer another customer and The Jones had Grand Slide Shelia and was own has further Gulf in mid-QX, In utilization. on the at contracted owner. Both days vessel U.S. with project for spot node Coast. to oil and in trenching extend. recently a vessel's contracted clients enable installation East utilization gas for and undertaking vessel maintenance building Grand our well the seismic another project in and with II the In globally decommissioning projects commence XXX-day have on high operations in options non-oil days, boulder extremely XXX% the completed North primarily work Sea, U.S.A., in-house project, work and to good and projects works between XX the been contracted continued the the for vessel the backlog an The further in the Mexico vessel ROV in both continued trenching to The XXX% gas projects. strong Bordelon,

mentioned water year, markets, Support and beyond. earlier, Helix in Alliance, Service Slide vessels, and acquired well Construction and shallow provides the Robotics and setting ROV have our As for a in backlog utilization. business, of good performing shallow visibility renewables XX overview XXXX good good oil this water robotics abandonment decommissioning the I Slide our a and foundation markets, reported and XX we tightening both our gas as newly details and globally trenching global is Helix segment.

spreads have and performing uniquely three Liftboats, Helix to Gulf coiled team XX Alliance the Energy crew support expected, of company operations Offshore customers. Services and made demand days for course, operating the the undertake This is into are lift that decommissioning had and of with of removal decommissioning. tubing P&A X Helix of detail Supplying combined has Helix allow tackle systems had deployed, spreads services, XX% Alliance P&A integration the the OSVs has XXX well Slide boats positively and These shallow quarter. and for full-field business tubing and in energy positioned operations utilization Helix QX in the as water board. Mexico the conducting utilization vessels to only had to and XX%. earlier, XX% Heavy abandonment. Diving the fitting construction water utilization. supplying Systems us decommissioning coiled position operating Diving and on we the Heavy the and with vessel increased Offshore; barge as XX well XXX and free diving Alliance vessels boats; supplied happy and Offshore of spreads; in also combined and three company a on leading with with utilization days of assets the conducting platform up and free performing mentioned and be marketable the to utilization XX abandonments and parts: XX% pipeline in lift is lift the across shelf heavy of heavy current abandonment X parts one shallow in services the is crew diving boats of such I to services third a X tools of barge. five company OSVs be of Lift. Helix Lift works. with well As providing provides and

standards Before thank being to a I you quarters compared in efficiency, team Brent. quarters would and, improved operational minimal times, safety best strong partners. to the global recent I in high turn quarter with onshore, to and our call again XXXX, produced Helix again, X one of the those and over performance. like Offshore set vastly of amputee

our rates and to better long-term some improve Our our terms conditions. of for contracts, well-won businesses, and markets vessels strong with to for leading all utilization continue improving

we the recovery now on start set as I Brent. call expected next much will in the thanks years team. few shape, has quarter turn us of the and third you, The better to the look Helix our to to over be

Brent Arriaga

Thanks, Scotty.

XX. Slide outlines debt It to instruments profile their maturity XX. Moving our September and

with million debt end total million payment debt was the quarter at $X $XXX our Our third QX. the funded of of MARAD during

payment is XXXX. February maturity the semiannual next of Our MARAD in

Slide amended on $XXX no net including July cash slide liquidity borrowings cash on end, million. of availability the increase. at sheet for long-term the our outstanding $XXX levels quarter million ABL and was will we an size debt end, with quarter million $XX On resulting key XXXX provides on a restricted discussion and for outlook position balance the X, of with detailed XX. update increasing the and we and our million. At debt, Moving to turn $XX of had facility This to I million our ABL now of Erik call over under to beyond. $XXX liquidity metrics,

Erik Staffeldt

Brent. Thanks,

results second the during Our improvements third we the of for second the -- half quarter the forecasted performance XXXX. for support in

