8-K
HELIX ENERGY SOLUTIONS GROUP INC (HLX)
8-K
2022-09-06
For: 2022-09-06
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 6, 2022
HELIX ENERGY SOLUTIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
| Minnesota | 001-32936 | 95-3409686 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS. Employer Identification No.) |
| 3505 West Sam Houston Parkway North | | |
| Suite 400 | | |
| Houston , Texas | | 77043 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: 281 - 618-0400
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | |
|---|---|---|---|---|
| Title of each class | **** | Trading Symbol(s) | **** | Name of each exchange on which registered |
| Common Stock | | HLX | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01. Regulation FD Disclosure.
Helix Energy Solutions Group, Inc. (the “Company”) is furnishing this report to disclose an updated Company presentation to be used, or the basis of which will be used, in communications with investors as well as at investor conferences. The presentation materials are attached hereto as Exhibit 99.1 and incorporated by reference herein. The presentation materials are also available on the “For the Investor” page of the Company’s website, www.helixesg.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| | | |
|---|---|---|
| Exhibit<br>Number | Description | |
| 99.1 | | Materials to be used in communications and at conferences. |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: September 6, 2022 | | ||
|---|---|---|---|
| | | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| | | | |
| | By: | /s/ Erik Staffeldt | |
| | | | Erik Staffeldt |
| | | | Executive Vice President and<br>Chief Financial Officer |
Exhibit 99.1
| SEPTEMBER 2022<br>Helix Energy<br>Solutions<br>Company Update | ||
|---|---|---|
| Referencesinthispresentationto“our”or“Helix”meansHelixEnergySolutionsGroup,Inc.,togetherwithoursubsidiaries.Referencesin<br>thispresentationto“Alliance”meansHelixAllianceDecom,LLC,awholly-ownedsubsidiaryofHelix.Thispresentationcontainsforward-<br>lookingstatementsthatinvolverisks,uncertaintiesandassumptionsthatcouldcauseourresultstodiffermateriallyfromthoseexpressedor<br>impliedbysuchforward-lookingstatements.Allstatements,otherthanstatementsofhistoricalfact,are“forward-lookingstatements”within<br>themeaningofthePrivateSecuritiesLitigationReformActof1995,including,withoutlimitation,anystatementsregardingtheCOVID-19<br>pandemicandoilpricevolatilityandtheirrespectiveeffectsandresults,ourprotocolsandplans,ourcurrentworkcontinuing,thespot<br>market,ourabilitytoidentify,effect,andintegrateacquisitions,jointventuresorothertransactions,includingtheintegrationoftheAlliance<br>acquisition;anystatementsregardingtheThunderHawktransaction;ourspendingandcostreductionplansandourabilitytomanage<br>changes;ourstrategy;anystatementsregardingvisibilityandfutureutilization;anyprojectionsoffinancialitemsincludingprojectionsasto<br>guidanceandotheroutlookinformation;anystatementsregardingfutureoperationsexpenditures;anystatementsregardingourplans,<br>strategiesandobjectivesforfutureoperations;anystatementsregardingourabilitytoenterinto,renewand/orperformcommercial<br>contracts;anystatementsconcerningdevelopments;anystatementsregardingourenvironmental,socialandgovernance(“ESG”)<br>initiatives;anystatementsregardingfutureeconomicconditionsorperformance;anystatementsofexpectationorbelief;andany<br>statementsofassumptionsunderlyinganyoftheforegoing.Forward-lookingstatementsaresubjecttoanumberofknownandunknown<br>risks,uncertaintiesandotherfactorsthatcouldcauseresultstodiffermateriallyfromthoseintheforward-lookingstatements,includingbut<br>notlimitedtotheresultsandeffectsoftheCOVID-19pandemicandactionsbygovernments,customers,suppliersandpartnerswithrespect<br>thereto;marketconditions;resultsfromacquiredproperties;demandforourservices;theperformanceofcontractsbysuppliers,customers<br>andpartners;actionsbygovernmentalandregulatoryauthorities;operatinghazardsanddelays,whichincludedelaysindelivery,chartering<br>orcustomeracceptanceofassetsortermsoftheiracceptance;ourabilitytosecureandrealizebacklog;theeffectivenessofourESG<br>initiativesanddisclosures;humancapitalmanagementissues;complexitiesofglobalpoliticalandeconomicdevelopments;geologicrisks;<br>volatilityofoilandgaspricesandotherrisksdescribedfromtimetotimeinourreportsfiledwiththeSecuritiesandExchangeCommission<br>(“SEC”),includingourmostrecentlyfiledAnnualReportonForm10-KandinourotherfilingswiththeSEC,whichareavailablefreeof<br>chargeontheSEC’swebsiteatwww.sec.gov.Weassumenoobligationanddonotintendtoupdatetheseforward-lookingstatements,<br>whichspeakonlyasoftheirrespectivedates,exceptasrequiredbylaw.<br>FORWARD-LOOKING STATEMENTS<br>2 | ||
