Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Howard Weil Conference 2007
40 slides from Helix Energy Solutions's conference presentation, Apr 2, 2007
Slide 1: Howard Weil, New Orleans, April 4, 2007
Howard Weil New Orleans, Louisiana April 4, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 statements that could be deemed
Slide 3: Presentation Outline
Helix Strategy Contracting Services Oil & Gas Financial Information Appendix Presentation Outline H E L I X E N E R G Y S O L U T I O N S
Slide 4: Helix Strategy
Helix Strategy H E L I X E N E R G Y S O L U T I O N S
Slide 5: Two Stranded Strategy
Two Stranded Strategy Reservoir & Well Tech Services Drilling Production Facilities Construction Well Ops External Market Internal Market = Reduced Cyclicality Steady Growth And Superior Financial Returns 'Marginal' Field Focus Niche Assets & Services Lower Life Cycle Costs Backlog At Market Rates O
Slide 6: Near Term Strategic Initiatives
Near Term Strategic Initiatives H E L I X E N E R G Y S O L U T I O N S Key Steps Grow Earnings by at least 25% Per Year for next three years, maintaining debt within manageable levels1 Continue to Add Capacity to Key Contracting Services Generate Prospects and Focus Exploration Drilling on: Low Ris
Slide 7: Contracting Services
Contracting Services H E L I X E N E R G Y S O L U T I O N S
Slide 8: Contracting Services: Focus on Exploitation Cost Reductions
H E L I X E N E R G Y S O L U T I O N S Drilling/Completion Production Facilities Construction Well Ops Key Assets Q4000 Mobile Production Units Intrepid Express Caesar ROVs Q4000 Seawell ROVs Value Creating Methodologies Slimbore Wells Re- Deployment of Floater Pipe Burial Non Drill Rig Interventio
Slide 9: Organic Growth via Service Asset Additions
Organic Growth via Service Asset Additions Reservoir Technology Drilling/Completion Drilling/Completion Production Facilities Construction Well Ops Current Assets 160 + Engineers Q4000 Q4000 Marco Polo (50%) Pipelay Intrepid Express Q4000 Seawell Mobile SIL Independence Hub (20%) Independence Hub (2
Slide 10: Oil & Gas
Oil & Gas H E L I X E N E R G Y S O L U T I O N S
Slide 11: Reserve Profile
Reserve Profile 2002 2003 2004 2005 2006 Helix 157 150 116 225 536 Remington 2004 2005 2006 2007 Helix 41 35 52 90 Remington 2002 2003 2004 2005 2006 Proved Developed 0.43 0.5 0.64 0.45 0.44 Proved Undeveloped 0.57 0.5 0.36 0.55 0.56 2002 2003 2004 2005 2006 Oil 0.46 0.5 0.54 0.4 0.41 Gas 0.54 0.5 0
Slide 12: Oil & Gas: Focus on Marginal Fields
Oil & Gas: Focus on Marginal Fields Mature Properties (Shallow Water) Mature Properties (Deepwater) H E L I X E N E R G Y S O L U T I O N S Marginal Development (Deepwater) Camelot Acquisition in North Sea : : : Phoenix Acquisition in Gulf of Mexico Drilling/Development of Noonan in Gulf of Mexico '
Slide 13: Strategy in Action: Mature Properties (Shallow Water) Camelot Field
Strategy in Action: Mature Properties (Shallow Water) Camelot Field H E L I X E N E R G Y S O L U T I O N S Mature property no longer wanted by major operator Value will be unlocked by rejuvenation of existing production and tie back of nearby PUD reserves. Important first North Sea transaction.