Although million; assumptions to as abandonment Slide work, deal results EBITDA significant and key and ranges date, including key some operations March could we with at key segment levels. $XXX will to million Revenues and segment by the free are cause provided. and the of on through follows: Providing between million continue for in assumptions water $XX $XXX fall improving annual the 'XX, variation our from outside our flow estimates. XX. results on and starting million. from expected adjusting region breakeven we operating these balance Any between market guidance ranges our Helix assumptions and our our our our and are include These million; between our cash our $XXX Brazil to $XXX contracted estimates very Alliance, and the shallow outlook headwinds XXXX, Based operations, high remaining offshore

continues improving into XXXX. utilization be segment. First with and Mexico on of Gulf with strong work market, expected The to Intervention rates contracted our and the QXXXX QXXXX, our strongest Well extends

and have We expected with XXXX. expect into contracted region. into vessels QX this strong utilization In U.K. the in strong through Sea, North both utilization QX work

in increased the increased in in the were expect work in X-year the The rates first quarter half mid-December is starting the vessel its work expect the we XXXX although into region, the Africa, of abandonment Siem strong late to reflecting for X to survey weather utilization Siem commence winter planned performing XXXX. abandonment field Brazil, the then APAC the region to transit the with November, In Petrobras, In Trident X Helix contracted QX. lower work We in to West ROV QXXXX fourth risk. Helix Brazil into is December. well X rates prior late contracted the with into to months

Grand for trenching work, contracted The to Enabler the the year. Bordelon utilization in decommissioning our continues the site to Gulf of with 'XX. for utilization in segment, Shelia the Canyon the Mexico in balance North off The ROV Sea, that December. on customers East to in wind follow-on with clearance. strong into work support contracted strong scheduled of ROV Border 'XX expected projects II expected utilization Robotics XX. support good and Overall, of is Moving to Thailand Coast returned is APAC U.S. contracted balance perform project the for Slide performing working for region. completed Grand multiple remainder of III the to Horizon The commence mid-November. farm trenching With Canyon

facilities. with change. production contract The balance to the of on 'XX no I was for expected HP on Moving

lift where stable OSVs our spreads shallow Droshky opportunities. on on likely strong limited currently business with to continues acquisition. Continuing idle services water start [indiscernible] quarter, expected X field services Diving a later production and in strong X should is as utilization the expect and marine to on and maintain Coming business variable X with for units. off X abandonment benefit machine seasonality the We some the with the in are tubing some QX. coiled P&A should to our diving Liftboats to There The have offshore Slide X Thunder energy we seasonality is XX and crew from segment. to heavy deplete XX utilization variability production to for boats. Hawk have the new the

XX. Slide to on Moving

it's pushed heavily impacted that -- amount approximately by million. once 'XX again, 'XX, for $XX Our CapEx into 'XX we forecast for heavily the

Alliance, the forecast $XX $XX of balance and majority our the of debt year maintenance our flows. primarily Reviewing XXXX to range inclusion our and be sheet, our The heavy for falls funded CapEx to operating into With is related million continues remaining is expected starting of our not and comments. for XX year. to the At for on $XXX with I'll to slides, closing the them your leave the skip for Slide back change million beyond this I'll a 'XX outlook million. Owen regulatory project call for currently our cash and time, CapEx reference. turn discussion

Owen Kratz

Thanks, provided Erik. say is a The 'XX of events rates. market utilization in a even stronger improvement to increase with 'XX. Last along I list and we significant versus significant demand improvement contribute quarter, that What in than to today now last confidence that quarter. continues should year-over-year can is our

we we appear become rate the while of in demand hedged all demand the means improved this XXXX, rate rapidly of This to headroom offered utilization beyond that further expected improve that that it's during rates the beginning fact, to seeing. extent for realize a constrained customers may XXXX. already returns we're increase. increases that but asset we Rates before still we In as cover improvement result XXXX, there's had

collapse the inflation recovery. The global Of all just course, know demand as in that rapidly. can market rose of dramatic, XXXX in was the state that we but aware the all we're rate of