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| Helix Energy Solutions<br>provides specialty services to the offshore energy industry<br>with a focus on well intervention and robotics operations. Our services are centered<br>toward and well positioned to facilitate global energy transition by maximizing<br>production of remaining oil and gas reserves, decommissioning end-of-life oil and gas<br>fields, and supporting renewable energy developments<br>•Oil & Gas services cover the lifecycle of a field and are critical to maximizing<br>production<br>economics and safely decommissioning end-of-life wells and<br>infrastructure<br>•Expanding Renewables services where we currently offer trenching, site<br>clearance, and subsea support<br>•Expansion into full-field shallow water<br>decommissioning<br>in the Gulf of Mexico<br>with the Alliance acquisition on July 1, 2022<br>Four reportable business segments: Well Intervention, Robotics, Production Facilities<br>and Helix Alliance<br>Liquidity<br>1<br>of $321 million, net debt<br>2<br>of $4 million and contract backlog of $552 million<br>as of June 30, 2022<br>Subsea Services Alliance with Schlumberger provides integrated equipment and<br>services for subsea well intervention<br>HELIX COMPANY OVERVIEW<br>7<br>4<br>40<br>10<br>5<br>5<br>Well Intervention<br>Vessels<br>Seven dedicated well<br>intervention vessels<br>ROV Support<br>Vessels<br>Four ROV support vessels<br>on term charters<br>Remotely Operated<br>Vehicles (ROV)<br>40 work class ROVs<br>1<br>Liquidity is calculated as the sum of cash and cash equivalents plus available capacity under the Company’s ABL<br>facility excludes restricted cash, if any; does not reflect the Alliance acquisition that closed July 1, 2022<br>2<br>Net debt is calculated as long-term debt, including current maturities of long-term debt, less cash and cash<br>equivalents and restricted cash<br>3<br>Based on the twelve months ended December 31, 2021; Percentages exclude eliminations<br>4<br>As of June 30, 2022<br>5<br>Helix Alliance revenue will be included for periods beginning July 1, 2022<br>Revenue<br>Well Intervention<br>Robotics<br>Production Facilities<br>Helix Alliance<br>5<br>1,522 Helix employees worldwide primarily operating in the Gulf of<br>Mexico, Brazil, North Sea, Asia Pacific and West Africa regions<br>667 Helix Alliance employees in the Gulf of Mexico<br>Intervention<br>Systems<br>Six intervention riser<br>systems, three subsea<br>intervention lubricators,<br>and one riserless<br>openwater abandonment<br>module<br>Robotics Assets<br>Four trenching systems<br>and one ROVDrill system<br>Regional Offices<br>Houston, Texas, USA (HQ)<br>Aberdeen, United Kingdom<br>Rio de Janeiro, Brazil<br>Singapore<br>Houma, Louisiana<br>$675<br>million<br>61%<br>29%<br>10%<br>Global Operations<br>4<br>Business Mix<br>3<br>3<br>21<br>Helix Alliance Vessels<br>Ten liftboats, six OSV’s,<br>three diving vessels, one heavy<br>lift barge and one crew boat<br>26<br>Helix Alliance Systems<br>20 P&A systems and<br>six coiled tubing systems | ||
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| HELIX COMPANY OVERVIEW<br>4<br>•World's leading provider of both well<br>intervention and subsea robotics technologies<br>to offshore energy industry<br>•Pioneer and established leading provider of<br>well intervention solutions with a competitive<br>advantage<br>•Track record of 1,610 subsea wells<br>1<br>and over<br>30 years of global experience<br>•Large and growing addressable market in both<br>well intervention (including production<br>enhancement and decommissioning) and<br>robotics<br>•Industry-leading, built-for-purpose fleet that<br>can be mobilized worldwide<br>•Experienced and highly skilled workforce<br>•Strong robotics franchise with deepwater ROV<br>track record in oil & gas, renewable energy,<br>subsea mining, and specialty services that<br>spans over 25 years<br>•Strong culture of innovation, with best-in-class<br>operations and technology portfolio<br>•Core Health, Safety and Environment (HSE)<br>values with proven track record<br>•Comprehensive array of solutions offered via<br>strategic alliance with Schlumberger<br>•Our core offerings represent sustainable<br>solutions, and our ability to help our customers<br>achieve ESG successes provides long-term<br>value to Helix shareholders<br>1<br>Does not include Helix Alliance | ||
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| ENERGY TRANSITION<br>The three legs to our model establish Helix as a meaningful<br>Energy Transition company with significant potential:<br>Maximizing<br>Remaining Reserves<br>Abandonment<br>and<br>Decommissioning<br>Offshore<br>Renewables and<br>Wind Farms<br>Maximizing Remaining Reserves<br>•<br>Production Enhancement<br>–continue assisting oil and<br>gas producers maximize the recovery of existing fields,<br>mitigating need for new drilling, using our methodologies<br>and purpose-built assets<br>•<br>Alternative solutions<br>–extending end-of-life fields prior to<br>our provision of abandonment solutions<br>Abandonment and Decommissioning<br>•Historical success as full-field abandonment contractor<br>•Expansion into Gulf of Mexico shallow water full-field<br>abandonment with Alliance acquisition in 2022<br>•Believe regulators’ renewed push for accelerated plug and<br>abandonment (P&A) will accelerate growth of<br>abandonment<br>Offshore Renewables and Wind Farms<br>•Cable trenching and site preparation services, with<br>opportunities to expand<br>•Ability to offer further specialty support services and<br>geographic expansion<br>5 | ||
