HOUSTON, Feb. 26 /PRNewswire-FirstCall/ -- Helix Energy Solutions
Group, Inc. (NYSE: HLX) today announced an update on drilling activity at
its 100% owned "NOONAN" prospect on Garden Banks Block 506, located
approximately 145 miles offshore from Galveston, Texas in 2,700 feet of
water. Since operations commenced in October, we have completed the
drilling of an exploratory well and two appraisal sidetracks. Formation
evaluation from wireline logs, pressure analysis, and sidewall cores,
acquired late last week, have successfully delineated our reservoir for
completion of the well.
While it is still premature to finalize a reserve estimate, sufficient
pay was encountered to point to reserve potential of at least 100 bcfe.
Development plans being screened include a fast track subsea tie-back to
selected infrastructure located in shallower water. First production should
be achieved in the second half of 2008.
Martin Ferron, President and Chief Executive Officer of Helix, stated,
"We are obviously very pleased to have made a commercial discovery with the
first prospect drilled from the deepwater inventory acquired as part of the
Remington Oil and Gas transaction last year. This demonstrates the
considerable potential value of our deepwater resources, especially since
we have over twenty high quality prospects left to drill and the highly
skilled personnel necessary to identify and secure more prospects in the
future.
"The drilling of the deepwater prospect inventory, particularly with
the Q4000, should create significant production returns and provide
incremental contracting backlog to supplement an already buoyant medium
term deepwater service outlook. All of the development work for Noonan will
be performed using Helix assets and services and we estimate that this work
will generate around $100 million of revenue at market rates.
"As stated in our recent earnings guidance conference call, this
deepwater success is not factored into our projected growth rates for 2008
and beyond. Also we may sell up to 50% of our interest to cover development
costs and provide cash for possible debt reduction and/or stock repurchase.
This would also allow us to recognize the profit on the related services
work as it is performed with respect to the share owned by the partner. Our
share will be recognized through reduced DD&A charges over the production
life of the field."
Helix Energy Solutions, headquartered in Houston, Texas, is an
international offshore energy company that provides development solutions
and other key life of field services to the open energy market as well as
to our own oil and gas business unit. That business unit is a prospect
generation, exploration, development and production entity. Employing our
own key services and methodologies, we seek to lower finding and
development costs, relative to industry norms.
FORWARD-LOOKING STATEMENTS
This press release contain forward-looking statements that involve
risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking
statements. All statements, other than statements of historical fact, are
statements that could be deemed "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including,
without limitation, any projections of revenue, gross margin, expenses,
earnings or losses from operations, or other financial items; future
production volumes, results of exploration, exploitation, development,
acquisition and operations expenditures, and prospective reserve levels of
property or wells; any statements of the plans, strategies and objectives
of management for future operations; any statement concerning developments,
performance or industry rankings relating to services; any statements
regarding future economic conditions or performance; any statements of
expectation or belief; and any statements of assumptions underlying any of
the foregoing. The risks, uncertainties and assumptions referred to above
include the performance of contracts by suppliers, customers and partners;
employee management issues; complexities of global political and economic
developments, geologic risks 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 ending
December 31, 2005 and subsequent quarterly reports on Form 10-Q. We assume
no obligation and do not intend to update these forward-looking statements.
SOURCE Helix Energy Solutions Group, Inc.
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Related links:
http://www.HelixESG.com
CONTACT:
Wade Pursell, Chief Financial Officer of
Helix Energy Solutions Group, Inc., +1-281-618-0400, or fax,
+1-281-618-0505
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