capital warrant. balance markets goal capacity should the to Our converts strategic sheet, manage settle to maintaining our the remains the cash XXXX

renewables, exceeding significantly one, of future, our number legs to wind. increase, positive. decommissioning intent maximizing the reserves; of, the did two we decommissioning; expectations. and it's ongoing adds add specifically free our to be capabilities, anticipate transition offshore energy will our model it's Helix Ahead cash Alliance, and demand foreseeable X We this flow three, which our already remaining initial acquire incrementally For of meaningfully to

we spread our credibility a acquired our our as that renewables field the farm renewables clearance in building We're global the We also of increases a us remaining and Coast We've Hawk wind while furthering with backlog decommissioning in adding second may East add along with becomes reserves, maximization future. site majority capacity previously increases work space footprint. for our Thunder more Trenching also our the interest available. as work deepwater said

while growth, time, flow current is balance cash the the maintaining If our of sheet. navigate same point building challenges settle balance the or to consolidating goal feel within not and accretively that debt. remain value a to or returning Our greatest or will We'll confidence for shareholders strong but whether model, of generation. XXXX the by in what to is achieve the our our free opportunities We're growth adding to and bears shareholders, our can position capacity the to our accretively the by we we cash position. to out is continue cash managing balance And to convertible via to positive the value looking potentially niches business to our share at repurchase dividend. itself for cash incremental market add sheet sustainably expected sake add reached the and

in then our promotion Sea the observations call around a excess all to gas an of stance year Some centered note should pivoted tax imposed and planning increases since development of from more against spending. for decommissioning A any no one, spend ago, are: with XX%, market talk on oil energy. credit an XX% sustainable is not dynamics last North The deductible number on government U.K. tax decommissioning. profit the I that and production purpose.

recent decommissioning for increased, this our at the of remaining Overall, services had I'm this down -- on has work the sorry, that for current working the work. other our capital new FX Sea should the than demand maximizing for the spend of any we're in pace decline we us makes though, during it years. casting future when while this some downturn reserves now significant reason, do looking and been increasing For has into region assets. The effect well deployment you'll we've of that technology unlikely we're of the winter developing that see months idle North that capabilities to enhance the

X finalizing second Triton almost years we Petrobras recent compared for additional The clients, the has for with soon. item beyond hope the past. for with X extended is has rig surged X-vessel SH SH is contract Helix a tightening We're market clients and has and X This the the X a and years. Brazil work demand further. market to which becoming with to multiple vast improvement announce Brazil certainly that, represents contracted

is the we'll we and the growth story. We improvement focusing free that and really The Erik? XXXX accretive efforts, in position to our is the item our -- we've the forward as to demand West look excited steps on Also, be for improvement Helix the the builds. near report Africa to opportunities continues Coast sustainability corporate and to East develop on growths in We're to the the a foresee wind I'd transition taking very we're that third market offshore also dedicated in successful chasing there. additional a than deliver like would develop, demand. presence markets opportunities are are current note of continuing on that a believe the very and our cash starting plentiful, strong, strong our of are the as that are The outlined options U.S. APAC wind beyond is flow in margin rather increasing, presentation, we success and to sustainable the ESG The be future. XXXX based ones in market energy had campaign and in considering we're on true to enhance publishing markets first for the we believe sake. we're item last offshore fit work The correct and them.

Erik Staffeldt

any Operator, we'll this take time, questions. at

Operator

Instructions]. [Operator

comes Our line the from first James question Schumm. of

James Schumm

What's how those backlog businesses, of those competitors rough in Alliance's to any in to of you market businesses? businesses? any regard have many on there your in do And speak So average? share

Owen Kratz

Helix a the is contractors, each Alliance combine a of required to us, multiple we the of in assets limited number surfaces, smaller with advantage. that we're the that or do noted cradle There in gives of are to full That are contracting do as the aware a from only the of which field so provide believe, a service full question, presentation, competitive competitive the has to of decommissioning contractors. order has contractor all to The a a grave. number decommissioning clients

depends and which the Alliance of between it the available you're of on asset say I'd assets each concerned, in as XX% looking owns far classes But class As share at. market of XX% in is general, assets.

capability if at has look field only. it's integrated but -- Alliance who full you So

James Schumm

in any it. there -- then in like Owen, those, backlog Got And or businesses? of maybe any is any anything those P&A backlog

Erik Staffeldt

Yes.

