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| 8-K - HELIX ENERGY SOLUTIONS GROUP, INC. FORM 8K 3-5-10 - HELIX ENERGY SOLUTIONS GROUP INC | form8k.htm |
Changing the way you
succeed.
Raymond
James
31st Annual Institutional
Investors Conference
March
9, 2010
Changing the way you
succeed.
Forward-Looking
Statements
2
This
presentation contains forward-looking statements within the meaning of Section
27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995, including, without limitation, any projections of financial items; future production volumes, results of exploration,
exploitation, development, acquisition and operations expenditures, and prospective reserve levels of properties or
wells; any statements of the plans, strategies and objectives of management for future operations; any statements
concerning developments, performance or industry rankings; and any statements of assumptions underlying any of
the foregoing. These statements involve certain assumptions we made based on our experience and perception of
historical trends, current conditions, expected future developments and other factors we believe are reasonable and
appropriate under the circumstances. The forward-looking statements are subject to a number of known and
unknown risks, uncertainties and other factors that could cause our actual results to differ materially. The risks,
uncertainties and assumptions referred to above include the performance of contracts by suppliers, customers and
partners; employee management issues; uncertainties inherent in the exploration for and development of oil and gas
and in estimating reserves; complexities of global political and economic developments; geologic risks, volatility of oil
and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange
Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
You should not place undue reliance on these forward-looking statements which speak only as of the date of this
presentation. We assume no obligation or duty and do not intend to update these forward-looking statements except
as required by the securities laws.
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995, including, without limitation, any projections of financial items; future production volumes, results of exploration,
exploitation, development, acquisition and operations expenditures, and prospective reserve levels of properties or
wells; any statements of the plans, strategies and objectives of management for future operations; any statements
concerning developments, performance or industry rankings; and any statements of assumptions underlying any of
the foregoing. These statements involve certain assumptions we made based on our experience and perception of
historical trends, current conditions, expected future developments and other factors we believe are reasonable and
appropriate under the circumstances. The forward-looking statements are subject to a number of known and
unknown risks, uncertainties and other factors that could cause our actual results to differ materially. The risks,
uncertainties and assumptions referred to above include the performance of contracts by suppliers, customers and
partners; employee management issues; uncertainties inherent in the exploration for and development of oil and gas
and in estimating reserves; complexities of global political and economic developments; geologic risks, volatility of oil
and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange
Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
You should not place undue reliance on these forward-looking statements which speak only as of the date of this
presentation. We assume no obligation or duty and do not intend to update these forward-looking statements except
as required by the securities laws.
References
to quantities of oil or gas may include amounts we believe will ultimately be
produced, but that are not
classified as “proved reserves” under SEC definitions. Statements of oil and gas reserves are estimates based on
assumptions and may be imprecise. Investors are urged to consider closely the disclosure regarding reserves in our
2009 Form 10-K.
classified as “proved reserves” under SEC definitions. Statements of oil and gas reserves are estimates based on
assumptions and may be imprecise. Investors are urged to consider closely the disclosure regarding reserves in our
2009 Form 10-K.
Changing the way you
succeed.
Historical
Profile
• Deepwater subsea
contracting
• Deepwater well
intervention
•
Robotics
• Oil and
gas
•
Deepwater
•
Shelf
•
Offshore production facilities
•
Shelf contracting (Cal Dive)
•
Reservoir evaluation and consulting
The
Future
• Deepwater
contracting services
• Well
Intervention
•
Robotics
• Subsea
Construction
• Deepwater oil and
gas
• Minimize
exploration capex
and risk
and risk
•
Offshore production facilities
The
result: A
company focused on
deepwater activities and a conservative balance sheet
deepwater activities and a conservative balance sheet
Helix
ESG: Transforming the Business Model
3
Changing the way you
succeed.
4
Global
CAPEX Growth Forecast
Source:
Quest Offshore Resources Subsea Database, February 2010
US$26.6bn
US$80.2bn
201%
Increase
Changing the way you
succeed.