Slide 14: Strategy in Action: Deepwater Developments Noonan Field
H E L I X E N E R G Y S O L U T I O N S Low risk, mid water drilling prospect generated in-house. Discovery of at least 100 Bcfe announced in February/07 Field close to existing infrastructure and therefore can be developed cheaply and quickly. F&D cost < $2.00 Mcfe. First Production within 18 month
Slide 15: Prospect Portfolio
H E L I X E N E R G Y S O L U T I O N S Bottom-up reserve risk assessment based on historical success rates. 5-7 year drilling inventory. Prospect Portfolio1 1 As acquired with Remington Oil & Gas. Based on July, 2006 Investor Presentation. 2 F & D cost of $2.50 / Mcfe used throughout. 3 Over $1 Bil
Slide 16: Exploration Report Card
NOONAN 100% W.I. Exploration Report Card (since 7/1/06) West Cameron 342 100 % W.I. Eugene Island 391 60%W.I. S. Marsh Island 80 2 wells, 60% W.I. South Timbalier 145 75% W.I. Main Pass 211 50% W.I. 14 /16 Exploratory Wells Drilled Were Discoveries (7/06-3/07) Est. Discovered Reserves: >115 Bcfe Pro
Slide 17: Financial Information
H E L I X E N E R G Y S O L U T I O N S Financial Information
Slide 18: Consistent Top Line Growth
Consistent Top Line Growth 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Contracting Services 63.9 93.9 139 128 110 164 240 259 300 500 936 1100 Oil & Gas 12.2 16.5 12.6 32.5 70.8 63.4 62.8 137.3 243 272 430 750 33% CAGR Revenues in Millions H E L I X E N E R G Y S O L U T I O N S * Es
Slide 19: Bottom Line
Bottom Line 2003 2004 2005 2006 2007 32.8 79.9 150 253 287 128 Net Income in Millions Range H E L I X E N E R G Y S O L U T I O N S Estimate * 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead costs during the year. *
Slide 20: Significant Cash Generation
Significant Cash Generation 2003 2004 2005 2006 2007 Contracting Services 37 53 159 323 600 Oil & Gas 90 186 194 342 460 EBITDAX in Millions (see GAAP reconciliation at www.HelixESG.com) Estimate * * Estimates reflect mid-point of guidance range ** 2006 results exclude the impact of the gain on sale
Slide 21: Return on Capital Invested
2002 2003 2004 2005 2006 5 7 13 17 15 Return on Capital Invested 5 7 13 17 15 Percentage (see calculation at Company's website - www.HelixESG.com) H E L I X E N E R G Y S O L U T I O N S * 2006 results exclude the impact of the gain on sale in the Cal Dive IPO and estimated incremental overhead cost
Slide 22: Net Debt to Book Capitalization
MARAD Other Long Term Debt Term B Facility (Amounts in Millions) 12/31/06 12/31/05 12/31/04 Net Debt To Book Capitalization 22% 40% 38% Convertible Notes H E L I X E N E R G Y S O L U T I O N S Cal Dive Revolver
Slide 23: 2007 CAPEX Program
($MM) Contracting Services 2007 Comments Drilling $60 Q4000 Upgrade, H4500 Study Production Facilities 120 Helix Producer I, Shiraz Construction 190 Caesar, ROVs, Plencher Well Operations 90 Well Enhancer Maintenance CAPEX 80 Total Contracting Services $540 Oil & Gas Exploration $200 Low Risk Shelf
Slide 24: Helix Energy Solutions
Helix Energy Solutions
Slide 25: Structure / Resources
Q4000 Seawell Well Enhancer SEA SIL Structure / Resources Structure / Resources Contracting Services Marco Polo 50% Ind. Hub 20% Gunnison Helix Producer I Shiraz Cal Dive Well Operations Drilling Reservoir & Well Tech Serv 4 DP DSVs 4 Sat DSVs 15 Diving Vessels 3 Pipelay Vessels Oil & Gas Production
Slide 26: Oil & Gas
Oil & Gas H E L I X E N E R G Y S O L U T I O N S
Slide 27: Helix Hedges - As Of March 31, 2007
Helix Hedges - As Of March 31, 2007 H E L I X E N E R G Y S O L U T I O N S
Slide 28: Contracting Services
Contracting Services H E L I X E N E R G Y S O L U T I O N S
Slide 29: Services - Reservoir and Well Technology
Services - Reservoir and Well Technology CoreTeams(tm) - outsourced integrated reservoir management and well technology capabilities OnDemand(tm) - consultancy services Pulse(tm) - online analysis of upstream data FaultFinder(tm) - high definition analysis of faulting FlowDoctor(tm) - flow assurance