I Jim, MSAs, think have methodology right contracting they the standard now, which they that So get call-out is work. standard

backlog be at I So added if activities little, and QX. there think that there's on there'll type from are in any, being that of report bidding projects do backlog the think will it very future the of based a on I our here end opportunities the based be where on of standpoint, bid.

James Schumm

got then Okay. rate it -- you've Great. expected QXXXX, the like And QXXXX the for sounds utilization work. You've next -- year? on the what's got so

to going Zealand year. you've said you year, a work half you days second utilized. said half the I have got you're won't the of I XXX think XX-day year, you period in but so And in in next of first then that docking New Australia the be the believe but you

So Brazil? through great. in some what Did what's looks would could get there just maybe you beyond you Or And if work the then 'XX? be any talk like? utilization help

Erik Staffeldt

So off Jim, I'll Scotty. and start to and pass it then go ahead

right. you're think I

the that were going an and revenue, time expect all that of happen As working cost gaps that far when from dock is being not paid, working. think, is obviously, standpoint, gets you vessel the not mobilization, vessel in be, to year, the to mobilization. dry I deferred getting working. mobilization, the But that is for as paid the the some where the both We vessel vessel accounting or is to there addressed we referenced early

days I again, of But think for work. there periods contracted two we our in XXX-plus right of mobilization expectation the once work, have have we is contracted now, vessel.

Scott Sparks

Yes, those mobilization are the periods of clients by fully that vessels. are taking paid

we're So we will that time period. the have next And work unpaid now. the dock expect dry to be the XXXX then into only year expecting

James Schumm

do And Australia Brazil? or Okay. that's we know in if

Scott Sparks

some be we'll putting out that on we Brazil, So work have information do very and in that's shortly.

Operator

next of Lewis. the Our Craig comes from question line

Unidentified Analyst

Thunder you was of three from improving of Thank in higher. of was more could, much a nice from Any if wanted the that How that How much talk to was I how little see you, kind Alliance? out a much from of market? to everybody. way Hawk, parcel and overall about morning, roughly baskets? Erik, good move i.e., through thinking maybe those upward if that EBITDA, I bit was revision like were

Erik Staffeldt

Okay.

tell -- think I I equate So wouldn't I from you, Thunder Hawk would at the to revision upward all.

So expectations And Owen business. I course, think as it's mentioned, really as the works. Alliance it our exceeding a is existing of combination business of

the to some be there, -- the what at projects obviously, had identified. increase, I would contract that as guidance and put we was look we've and derisk out of And the think we able so up

expect fourth course, activity think and to past, market very a I here third seasonality, the really have And wider including the continues rates improvement little Alliance it's the into then, is we also time. improve, seeing time we're why utilization well range quarter with going of but well this in Alliance in North and the do quarter. performed the bit the than some continued and the probably the that's fourth in during We quarter in in intervention Sea. had the we're first

think combination Alliance the it's upward our that really I So drove of existing a revision. really business in

Unidentified Analyst

good -- That's you When Okay. you sounded Are just We're or earlier we're don't you word, specific but could on I And good. work hear. realizing to going to the that months? XX really see there where contract, days. is it's well i.e. some another Q X, -- any on mentioned, starting longer, seeing think started this starting rigs pricing type some mean, get starting to know, guess term then see be it year. great I we project demand we to over I to of to still I next, whatever the or want early asset shortage not longer-term the get BP said customers to

Owen Kratz

is to beyond we that already commit not that. X to to. to to whether I years we've wanting want mean, agreed had or our assets The the we've commit there, offers potential

that a coming is of we're out though, position, Our severe downturn.

