USA: Helix Releases Third Quarter Results

Helix Energy Solutions Group, Inc. reported net income of $46.0 million, or $0.43 per diluted share, for the third quarter of 2011 compared with net income of $26.2 million, or $0.25 per diluted share, for the same period in 2010, and net income of $41.3 million, or $0.39 per diluted share, in the second quarter of 2011.

Net income for the nine months ended September 30, 2011 was $113.2 million, or $1.06 per diluted share, compared with a net loss of $77.3 million, or $(0.74) per diluted share, for the nine months ended September 30, 2010.

Owen Kratz, President and Chief Executive Officer of Helix, stated, “Helix delivered another strong quarter as our Contracting Services segment continues to improve, with near full utilization of all three of our well intervention vessels and our two reeled pipelay vessels. In addition, utilization in our Robotics business continued to improve even as we added two new ROV units to the fleet. Our Oil and Gas business performed very well despite some production disruptions associated with pipeline issues and tropical storm activity. Helix generated healthy cash flow from operations during the quarter, and also paid down an additional $75 million of gross debt via the repurchase of a portion of our senior unsecured notes. I am pleased to announce that we are increasing our EBITDAX guidance for the remainder of 2011 given our current market visibility.”

Contracting Services

* Subsea Construction and Robotics revenues increased in the third quarter of 2011 compared to the second quarter of 2011 primarily due to increased utilization of the Express and Intrepid in the Gulf of Mexico, and increased ROV and trencher utilization in Robotics business. Overall their utilization rate for their owned and chartered vessels increased to 86% in the third quarter of 2011 from 71% in the second quarter of 2011. ROV and trenching utilization increased to 67% in the third quarter of 2011 compared to 54% in the second quarter of 2011.

* Well Intervention revenues increased in the third quarter of 2011 due primarily to increased utilization of their vessels in both the North Sea and the Gulf of Mexico. Vessel utilization in the North Sea increased to 98% in the third quarter of 2011 from 87% in the second quarter of 2011. Vessel utilization in the Gulf of Mexico increased to 100% in the third quarter of 2011 from 93% in the second quarter of 2011. On a combined basis, vessel utilization increased to 99% in the third quarter of 2011 compared to 89% in the second quarter of 2011.

Production Facilities

* The Helix Producer I continued its deployment on the Phoenix field throughout the third quarter of 2011.

Oil and Gas

* Oil and Gas revenues decreased in the third quarter of 2011 compared to the second quarter of 2011 due primarily to lower oil and gas production and slightly lower commodity prices. Production in the third quarter of 2011 totaled 11.7 Bcfe compared to 12.7 Bcfe in the second quarter of 2011.

* The average price realized for oil, including the effects of settled oil hedge contracts, totaled $100.93 per barrel in the third quarter of 2011 compared to $101.43 per barrel in the second quarter of 2011. For natural gas and natural gas liquids, including the effect of settled natural gas hedge contracts, they realized $6.15 per thousand cubic feet of gas (Mcf) in the third quarter of 2011 compared to $6.17 per Mcf in the second quarter of 2011.

* They recorded a charge of approximately $8.4 million to insurance expense in the third quarter of 2011 to reduce the value of hurricane catastrophic bond to its intrinsic value at September 30, 2011. They will record a $2.0 million charge to insurance expense in the fourth quarter of 2011.

* Their October 2011 oil and gas production rate has averaged approximately 128 million cubic feet of natural gas equivalent per day (MMcfe/d) through October 23, 2011, compared to an average of 127 MMcfe/d in the third quarter of 2011 and an average of 139 MMcfe/d in the second quarter of 2011. Production from the Phoenix field was impacted for a portion of July due to scheduled downtime of a third party pipeline servicing the field, and was impacted for a portion of August due to third party pipeline flow restrictions. September production was impacted by third party pipeline safety shutdowns associated with Tropical Storm Lee.

* They currently have oil and gas hedge contracts in place totaling 6.6 Bcfe (0.7 million barrels of oil and 2.1 Bcf of gas) for the remainder of 2011 (October through December), 22.6 Bcfe (2.8 million barrels of oil and 6.0 Bcf of gas) in 2012 and 6.0 Bcfe (1.0 million barrels of oil) in 2013.

More info: Helix

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Source: Helix, October 25 , 2011