Slide 30: Services - Drilling and Completion
Casing/Riser Water Depth TD BML Hole Size 9 5/8" = 8500 ft 12000 ft 43/4" 13 3/8" = 6000 ft 14000 ft 6 / 8 1/2" 16" = 4000 ft 16000 ft 6 / 8 1/2" 13 5/8" surface BOP 13 5/8" Sub sea shut off and disconnect device Combination of proven surface BOP and slimhole D&C technology Modular packages Preserve
Slide 31: Services - Production Facilities
Marco Polo TLP (50% interest) Located in 4,300 ft. in Green Canyon Block 608 Capacity: 120,000 Bopd 300 MMcfd Host facility for Marco Polo K2 K2 North (2005) Genghis Khan (2006) Independence Hub (20% interest) To be Located in 8,000 ft. in Mississippi Canyon Block 920 Capacity: 1000 MMcfd Host for 1
Slide 32: Services - Construction
Technically diverse DP Fleet Reel Lay and S-Lay Specialized Assets Target Niche Markets Awarded $150 million contract for a project in Indian waters during Q4. Sat and Surface Diving Construction and abandonment Inspection, repair and maintenance Partial IPO of Cal Dive completed in Q4/06. Current 7
Slide 33: Services - Well Operations
Life of field services Recognized industry leader Alternative to drill rig 25% - 50% cost advantage Riser based technology Market growing rapidly with tree deployments Established position in largest world market Property sales to Independents SIL based technology Signed 4 year $250 MM well interven
Slide 34: Organic Growth Capital Projects (Services) -1
Organic Growth Capital Projects (Services) -1 Budget ($MM) 84 42 138 140 160 Est. Completion Q1/2007 Q4/2007 Q4/2007 Q3/2008 4Q/2008 Comments Mechanical completion occurred in Q1/07 Production expected to start by Q3/07 Drilling system to be added during scheduled dry docking in Q3/07 Vessel in Tran
Slide 35: Organic Growth Capital Projects (Services) -2
Organic Growth Capital Projects (Services) -2 Budget (US$MM) 29 - Ph 1 375-Complete 2 - Purchase 4 16 16 Est. Completion Q2/2007 (Ph I) Q1/2007 Q2/2007 Q1/2008 Q4/2007 Comments Long lead items have been purchased. Detailed design and model testing completed. Firm prices from shipyards being solicite
Slide 36: 2007 Earnings Guidance Themes: Contracting Services
2007 Earnings Guidance Themes Contracting Services Introduction of Caesar in Q4 Pricing escalation, especially in the in deepwater and well intervention segments Avoidance of unplanned downtime for Q4000 and commencement of drilling program in 2H, after 75 day regulatory drydock Continuation of inte
Slide 37: 2007 Earnings Guidance Themes: Oil & Gas
2007 Earnings Guidance Themes Oil & Gas H E L I X E N E R G Y S O L U T I O N S Production growth to at least 85 Bcfe mainly through PDNP and PUD conversion. The split of production volume between 1H/07 and 2H/07 is likely to be around 40%/60%. Commencement of production from first North Sea field-C
Slide 38: 2008 Growth Drivers
Full year of contribution from Caesar Introduction of Well Enhancer in Q4 Introduction of Helix Producer I in Q3 Further international expansion by Cal Dive Production growth to > 105 Bcfe with start up of Phoenix field in Q3, and Bass Lite in Q4 First production from Noonan, Bishop? Upside? Full ye
Slide 39: 2009 and Beyond
Full year of contribution from Well Enhancer and Helix Producer I. Introduction of H4500 - next generation Q4000 (subject to Board approval in 1H/07). Full year of production from Phoenix field should drive overall production to > 120 Bcfe. Deepwater drilling portfolio upside. 2009 and Beyond H E L
Slide 40: We Are 'Exporting' Our Business Model
Houston Aberdeen Houston Aberdeen Singapore Houston Dallas Aberdeen Houston Port Arthur New Iberia Lafayette Rotterdam London Aberdeen Kuala Lumpur Perth H E L I X E N E R G Y S O L U T I O N S We Are 'Exporting' Our Business Model
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