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| •Market leader in Well Intervention and Robotics/Trenching<br>•Riser-based and riserless intervention capabilities<br>•Increasing contribution of offshore Renewables market<br>•Expansion into the Gulf of Mexico shallow water<br>decommissioning market<br>•Geographically diverse scope of operations<br>•Diverse customer base including large concentration of blue-chip<br>customers<br>•Purpose-built, advanced Well Intervention fleet<br>•Integrated offerings<br>•Healthy balance sheet and good liquidity position<br>•Extended well life via intervention defers cessation of production<br>and P&A spend<br>•P&A is regulatory driven; demand expected to increase over time<br>•Demand for a more cost-effective solution to rigs<br>•Robotics is essential for credible quality performance in deep-<br>water operations<br>•Expanding Renewables market<br>WHY CHOOSE HELIX?<br>6 | ||
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| SUSTAINABILITY<br>We continue to implement and improve Environmental, Social and Governance (“ESG”) initiatives<br>and disclosures throughout our business.<br>We incorporate ESG initiatives into our core business values and priorities of safety, sustainability and value creation witha top-<br>down approach led by management and our Board of Directors. Our Board and management are committed to implementing and<br>improving ESG initiatives throughout our business.<br>Our most recent version of our Corporate Sustainability Report (available<br>here<br>) significantly expands our disclosures and<br>transparency related to our operational, environmental, safety performance and human capital metrics and details the composition<br>of our workforce and discloses our Scope 1, Scope 2 and Scope 3 greenhouse gas (“GHG”) metrics for 2019 and 2020, including<br>target GHG reductions.<br>Our Corporate Sustainability Report reflects our commitment to transition to a more sustainable future and continue the discussion<br>regarding ESG in current and future disclosures, all of which we believe further creates value for our investors, customers and<br>employees.<br>7 | ||
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| ENVIRONMENTAL, SOCIAL AND GOVERNANCE<br>Environmental<br>•Our business supports both the responsible transition from a carbon-<br>based economy and extending the value and therefore the life cycle of<br>underutilized wells, which in turn helps clients avoid drilling new wells.<br>These efforts are published in greater detail in our Corporate<br>Sustainability Report, a copy of which is available on our website at<br>www.helixesg.com/about-helix/our-company/corporate-sustainability<br>Social<br>•Investment in our human capital is a priority at Helix. When hiring<br>employees, we strive to create value in the communities in which we<br>operate by looking for local talent first<br>Governance<br>•Our Board defines diversity expansively and has determined that it is<br>desirable for the Board to have diverse viewpoints, professional<br>experiences, backgrounds (including gender, race, ethnicity and<br>educational backgrounds) and skills, with the principal qualification of a<br>director being the ability to act effectively on behalf of Company<br>shareholders.<br>•Our Board has been significantly refreshed over the past three years,<br>adding three new members<br>•Our Board’s Corporate Governance and Nominating Committee<br>oversees, assesses and reviews our ESG strategy, including with<br>respect to climate change<br>8 | ||
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| Helix Well Ops<br>is a leader in rigless offshore well<br>intervention, providing fast, flexible and high-quality well<br>management services<br>Our purpose-built riserless and riser-based well<br>intervention vessels and subsea systems operate<br>worldwide to provide customer value throughout the well<br>life cycle<br>Low operating costs and ability to mobilize quickly enables<br>Helix’s vessels to operate at costs lower than offshore<br>drilling rigs that provide intervention services<br>WELL INTERVENTION<br>Business Mix<br>1<br>Revenue<br>1<br>Based on the twelve months ended December 31, 2021; Percentages exclude eliminations and other<br>2<br>Helix Alliance revenue will be included for periods beginning July 1, 2022<br>$517<br>million<br>0%<br>9<br>61%<br>Well Intervention<br>Robotics<br>Production Facilities<br>Helix Alliance<br>2 | ||
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| •Fleet of seven purpose-built well intervention vessels<br>•Both riser-based and riserless intervention systems<br>•1,610 subsea well intervention<br>1<br>operations performed<br>worldwide, includes production enhancement and<br>abandonment operations<br>•598 well abandonment<br>1<br>operations performed worldwide<br>•Geographically diverse scope of operations<br>•Large concentration of blue-chip customers<br>•Able to offer fully integrated intervention services<br>through our Subsea Services Alliance with<br>Schlumberger<br>WHAT SETS HELIX APART IN WELL INTERVENTION<br>10<br>1<br>Does not include Helix Alliance | ||