Production
Facilities
Marco Polo
TLP (50%)
Independence
Hub Semi (20%)
Helix
Producer I (~82%) (2010)
Subsea
Construction
Construction
Pipelay
Intrepid
Express
Intrepid
Express
Caesar- new
to fleet
ROV
40 ROVs
2 ROV Drill Units
6 Chartered Vessels
40 ROVs
2 ROV Drill Units
6 Chartered Vessels
5 Trenchers
(200 - 2000hp)
Well
Intervention
Q4000
Seawell
Well
Enhancer
Normand
Clough (JV)
Mobile
VDS/SILs
Helix
Oil & Gas
GOM shelf and
deepwater
PV-10 $1.3
billion @
12/31/2009 (SEC pricing)
12/31/2009 (SEC pricing)
Proved
reserves = 578 bcfe
(12/31/2009)
(12/31/2009)
2010
projected production
50-60 bcfe
50-60 bcfe
Helix
ESG Business Segments
5
Changing the way you
succeed.
Services
For Each Stage of the Field Life Cycle
6
Changing the way you
succeed.
MODU
DP3 Q4000
MSV
DP3 Well
Enhancer
Helix
provides well operation and decommissioning services with the Seawell
riserless well
intervention vessel, the flagship Q4000 semisubmersible, the Well Enhancer wireline / slickline /
coiled tubing intervention vessel, and the Normand Clough (JV) with our Subsea Intervention
Lubricator and Vessel Deployment systems.
intervention vessel, the flagship Q4000 semisubmersible, the Well Enhancer wireline / slickline /
coiled tubing intervention vessel, and the Normand Clough (JV) with our Subsea Intervention
Lubricator and Vessel Deployment systems.
MSV
DP2 Normand
Clough
MSV
DP2 Seawell
Well
Intervention Assets
7
Changing the way you
succeed.
DP
Reel Lay Vessel
Express
Express
DP
S-Lay Vessel
Caesar
Caesar
DP
Reel Lay Vessel
Intrepid
Intrepid
Caesar’s onboard
pipe welding and testing
capability allows the vessel to lay virtually
unlimited lengths of pipe up to 36” in diameter.
capability allows the vessel to lay virtually
unlimited lengths of pipe up to 36” in diameter.
Helix’s
flagship pipelay and subsea construction
vessel has established an extensive track record
of field installation projects around the world.
vessel has established an extensive track record
of field installation projects around the world.
Intrepid has the
flexibility to be deployed as a
pipelay, installation or saturation diving vessel.
pipelay, installation or saturation diving vessel.
Subsea
Construction Vessels
8
Changing the way you
succeed.
Contracting
Services Facilities
Ingleside, Texas
shore base facility
– Pipe stalk length
5,230 feet
– Onsite subsea
component fabrication
– 300’ x 700’slip can
accommodate two
Helix Subsea Construction vessels side
by side
Helix Subsea Construction vessels side
by side
– Constructed Helix’s
Danny 36-mile
8 x 12-inch pipe-in-pipe, including
jumpers and manifolds
8 x 12-inch pipe-in-pipe, including
jumpers and manifolds
Aerial
view of Ingleside Shore Base
Helix
Danny pipe-in-pipe welding
On-site
fabrication capabilities
9
Changing the way you
succeed.
Helix
is an industry leading provider of ROV and subsea trenching services
to deepwater operators worldwide.
to deepwater operators worldwide.
The
Helix ROV fleet consists
of 40 vehicles, covering the
spectrum of deepwater
construction services.
of 40 vehicles, covering the
spectrum of deepwater
construction services.
The 600
hp Supertrencher II
system is designed to
operate at water depths in
excess of 6,500 feet.
system is designed to
operate at water depths in
excess of 6,500 feet.
The
state of the art I-Trencher
system trenches, lays pipe up
to 16” in diameter, and backfills
in a single operation.
system trenches, lays pipe up
to 16” in diameter, and backfills
in a single operation.
Helix
ROV Systems
10
Changing the way you
succeed.
Island
Pioneer
Olympic
Triton
Olympic
Canyon
Seacor
Canyon
Normand
Fortress
Chartered
support vessels allows Helix to adjust the size and capability of its
fleet to cost-effectively meet industry demands.
fleet to cost-effectively meet industry demands.
ROV/Construction
Support Vessel Fleet
11
Normand
Clough
as part of CloughHelix JV
as part of CloughHelix JV
Changing the way you
succeed.