We have a sustainable upside ahead of us here.

rates. We have inflation high

go also uncertainty to in costs So with to outlined of some there's continuing we're the are what rig up. a the be further you're And about seeing tightening rates market years. going

not So our been for to choice contract out. it's years multiple actually

producers lot years. in lock to love the on would beyond a the cost X of think certainty I

until we going know and support. to unwilling we're be will the what market costs to So are the so do what this at time

Scott Sparks

a We've cadence had quite good right now.

the We have just the our the -- X visibility. China North we're Sea SHX of Petrobras into Q We've the as the taking 'XX, on spot X signed for said. to units and the And the up taken Mexico then years. We very market for we contracted have areas QX, and Gulf in do areas. years. SHX good work seeing

agreements tie to want longer-term rates into don't we at this at ourselves So time. lower

Unidentified Analyst

the around just Yes. renewables. there's is i.e., I related No, that did the the one always North position I'm the guess a a I realizing be robotics, And and seasonality in have of absolutely. then the amount quick wondering going Sea. trenching fair to to what

less that stuff become we projects maybe Asia. Should work to in did do I some we We're guess States, start i.e., doing seasonal? in As business in further United field, the and Egypt.

Owen Kratz

really going of is demand go seasonal another in being we now the where Alliance seasonal. Well, the through limited we through years, year. exception -- worked of it a if then heavy seasonal. season assets due weather to to and We through here usually We the period going heavy the be lift dozen back the was like years, North Gulf And less year the becoming looks about historically, seasonal. Sea seasonal. where to went went Mexico isn't Gulf worked definitely period into you a it's XXX to returned In of days high the lift a Mexico, less it is we're -- Helix with it

not reason, just commercial -- a will that So remain technical that's being seasonal. a reason. that's that's And

safely seasonal. We that be just Australia Brazil, Brazil. year go it's less out In seasonality thing. is a in long. can't round You there And

Scott Sparks

Our there market, the we're up But Asia, Taiwan to you of the I winter provide I'd that become East such we pieces in months the the seasonal at, that And such the on bad the Coast East find survey sort market. trenching, there's will renewables seasonal, be weather Sea U.S. Coast, the they're say for in months. months, as winter North you'll from clearance. so aspects seasonal. on that and renewables a site will focus good going work winter And obviously, we're happen apart heavy very think get very doesn't on as of work U.S.

Operator

Next of question from line the Crist. Don

Donald Crist

Has about market. to sooner really work did I you you talked the Alliance And start to urgency changed wanted when you any? billion get later? than of an that backlog the water that know I market P&A can the overall operators implied transaction, dollars. about rather in with had multiple the talk shallow done of

Owen Kratz

I like disagree The written XX there's don't size the Yes. believe number of would I we the that. not that have the market been something analysts has with changed. next over a market on $X of billion know That that being years.

a strong demand. We are seeing

are we having now. requirements right market capacity fact, the all in of meeting demand trouble and In the the

the the are way. coming majors these them highly being motivated U.S., to of -- way. on to Gulf intent be who go, as this Mexico, the the far of regulators properties the also the As out out them recipients back work get of to entities of very the regulatory seem the get are

So I X over the don't years. next of the X slacking see demand any or

government in decommissioning the form Now North PRT The the of little for credit there is a market. is abandonment agreed. Sea on bit the that over cost was a paying the basically for different of on hope the tax XX%

the in. bodies never been decommissioning know push not the U.K. to right greatest state is done. news, get you in with as now As the the coming administration new the following There's hard been -- the regulatory from you a have U.K. in

some the see infrastructure if let's production With from and more not war, Ukraine get U.K. remove any back EU the crisis and on. the the has energy can pivot in the to let's we been

are think In over of to -- without Pacific believe So any we're market, remove there to the would sort New for Zealand a working essentially uncertain bankruptcy. them I return major through regulatory the without market the field government that the -- decommissioning push. Asia I is regulators now right

getting the returned Because bankruptcy occurrences very Northern on you intent [indiscernible] to the those that and Australian there up field the are the had gas decommissioning. bankruptcy bodies very, side, caught of on On regulatory oil government. the

see you'll foreseeable think for future. I continuing that So the

Donald Crist

touch on the or all two X of is the on Can Is kind months number one, out getting of that just last on And worse? Number to in inflation, I How better inflation side? you're so? it seeing now appreciate color kind you two, efforts taking over different what of panned are all kind I things. topical areas. the labor. right or mitigate what labor