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| HELIX WELL INTERVENTION VESSELS & ASSETS<br>Q4000<br>(Gulf of Mexico)<br>Dynamically positioned class 3 (“DP3”)<br>purpose-built semisubmersible vessel for<br>well intervention, decommissioning and<br>other subsea projects<br>Q5000<br>(Gulf of Mexico)<br>DP3 purpose-built semisubmersible vessel<br>for well intervention, decommissioning and<br>other subsea projects<br>Q7000<br>(West Africa / Asia Pacific)<br>DP3 purpose-built semisubmersible vessel<br>for well intervention, decommissioning and<br>other subsea projects<br>Siem Helix 1<br>&<br>Siem Helix 2<br>(Brazil)<br>DP3 purpose-built well intervention vessels capable<br>of completing a wide range of subsea projects<br>Under charter agreements through February 2025<br>(SH1) and February 2027 (SH2)<br>Seawell<br>(North Sea)<br>Dynamically positioned class 2<br>(“DP2”) light well intervention and<br>saturation diving vessel<br>Well Enhancer<br>(North Sea)<br>DP3 custom designed well<br>intervention and saturation diving<br>vessel<br>Intervention Riser Systems<br>Utilized for wireline intervention,<br>production logging, coiled-tubing<br>operations, well stimulation and full P&A<br>operations<br>Subsea Intervention Lubricators<br>Enable efficient and cost-effective riserless<br>intervention or abandonment solutions for all<br>subsea wells up to 1,500m water depth<br>11 | ||
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| Subsea Services Alliance created in 2015 to combine<br>the expertise and capabilities of Helix and<br>Schlumberger<br>Comprehensive subsea well construction, intervention and<br>decommissioning portfolio<br>o<br>Helix provides marine support, operational expertise and<br>project management capabilities<br>o<br>Schlumberger provides intervention and completion running<br>technologies and subsea production systems (through<br>OneSubsea)<br>INTEGRATED APPROACH TO SUBSEA WELL SERVICES<br>•Utilizes vessels that can handle well commissioning, intervention, artificial lift and abandonment<br>services<br>o<br>Eliminates the need for costly offshore drilling rigs for support<br>•Ongoing development of technologies that provide efficient products and services for the<br>offshore market<br>•Deep-and ultra-deepwater basins<br>•High-pressure, high-temperature environments<br>•Novel subsea well access, remediation and intervention for subsea production and processing<br>•Complementary project managers with extensive experience to provide operational efficiency<br>•A single source of expertise, services and technologies provides for simpler and more cost-<br>effective subsea well intervention services while maximizing project safety<br>12 | ||
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| Helix Robotics Solutions<br>is a leading supplier of subsea<br>engineering services, operating state of the art remote operated<br>vehicles (ROVs), seabed trenchers and support/construction<br>vessels<br>Our deep-water ROV track record spans over 25 years, including<br>oil & gas, renewable energy, construction services and specialty<br>services projects executed successfully around the world<br>•Helix has a meaningful market share of the global ROV<br>market, including the growing renewable energy industry<br>•Helix charters vessels to support deployment of robotics assets<br>and engages spot vessels on short-term charter agreements<br>as needed<br>HELIX ROBOTICS<br>Business Mix<br>1<br>Revenue<br>$137<br>million<br>1<br>Based on the twelve months ended December 31, 2021; Percentages exclude eliminations and other<br>2<br>Helix Alliance revenue will be included for periods beginning July 1, 2022<br>13<br>29%<br>Well Intervention<br>Robotics<br>Production Facilities<br>Helix Alliance<br>2 | ||
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| Grand Canyon II<br>(Asia Pacific)<br>A versatile and technically advanced DP3 multi-role<br>construction support vessel<br>Under charter agreement through December 2027<br>Grand Canyon III<br>(North Sea)<br>A versatile and technically advanced DP3 multi-<br>role construction support vessel<br>Under charter agreement through May 2028<br>Shelia Bordelon<br>(Gulf of Mexico)<br>A Jones Act Compliant DP2 ultra-light intervention<br>vessel perfect<br>Under charter agreement through June 2024<br>HELIX ROBOTICS VESSELS & ASSETS<br>ROV Fleet (40 units)<br>Highly maneuverable underwater robots that are<br>capable of performing a broad array of subsea<br>construction and well intervention tasks<br>Subsea Trenchers (4 units)<br>Provide subsea power cable, umbilical,<br>pipeline and flowline trenching in water<br>depths up to 3,000 meters<br>ROVDrill<br>Fully automated seabed operated drilling<br>module capable of carrying out a range of<br>drilling, sampling and in SITU tests<br>Horizon Enabler<br>(North Sea)<br>DP2 multi-purpose ROV and light construction<br>vessel for projects in both the offshore Renewables<br>and oil and gas sectors<br>Under flexible charter agreement through<br>December 2023<br>14 | ||
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| •A fleet of advanced work-class ROVs and trenchers, including several units custom built to our<br>specifications<br>•Our subsea expertise in robotics is applicable to both the Oil and Gas and Renewables markets<br>1<br>•Leading provider for water jetting and mechanical cutting trenching solutions and ROV support for<br>offshore oil and gas and wind farm development<br>•Continued expansion of Renewables offerings<br>•Helix charters its ROV support vessels, ensuring a modern fleet that can expand and contract<br>based on regional requirements and market conditions<br>WHAT SETS HELIX APART IN ROBOTICS<br>Renewable<br>Energy<br>Specialty<br>Services<br>Construction<br>Services<br>Oil & Gas<br>1<br>Revenue from Renewables projects made up approximately 45% and 23% of Robotics revenues during first half of 2022 and full year 2021, respectively<br>15 | ||