• Vessel is
mechanically complete; commissioning and USCG acceptance are well
advanced
• Sea trials scheduled
March 2010
• DTS buoy installed
on location by Q4000
• Expect deployment in
Phoenix field in Q2 2010
Helix
Producer I FPU
12
Changing the way you
succeed.
Oil
& Gas
13
Changing the way you
succeed.
Helix
Oil and Gas
14
12/31/2009 Reserve
Profile:
• 578
Bcfe
• ≈ 60% Deepwater
GOM
• ≈ 40% proved
developed
• ≈30%
Oil
• PV-10 $1.3 billion
(SEC)
• PV-10 $2.7 billion
(forward strip price)
Production
Profile:
• Current production
of 145 mmcfe/d*
• 45% of production is
oil
• >50% of
production is deepwater, and growing
New
2010 Production (net)
• Danny oil- 5,000
boe/d
• Noonan- 30 mmcfe/d,
increasing to 50+ mmcfe/d
• Phoenix- >10,000
boe/d
* As of
2/25/2010
Changing the way you
succeed.
Oil
and Gas Deepwater Profile
15
• Internal Prospect
Generation via Large,
In-House 3-D Seismic Library
In-House 3-D Seismic Library
• Large, Recent Long
Offset 3-D Seismic
Database,+1,500 Blocks
Database,+1,500 Blocks
• Experienced
Exploration/Drilling/Operations
Team - 25+ years avg.
Team - 25+ years avg.
• 22 Defined
Prospects, Helix is operator of 21
• 2.3 TCFE Net
Un-Risked Reserve Potential,
>800 BCFE Net Risked
>800 BCFE Net Risked
• Majority of
Prospects, if successful, are Sub
Sea Tie-Backs
Sea Tie-Backs
• Multiple, low risk
prospects on or near
existing Helix operated infrastructure
existing Helix operated infrastructure
Helix Oil and Gas
specializes in prospect
generation, acquisition, exploration, development
and production, employing its own key services
and methodologies and working to lower finding
and development costs relative to industry norms.
generation, acquisition, exploration, development
and production, employing its own key services
and methodologies and working to lower finding
and development costs relative to industry norms.
Changing the way you
succeed.
Caesar
departing
for sea trials, Nantong, China
16
2010
Outlook
Changing the way you
succeed.
2010
Outlook
17
• Contracting Services
demand in 1H 2010 will continue to be soft, with a rebound
anticipated in 2H 2010
anticipated in 2H 2010
• Contracting Services
asset utilization on Danny oil pipeline and Phoenix field
development will continue to impact financial results in Q1
development will continue to impact financial results in Q1
• Capital expenditures
of approximately $200 million planned for 2010
• $85 million relates
to completion of major vessel projects
• Oil and Gas capital
expenditures of approximately $86 million, excluding P&A of
approximately $61 million
approximately $61 million
• Improved liquidity
and debt levels (see slide 21)
•Expect to reduce net
debt levels further by 12/31/2010
•Expect to increase
liquidity further by 12/31/2010
Changing the way you
succeed.
2010
Outlook
18
|
Broad
Metrics
|
2010
Higher End
|
2010
Lower End
|
2009
|
|
Production
Range
|
60
Bcfe
|
50
Bcfe
|
44
Bcfe
|
|
EBITDA
|
$550
million
|
$450
million
|
$490
million
|
|
CAPEX
|
$200
million
|
$200
million
|
$328 million
(A)
|
|
Commodity
Price
Deck |
2010
Higher End
|
2010
Lower End
|
2009
(B)
|
|
|
Hedged
|
Oil
|
$74.75 /
bbl
|
$74.59 /
bbl
|
$67.11 /
bbl
|
|
Gas
|
$5.87 /
mcf
|
$6.00 /
mcf
|
$7.75 /
mcf
|
|
(A) Inclusive of
capitalized interest of $48 million.
(B) Including effect
of settled
natural gas hedge contracts.
Changing the way you
succeed.