Scott Sparks

going labor. business. all oil and gas and segments got lot the to We've people talk has of oil the the a the in of of industry side I'll the to renewable industry renewable from Labor space. become tight definitely

accommodate. has offshore say, that labor to tight. So a the position, something time. But got it's managed salaries but We've and our I'd and our all monitor we stable in regions prices as increased our to guys keep But well. all doubt, no labor increasing and And tight. increase the to likewise, clients is all our revenues to we segments, seeing are cost we're our

Erik Staffeldt

Yes.

I think, to fixed our just a debt balance Don, our add is essentially rate. sheet from perspective,

the we're rates. from I rising protected well there think So

in XX overall, here equipment need in the to last with I we've vessels. fairly chain, that we think the constraints aggressive for as, make our supply that have been months parts to far like As the sure inflation you service said, we

And labor And during -- on to to being think rates then as increase pressure is market able in we continue. protect seeing this attempting so how I think I mentioned, are and there. that Scotty will our the time we're

Operator

of next line question Our from the is Smith. David

David Smith

the and XX% the increased midpoint. at by I to improved circle abandonment year struck close to the water full back Congratulations outlook. strong of on was I the quarter revenue to guidance segment. the wanted shallow

of was cadence to are sort assets in informed you're your hands? now guidance the activity? of that So prior wanted higher those customer pre-acquisition whether seeing the ask any if if of And by -- indications I interest

Owen Kratz

heavily we the think bit pre-acquisition I probably we owned a guidance original operated we gave outlook until say by conservative. I'd and was it, were actually our influenced it

last demand to recent but you the sort months increase demand hasn't abandonment ramp-up over of in that is in continues it to I'd the the demand XX up. shallow actually of though, demand thing that the market and second relatively us, note, surprised it's water The ramp-up has XX that occurrence. well, ramp is actually the been see The the --

Scott Sparks

water Gulf take letting that the We're in of operators the market best in that and out from shallow them forcing the in offer Mexico not attack assets. they're the decommissioning, these deepwater the and they're definitely seeing to

that's as an led to So uptick in demand well.

David Smith

in I you're fair the that seeing end higher range? the your bias outlook EBITDA appreciate think it that of the what for Is toward second segment that of to $XX million color. might this half to 'XX year million $XX

Erik Staffeldt

what based I we're a seeing. on assessment fair think that's

Owen Kratz

ramp You all want is also to the been a thrust was now? meet to don't owner up I the about they've fantastic doing being any the on team think doing of of But demand detract and them. so. is due job trying I asked think of that whether it not being would to from to or the Helix Alliance Alliance at effort I that -- like

Helix back but place, doing the of has set impose, it's we've that for, how the at requirement. along the I but impose are quickly majors in the processes the requirement up for have surprised helped And pleasantly -- -- very majors. And programs, they're able rationales lot think is that of fact is think reverting one to a adopting by fantastic the Alliance for or the that this other into a acquisition a meet of The job bit it a to that contractors already would are we higher these more. them shelf shelf take qualifications, have I contractors think those so struggle safety properties was same and that. longer on I lot a not the hands everything though at and cetera, -- the the typically processes not et been

is think there I in So, Helix's ownership value Alliance. of

David Smith

last day, hurricane major a One question, a for to the I MSA is a without in small back contractor if may. a with helping. Yes. get tough

relative for DNA assets? see to comments your you meeting appetite And for trouble asset your price to speak you your having how to up Alliance? back opportunities about acquisition purchase work. shelf circling Can Just U.S. additional demand to pick