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| Helix Alliance<br>is a leading supplier of full-field<br>decommissioning services to the Gulf of Mexico shelf<br>Owned-fleet of Jones Act support vessels and equipment<br>including liftboats, P&A spreads, OSVs, coiled tubing spreads,<br>diving vessels and a heavy lift barge<br>In addition to decommissioning, services include project<br>management, engineered solutions, intervention, maintenance,<br>repair, heavy lift and commercial diving services<br>HELIX ALLIANCE<br>16<br>Well Intervention<br>Robotics<br>Production Facilities<br>Helix Alliance<br>2<br>1<br>Based on the twelve months ended December 31, 2021; Percentages exclude eliminations<br>and other<br>2<br>Helix Alliance revenue will be included for periods beginning July 1, 2022<br>Business Mix<br>1 | ||
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| Liftboats<br>Ten liftboats ranging in size up to 265<br>feet<br>Dive Support Vessels<br>Three dive support vessels<br>P&A Spreads<br>20 P&A Spreads<br>HELIX ALLIANCE VESSELS & ASSETS<br>Offshore Supply Vessels (OSVs)<br>Six OSV’s ranging from 150 feet to 170 feet<br>and one crewboat<br>Heavy Lift Derrick Barge<br>Epic Hedron 1,763-ton derrick barge<br>Coiled Tubing Spreads<br>Six coiled tubing units and<br>one snubbing unit<br>17 | ||
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| Helix Production Facilities<br>includes the<br>Helix Producer 1<br>floating production unit (FPU), which is operating under a<br>production handling contract until at least June 1, 2023<br>The segment also includes the Helix Fast Response System<br>and our ownership of the Gulf of Mexico wells and related<br>infrastructure associated with the Droshky Prospect and our<br>interest in the Thunder Hawk Field, which was acquired August<br>2022<br>HELIX PRODUCTION FACILITIES<br>Revenue<br>$69<br>million<br>18<br>10%<br>1<br>Based on the twelve months ended December 31, 2021; Percentages exclude eliminations and other<br>2<br>Helix Alliance revenue will be included for periods beginning July 1, 2022 and revenue related to our<br>Thunder Hawk interest will be included for periods beginning August 26, 2022<br>Well Intervention<br>Robotics<br>Production Facilities<br>2<br>Helix Alliance<br>2<br>Business Mix<br>1 | ||
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| Key Financial<br>Metrics and<br>Outlook<br>19 | ||
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| DEBT & LIQUIDITY PROFILE<br>($ in millions)<br>Liquidity amounts do not reflect the acquisition of the Alliance group of companies on July 1, 2022<br>1<br>Cash includes cash and cash equivalents but excludes restricted cash at December 31, 2019 and 2021 and June 30, 2022 of $54 million, $74 million and $3 million, respectively<br>2<br>Long-term debt through December 31, 2020 was net of unamortized discounts and issuance costs; beginning January 1, 2021, long-term debt is net of issuance costs only<br>3<br>Liquidity is calculated as the sum of cash and cash equivalents and available capacity under Helix’s $80 million ABL facilityand excludes restricted cash<br>4<br>Net debt is calculated as long-term debt (including current maturities of long-term debt) less cash and cash equivalents and restricted cash<br>$267<br>$279<br>$208<br>$291<br>$254<br>$261<br>$(496)<br>$(440)<br>$(406)<br>$(350)<br>$(305)<br>$(267)<br>$348<br>$426<br>$380<br>$452<br>$305<br>$321<br>$(229)<br>$(161)<br>$(143)<br>$(58)<br>$22<br>$(4)<br>($500)<br>($400)<br>($300)<br>($200)<br>($100)<br>$0<br>$100<br>$200<br>$300<br>$400<br>$500<br>Cash¹<br>Long-term debt²<br> Liquidity³<br>Net debt⁴<br>12/31/17<br>12/31/1812/31/1912/31/2012/31/216/30/22<br>20 | ||
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| DEBT INSTRUMENT PROFILE<br>Total funded debt<br>1<br>of $275 million at 6/30/22<br>•$30 million Convertible Senior Notes due 2023 –4.125%<br>•$200 million Convertible Senior Notes due 2026 –6.75%<br>•$45 million MARAD Debt –4.93%<br>•Semi-annual amortization payments through maturity<br>in Q1 2027<br>$0<br>$50<br>$100<br>$150<br>$200<br>$250<br>202220232024202520262027<br>Principal Payment Schedule at 6/30/22<br>($ in millions)<br>CSN 2023<br>CSN 2026<br>MARAD<br>$4<br>$38<br>1<br>Excludes $8 million of remaining unamortized debt issuance costs<br>$9<br>$210<br>$9<br>$5<br>21 | ||
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| Revenue<br>Free Cash Flow<br>1<br>1<br>Adjusted EBITDA and Free Cash Flow are Non-GAAP financial measures, see non-GAAP<br>reconciliations on slide 32<br>2<br>Helix Alliance revenue will be included for periods beginning July 1, 2022<br>$581<br>$740<br>$752<br>$734<br>$675<br>$30<br>$29<br>$58<br>$22<br>$(62)<br>($80)<br>($60)<br>($40)<br>($20)<br>$0<br>$20<br>$40<br>$60<br>$80<br>$0<br>$200<br>$400<br>$600<br>$800<br>20172018201920202021<br>Revenue<br>Net Income (loss)<br>Net income (loss)<br>Adjusted EBITDA<br>1<br>FIVE YEAR TREND<br>2<br>($ IN MILLIONS)<br>$107<br>$162<br>$180<br>$155<br>$96<br>($169)<br>$60<br>$31<br>$80<br>$132<br>($200)<br>($150)<br>($100)<br>($50)<br>$0<br>$50<br>$100<br>$150<br>$0<br>$25<br>$50<br>$75<br>$100<br>$125<br>$150<br>$175<br>$200<br>20172018201920202021<br>Adjusted EBITDA<br>Free Cash Flow¹<br>22 | ||