2010
Outlook
19
|
Key
Oil and Gas
Assumptions |
Production
Rates
|
||
|
2010 Higher
End
|
2010 Lower
End
|
2009
|
|
|
Noonan
gas
(well performance) |
55
Mmcfe/d
by March 1, 2010 |
35
Mmcfe/d
all year |
20
Mmcfe/d
|
|
Phoenix
expected
start-up |
Mid-
Q2
>70
Mmcfe/d
|
Mid-year
>70 Mmcfe/d |
0
|
|
Hurricanes
|
No
Significant
Disruption |
Significant
Disruption
|
Lingering
2008
Hurricane Effects |
Note:
2009 year end reserve estimate reductions for Noonan gas wells to increase
DD&A rates in 2010 vs. prior expectations
Changing the way you
succeed.
Helix
Summary
20
Changing the way you
succeed.
Significant
Balance Sheet Improvements
21
Debt
• Liquidity
of $657 million at 12/31/2009
• Completed
approximately $600 million of non-core asset sales in
2009
Changing the way you
succeed.
Liquidity
and Capital Resources
Credit
Facilities, Commitments and Amortization
– $435
Million Revolving Credit Facility -
UNDRAWN.
• Facility extended to
November 2012.
• In July 2011,
commitments reduced to $410 million.
• $50 million of LCs
in place.
– $415
Million Term Loan B - Committed
facility through June 2013. $4.3
million
principal payments annually.
principal payments annually.
– $550
Million High Yield Notes - Interest only
until maturity (January 2016) or called
by Helix. First Helix call date is January 2012.
by Helix. First Helix call date is January 2012.
– $300
Million Convertible Notes - Interest only
until put by noteholders or called by
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
Helix. First put/call date is December 2012, although noteholders have the right to
convert prior to that date if certain stock price triggers are met ($38.56).
– $119
Million MARAD - Original 25 year
term; matures February 2027. $4.4
million
principal payments annually.
principal payments annually.
22
Changing the way you
succeed.
Financial
Information
23
Express
spooling
pipe at Ingleside Shore Base, Gulf of Mexico
Changing the way you
succeed.
Note:
Excludes Cal Dive and Helix RDS revenues from 2005-2009.
See Non-GAAP reconciliations on slides 28-30.
See Non-GAAP reconciliations on slides 28-30.
($
amounts in millions)
$575
$840
$1,071
$1,337
$1,152
Consistent
Top-Line Growth
24
Changing the way you
succeed.
- 2006
results exclude the impact of
the gain on sale in the Cal Dive IPO
and estimated incremental
overhead costs during the year.
the gain on sale in the Cal Dive IPO
and estimated incremental
overhead costs during the year.
- 2007
results exclude the impact of
the Cal Dive gain, impairments and
other unusual items.
the Cal Dive gain, impairments and
other unusual items.
- 2008 results exclude
non-cash
charges of $964 million for
reduction in carrying values of
goodwill and certain oil and gas
properties.
charges of $964 million for
reduction in carrying values of
goodwill and certain oil and gas
properties.
- 2009 results exclude
the impact of
Cal Dive gains, impairments and
other unusual items.
Cal Dive gains, impairments and
other unusual items.
(a) See
Non-GAAP reconciliations on slides 28-30.
Earnings
Per Share (a)
25
Changing the way you
succeed.
-2006
results exclude the impact
of the gain on sale in the Cal
Dive IPO and estimated
incremental overhead costs
during the year.
of the gain on sale in the Cal
Dive IPO and estimated
incremental overhead costs
during the year.
-2007
results exclude the impact
of the Cal Dive gain,
impairments and other unusual
items.
of the Cal Dive gain,
impairments and other unusual
items.
-2008 results exclude
non-cash
impairments.
impairments.
-2009
results exclude non-cash
impairments and impact of Cal
Dive gains.
impairments and impact of Cal
Dive gains.
(a) See
Non-GAAP reconciliations on slides 28-30.
($
amounts in millions)
$278
$449
$490
$575
$609
Significant
Cash Generation - EBITDAX
26
Changing the way you
succeed.
Non-GAAP
Reconciliations
Reconciliations
27
Changing the way you
succeed.
Non-GAAP
Reconciliations
28
Changing the way you
succeed.
Non-GAAP
Reconciliations
29
Changing the way you
succeed.
Non-GAAP
Reconciliations
30
Changing the way you
succeed.
31