Owen Kratz

the that be necessarily know don't to I assets. bottleneck

more it's think of I constraint. a people

than need for of. has they apprenticeship instance, and we that do more partner, wireline program. personnel, typically more short have same And personnel wireline We've aware reached units, program We enough training literally of an Alliance to constraints. exist. we're they're It's just no Everybody the out our there's not people.

people on And to the focus so are bottleneck. place but opportunities, think the asset acquisition there yes, is I

Operator

the Our Samantha next question of Hoh. from line

Kay Hoh

be seem looks great congrats I with you we're on we a just couple a wanted be well echo the industry ago, Owen, on that just remember I'm looking how versus of what world Brazil. in of short terms contracting vesseled. to And these to well terms strength the really of days demand could like suggested our the of quarters It potentially just lack my wondering the the intervention? the vessels at way could you're quarter. overall for of QXXXX outlook kind in

Owen Kratz

have North Well, in for. the Sea. That vessels of that still we've demand don't leaves that X Asia alluded fact to additional in have Mexico, in the Africa X North probably we'll Sea X Gulf we and an asset West the we'll in and Brazil, have Pacific,

just position. I think that's our

offering what leader intervention think systems. always you'll us is, we do do, on which already -- expand well we're I is to believe, in So try industry I control what see the

not going out going I you're see think be not you don't what -- building vessel. branch tell you'll to to us see we're there. another I So I is can

to add the services we going on incremental to to be for looking So we're provide. already ways

the if would vessel the over couldn't not though, to extremely fallen Just I U.S. market lay a that for on global market, But to to the win. have is basis a ago, me vessel is find in your general, somebody comment a hands you on Jones opportunity a on had year a you and give Act broader vessel tight impossible. told of

So the has have Scotty, demand some just on been amount but of vessels increase may to -- you and staggering.

Scott Sparks

entered because Canyon that but vessels term, for the we of of we have expansion it's the vessels. that's has the and demand into Bordelon Grand to so Yes. access X-year the contracts why increased Vessel the why also hugely Shelia we renewables market, longer charted

also in to we're intervention but clients them an Regarding asset where discussing with around yes, technically, short we're we can get the and of move those XXXX. try well programs, programs and

Kay Hoh

for then seems maybe just the but and we're seasonality's to progression real the terms quarter steeper like And have it's sort seeing? intervention, a track much quick in a rate completely in used well first housekeeping, thrown of like Okay. jump than it off you of

Scott Sparks

Like a a minimal we lot North North a of think Sea. will seasonally the would We're seasonal really I come We're the the said in X complete not of apart Sea. the program vessels that from in both Gulf North in period it's we maintenance Mexico. that from expecting on Sea. to expecting stack vessels the have

two Brazil, So coming both have vessels. will of we vessels dry the do like in in QX, the it's docks XXX down there. but QX be key for say both And active for up we working assets in

Kay Hoh

the of like Brazil announced is sort was seems Brazil. expanding the quarter. for just if started to on It with up last guys I the maybe your ramping to potentially renewables then and Brazil shifting renewables side And have about conversations staying just on offshore side tons projects wondering over have the offerings with side? of just wind you

Scott Sparks

Brazil, Yes. it's about. not Yes, we have. I mean, East. it's Africa just talking Middle is

having Now some have that on even in a down discussions There's expansion But in Mexico. Brazil. we started of huge Gulf going the space.

business. been projects think all like realize X -- are projects the those years of out these projects the announced, to or have that chain you I have X more in supply

Kay Hoh

Okay.

even lots I this Robotics us the -- what just to to don't about So maybe about But time. bit little you call you Can what addition have of the please? a tell boulder know grab it.