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| REVENUE DISPERSION<br>1<br>($ IN MILLIONS)<br>Geography<br>Segments<br>68%<br>74%<br>73%<br>71%<br>74%<br>21%<br>17%<br>19%<br>21%<br>16%<br>11%<br>9%<br>8%<br>8%<br>10%<br>$0<br>$200<br>$400<br>$600<br>$800<br>20172018201920202021<br>Well Intervention<br>Robotics<br>Production Facilities<br>49%<br>37%<br>40%<br>42%<br>34%<br>12%<br>28%<br>29%<br>28%<br>23%<br>27%<br>26%<br>26%<br>18%<br>15%<br>6%<br>19%<br>12%<br>9%<br>5%<br>6%<br>9%<br>$0<br>$200<br>$400<br>$600<br>$800<br>20172018201920202021<br>United States<br>Brazil<br>United Kingdom<br>West Africa<br>Other<br>23<br>1<br>Helix Alliance revenue will be included for periods beginning July 1, 2022 | ||
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| 24<br>2022 OUTLOOK: FORECAST<br>($ in millions)<br>2021<br>Helix Outlook<br>3<br>Helix Alliance<br>4<br>CombinedActual<br>Revenues$ 650 - 725$ 75 - 100$ 725 - 825675<br>$<br>Adjusted EBITDA<br>1<br>70 - 8515 - 2585 - 11096<br><br>Free Cash Flow<br>1<br>(30) - (5)10 - 20(20) - 15132<br><br>Capital Additions<br>2<br>47 - 553 - 550 - 6017<br><br>Revenue Split:<br>Well Intervention$ 460 - 510$ 460 - 510517<br>$<br>Robotics165 - 180165 - 180137<br><br>Production Facilities70 - 8070 - 8069<br><br>Helix Alliance- 75 - 10075 - 100-<br>Eliminations(45)<br> (45)<br> (48)<br><br>Total$ 650 - 725$ 75 - 100$ 725 - 825675<br>$<br>2022<br>1<br>Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See non-GAAP reconciliations on slide 32<br>2<br>2022 Outlook and 2021 Actual include regulatory certification costs for our vessels and systems<br>3<br>Helix Outlook presents the forecast for the Helix legacy businesses for the full year 2022<br>4<br>Helix Alliance presents the forecast for the Alliance group of companies for the period July 1, 2022 (date of acquisition) through December 31,<br>2022 | ||
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| 2022 OUTLOOK –WELL INTERVENTION<br>•<br>Q4000<br>(Gulf of Mexico) –contracted work into Q4 with expected strong utilization during<br>remainder of the year<br>•<br>Q5000<br>(Gulf of Mexico)<br>–<br>contracted work into late Q4 with expected strong utilization during<br>remainder of the year<br>•<br>IRS rental units<br>(Gulf of Mexico) –15K IRS has contracted backlog during Q3 with availability<br>during remainder of the year; 10K IRS available in the spot market with limited visibility<br>•<br>WellEnhancer<br>(North Sea) –contracted work into Q4 with strong utilization expected during<br>remainder of the year<br>•<br>Seawell<br>(North Sea) –contracted work into Q4 with strong utilization expected during remainder<br>of the year<br>•<br>Q7000<br>(West Africa, Asia Pacific)<br>–<br>completed approximate 40-day maintenance period in Namibia<br>in July and returned to Nigeria for one-to-four-well campaign; subsequent planned transit to the<br>Asia Pacific region with an approximate 30-day docking prior to contracted decommissioning<br>campaign offshore New Zealand expected to commence early 2023<br>•<br>Siem Helix 1<br>(Brazil) –contracted ROV survey and IRM work in Brazil into Q4 followed by<br>intervention work on two-year contract expected to commence late Q4 or early Q1 2023<br>•<br>Siem Helix 2<br>(Brazil) –under contract for Petrobras through mid-December<br>25 | ||
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| Robotics<br>•<br>Grand Canyon II<br>(Asia Pacific) –performed ROV support work on windfarm project offshore<br>Taiwan expected through Q3 and expected to have high utilization during remainder of 2022<br>before charter expiration date at end of the year<br>•<br>Grand Canyon III<br>(North Sea) –performing seasonal trenching campaign for several customers<br>through late Q3 with good visibility and strong utilization expected through year end<br>•<br>Renewables site clearance<br>–performing boulder removal project in the North Sea using spot<br>vessels expected through July and pursuing other site clearance projects<br>•<br>Horizon Enabler<br>(North Sea)–commenced trenching project in July in Egypt with expected high<br>utilization through mid-Q4 with visibility for the remainder of the year<br>•<br>Shelia Bordelon<br>(U.S.)<br>–<br>expected high utilization through Q3, including approximately 60 days<br>expected windfarm support work off U.S. East Coast, with follow-on opportunities and good<br>visibility for remainder of the year<br>Production Facilities<br>•Stable ongoing operations on the<br>Helix Producer 1<br>•Higher oil and gas production expected following our acquisition of a 62.5% interest in the<br>Thunder Hawk Field on August 26, 2022<br>2022 OUTLOOK –ROBOTICS AND PRODUCTION FACILITIES<br>26 | ||