Scott Sparks

It's an to that boulder robot underwater grab, down tenth of and and it in site goes the move boulders the wind site up says basically the goes on go clear place. out down. farms the that of It's what picks it for them

bulk So the that to be clearance need in turbines wind and the farm foundations to of site to clearance power the relating site cables themselves the removed. the relation out go the to wind

Kay Hoh

a a it that's robot vessel? Is on

Scott Sparks

that to It's sits our an a has arms huge of grabbing boulders. vessels and off one effectively remove the ROV

Owen Kratz

we've it's to multiple which it. In prime very accessing the we've the where relied grabs third-party has contractor shift of grab, to markets, And stepped rising the the demand and because past, Last difficult grab need up year, built been we you now and the our successful. job. own too on in on been we

enabler It's So less new at U.S. not in than as EU having Coast to work. we are the in capital million, as another a it's one to East spread cover to of another the $X a looking adding item. grab an sector. It's put major the but primarily well

Operator

Next question from line the of Dan

Unidentified Analyst

Congrats good quarter a have couple of and of on A positive questions. a couple the questions. outlook. I

First, you XXXX. a guys really positive laid for out outlook

top Alliance now Are right think negative in the for good talked You the the you about to there any being a $XX about time is to end million. to $XX of are? XXXX? at business as Or be million just offsets

Owen Kratz

time in to it's the right business I'd a good be say now.

rapidly my past, Of seen you we're how mindful in we've mentioned geopolitical can have you things always And I and color events. comments, inflation, the about course, have in decline.

worry years the to from that to but clamoring we'll of now the never that what of So year the extent X marketplace, multiple and the to have lack good. position that. here But think we really that I'm seeing we're have for commitments in watch supply we exposed nothing with our make another right about X I to sure clients

Unidentified Analyst

know dividends using going priorities, capital to pay growth shareholder off converts that save the think opportunities? particular, about the and then of flow, to in want buybacks generate versus organic longer-term you free just you're you talk cash Can I with return, 'XX. And to you Perfect. versus to allocation the outlook, cash how --

Owen Kratz

you to the value led think for shareholders. be I have the greatest creates what by

to growth. have allocation So deployment capital you when your -- capital

share the cash basically you build. have dividend or have repurchase, the have You you a

So you options. have four

have I and a multiple makes the add cash for question free sustainable value. more the that and And multiples one longer-term personally of to to at have at to capital have which a in as can one value guide cash for as growth. trading we're if deploying trading we the shareholder we're flow. builds we I of It be to is, create accretiveness? cash kind for return look sort the look flow than a also the greatest available has you which return accretive what a So best? and better then risk growth has then shareholders. to for sustainable the That's is that's going that then -- Where manner leverage ultimately that the

now, market the of really to at where harder the capital tail become deploy just and cusp is of right in expectations strong think opportunity we're pricing where going rise. forward I going to as end probably demand a the the market harder

is depending of making incremental cash right converts. a sort accretive So flow share what market now, the multiple think rapid deployments I'm towards cash is growth, eliminate levered you debt the there a determining per for of to that for free sustainability, very the outlook get cash capital and then goes with replenishes cash the ahead also on nothing course, about that's that a to that the of on for repayment that decision. some the but amount big, share because the of amount we leaning of term, you Longer and I of decision and you do And how much conclusion Or permanent at look Board dividend. you you to would think to need have be start debt? to can carry? certain start repurchase if And

Operator

have no the on phone questions we further line. And

Erik Staffeldt

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

Operator

please for and to lines. you participation That your We disconnect call. you concludes thank your ask today's

Brent Arriaga	CAO & Corporate Controller
Kenneth Neikirk	SVP, General Counsel & Corporate Secretary
Owen Kratz	President, CEO & Director
Scott Sparks	EVP & COO
Erik Staffeldt	EVP & CFO
James Schumm	Cowen and Company
Donald Crist	Johnson Rice & Company
David Smith	Pickering Energy Partners Insights
Kay Hoh	Evercore ISI

Helix Energy Solutions (HLX) 25 Oct 222022 Q3 Earnings call transcript