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| •<br>Offshore –<br>marine services with diversified fleet consisting of six offshore supply vessels<br>(OSVs), 10 liftboats (ranging in size up to 265 feet) and one crewboat<br>•<br>2022 Outlook –<br>expect stable utilization on seven to nine liftboats and variable seasonal<br>utilization on OSVs and crewboat for balance of 2022<br>•<br>Energy Services –<br>provider of P&A and intervention services for surface infrastructure in coastal<br>and offshore environments; equipment consists of 20 P&A spreads, nine coiled tubing units and<br>one snubbing unit<br>•<br>2022 Outlook –<br>strong utilization for eight to 12 P&A spreads and one to three coiled tubing<br>units expected for balance of 2022<br>•<br>Diving & Heavy Lift –<br>diving services from three diving support vessels and heavy lift solutions<br>from the<br>EPIC Hedron<br>1,763-ton derrick barge<br>•<br>2022 Outlook –<br>seasonal work with good utilization expected in diving services through Q3<br>and heavy lift work expected into Q3<br>2022 OUTLOOK –HELIX ALLIANCE<br>27 | ||
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| 2022 Capital additions are forecasted at approximately $50 -$60 million:<br>•Primarily maintenance capex related to regulatory recertification costs of our vessels and systems<br>•Capital additions during Q2 approximated $11 million and included<br>•Approximately $9 million for regulatory recertification costs, reported in operating cash flows<br>•Approximately $2 million of capital expenditures for new property and equipment<br>•Capital additions for Helix and Alliance for remainder of 2022 expected to be approximately $28 to<br>$38 million<br>•Capital additions for Helix Alliance for remainder of 2022 expected to be $3 to $5 million and<br>consist primarily of maintenance capex<br>Alliance acquisition closed July 1, 2022 for approximately $120 million cash<br>Balance Sheet<br>•Our total funded debt<br>1<br>is expected to decrease by $4 million (from $275 million at June 30, 2022 to<br>$271 million at December 31, 2022) as a result of scheduled principal payments<br>2022 OUTLOOK: CAPITAL ADDITIONS & BALANCE SHEET<br>1<br>Excludes unamortized issuance costs<br>28 | ||
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| •Continue momentum on the three legs of our Energy Transition business model: production maximization,<br>decommissioning and Renewables<br>•Integration of Alliance and full-field abandonment capabilities<br>•Expect to continue anticipated momentum from second half 2022 into 2023<br>•Operating cash flow improvements<br>•Expected improved operating cash flows in 2023 compared to 2022<br>•Maintenance capex anticipated to be approximately $40-$50 million annually<br>•<br>Well Intervention<br>•Focus on continued improved operating performance<br>•Expect continued operations in Brazil and stronger 2023 with two-year Trident award expected to begin late Q4 2022<br>or early Q1 2023<br>•<br>Q7000<br>to continue with planned Asia Pacific campaign in New Zealand and Australia with approximately 200 days<br>contracted<br>•Improving outlook for both utilization and rates in the Gulf of Mexico<br>•Expect continued growth potential in West Africa<br>•Expect tight North Sea intervention market in 2023, offering upward rate and utilization potential<br>•<br>Robotics<br>•Anticipate continued strong Renewables trenching market<br>•Continued Renewables site clearance project opportunities, including in the U.S. market<br>•ROV market tightening<br>•<br>Helix Alliance<br>•Full-year accretion of Alliance earnings in 2023<br>•Expected strong Gulf of Mexico shallow water decommissioning market<br>BEYOND 2022<br>29 | ||
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| •<br>Potential Improvements in 2023<br>1<br>We expect 2023 to be substantially better than 2022, based on the following:<br>•<br>Brazil<br>–Both vessels expected to be working in intervention mode at profitable rates in 2023; expected EBITDA<br>improvement $55 to $65 million in 2023<br>•<br>Q7000<br>–Absence of regulatory inspections and transit in 2023 that will have occurred in 2022; expected EBITDA<br>improvement $17 to $27 million in 2023<br>•<br>Helix Alliance<br>–Full year 2023 EBITDA expected to be $30 to $50 million, an incremental EBITDA benefit of $15<br>to $35 million compared to 2022 outlook<br>•<br>Utilization –<br>Well Intervention increased utilization expected in 2023 compared to 2022, including the<br>Q7000<br>, due<br>to fewer days of regulatory maintenance and transit<br>•<br>Rates<br>–Well Intervention rates expected to be up 30% to 45% for full year 2023 compared to rates at the<br>beginning of 2022<br>•<br>Robotics<br>–Higher utilization and rates expected in 2023<br>•<br>Production Facilities<br>–Expect extension of<br>Helix Producer 1<br>for 2023; higher oil and gas production following<br>Thunder Hawk Field acquisition in August 2022<br>1<br>These potential improvements include key assumptions and estimates. Any significant variation from these key assumptions andestimates could limit<br>our ability to achieve such improvements.<br>BEYOND 2022<br>30 | ||
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| Non-GAAP<br>Reconciliations<br>and<br>Supplemental<br>Information<br>31 | ||
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| NON-GAAP RECONCILIATIONS<br>($ in thousands, unaudited)<br>12/31/201712/31/201812/31/201912/31/202012/31/2021<br>Reconciliation from Net Income (Loss) to Adjusted EBITDA:<br>Net income (loss)30,052<br>$ 28,598<br>$ 57,697<br>$ 20,084<br>$ (61,684)<br>$<br>Adjustments:<br>Income tax provision (benefit)(50,424)<br> 2,400<br> 7,859<br> (18,701)<br> (8,958)<br><br>Net interest expense18,778<br> 13,751<br> 8,333<br> 28,531<br> 23,201<br><br>(Gain) loss on extinguishment of long-term debt397<br> 1,183<br> 18<br> (9,239)<br> 136<br><br>Other (income) expense, net1,434<br> 6,324<br> (1,165)<br> (4,724)<br> 1,490<br><br>Depreciation and amortization108,745<br> 110,522<br> 112,720<br> 133,709<br> 141,514<br><br>Goodwill impairment-<br> -<br> -<br> 6,689<br> -<br><br>Non-cash (gain) loss on equity investment1,800<br> 3,430<br> (1,613)<br> (264)<br> -<br><br>EBITDA110,782<br> 166,208<br> 183,849<br> 156,085<br> 95,699<br><br>Adjustments:<br>(Gain) loss on disposition of assets, net39<br> (146)<br> -<br> (889)<br> 631<br><br>General provision (release) for current expected credit<br>losses-<br> --<br> 746<br> (54)<br><br>Other than temporary loss on note receivable-<br> (1,129)<br> -<br> -<br><br>Realized losses from foreign exchange contracts not<br>designated as hedging instruments(3,605)<br> (3,224)<br> (3,761)<br> (682)<br><br>Adjusted EBITDA107,216<br>$ 161,709<br>$ 180,088<br>$ 155,260<br>$ 96,276<br>$<br>Free Cash Flow:<br>Cash flows from operating activities51,638<br>$ 196,744<br>$ 169,669<br>$ 98,800<br>$ 140,117<br>$<br>Less: Capital expenditures, net of proceeds from sale of assets(221,127)<br> (137,058)<br> (138,304)<br> (19,281)<br> (8,271)<br><br>Free cash flow(169,489)<br>$ 59,686<br>$ 31,365<br>$ 79,519<br>$ 131,846<br>$<br>32 | ||
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| NON-GAAP AND OTHER DEFINITIONS<br>Non-GAAPFinancialMeasures<br>WedefineEBITDAasearningsbeforeincometaxes,netinterestexpense,gainsorlossesonextinguishmentoflong-termdebt,<br>gainsorlossesonequityinvestments,netotherincomeorexpense,anddepreciationandamortizationexpense.Non-cash<br>impairmentlossesongoodwillandotherlong-livedassetsarealsoaddedbackifapplicable.Toarriveatourmeasureof<br>AdjustedEBITDA,weexcludethegainorlossondispositionofassets,acquisitionandintegrationcostsandthegeneral<br>provision(release)forcurrentexpectedcreditlosses,ifany.<br>WedefineFreeCashFlowascashflowsfromoperatingactivitieslesscapitalexpenditures,netofproceedsfromsaleof<br>assets.<br>WeuseEBITDA,AdjustedEBITDAandFreeCashFlowtomonitorandfacilitateinternalevaluationoftheperformanceofour<br>businessoperations,tofacilitateexternalcomparisonofourbusinessresultstothoseofothersinourindustry,toanalyzeand<br>evaluatefinancialandstrategicplanningdecisionsregardingfutureinvestmentsandacquisitions,toplanandevaluateoperating<br>budgets,andincertaincases,toreportourresultstotheholdersofourdebtasrequiredbyourdebtcovenants.Webelievethat<br>ourmeasuresofEBITDA,AdjustedEBITDAandFreeCashFlowprovideusefulinformationtothepublicregardingouroperating<br>performanceandabilitytoservicedebtandfundcapitalexpendituresandmayhelpourinvestorsunderstandandcompareour<br>resultstoothercompaniesthathavedifferentfinancing,capitalandtaxstructures.Othercompaniesmaycalculatetheir<br>measuresofEBITDA,AdjustedEBITDAandFreeCashFlowdifferentlyfromthewaywedo,whichmaylimittheirusefulnessas<br>comparativemeasures.EBITDA,AdjustedEBITDAandFreeCashFlowshouldnotbeconsideredinisolationorasasubstitute<br>for,butinsteadaresupplementalto,incomefromoperations,netincome,cashflowsfromoperatingactivities,orotherincomeor<br>cashflowdatapreparedinaccordancewithGAAP.Usersofthisfinancialinformationshouldconsiderthetypesofeventsand<br>transactionsthatareexcludedfromthesemeasures.<br>33 | ||
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| 1,123<br>3,235<br>1,446<br>1,713<br>1,478<br>1,514<br>0<br>600<br>1,200<br>1,800<br>2,400<br>3,000<br>3,600<br>2020A2021A2022E2023E2024E2025E<br>Oil & Gas<br>•Helix business lines are primarily production<br>focused and activity driven by Upstream OpEx<br>budgets<br>•Current high commodity pricing environment<br>favorable for offshore spending on both<br>enhancement and decommissioning activities<br>Renewable Energy<br>•Robotics segment continues to expand into the<br>Renewables market<br>•Market leading position in Europe for trenching<br>services<br>•Expanded geographic mix into U.S. and Asia<br>Pacific<br>•Expanded services beyond trenching<br>MACRO OUTLOOK SUPPORTS UPSIDE POTENTIAL<br>Global Offshore Deepwater O&G OpEx<br>1<br>($ in billions)<br>Global Offshore Wind Additions<br>2<br>(Turbines / Foundations)<br>1<br>Rystad Energy | Service Demand Cube August 2022<br>2<br>Rystad Energy | Offshore Vessel Analysis Dashboard August 2022<br>53<br>60<br>71<br>80<br>81<br>83<br>$0<br>$20<br>$40<br>$60<br>$80<br>$100<br>2020A2021A2022E2023E2024E2025E<br>34 |
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| DECOMMISSIONING MARKET –NORTH AMERICA<br>North America Decommissioning Market Outlook: 2022-2025<br>35<br>Source: Rystad Energy ServiceCube, SubseaCube, WellCube as of August 2022 | ||
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| DECOMMISSIONING MARKET –GLOBAL<br>Global Decommissioning Market Outlook: 2022-2025<br>36<br>Source: Rystad Energy ServiceCube as of August 2022 | ||
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| Thank you | ||
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