HOUSTON, Oct. 2 /PRNewswire-FirstCall/ -- Helix Energy Solutions (NYSE:
HLX) today announced that it now expects 2006 earnings to fall in the
revised range of $2.80 to $3.20 per diluted share. See attached "Key
Variables" for the general range of assumptions embedded in the revised and
previous earnings estimates.
Martin Ferron, President and Chief Executive Officer, stated, "The main
reason for the revised guidance is lower production volumes caused by both
third party pipeline shut-ins and production management integration
following the closing of the acquisition of Remington Oil and Gas. These
latter integration issues are now largely behind us. Most of the production
shortfall is due to factors beyond our control as are prevailing spot
commodity prices, which are below the low end of our previous expectations.
"While we are obviously disappointed to reduce our near term earnings
estimates we still expect significant earnings growth in the coming year,
especially as the market for our contracting services continues to improve.
We are deep into our budgeting process and expect to update our 2007
earnings guidance in early December."
Helix Energy Solutions, headquartered in Houston, Texas, is an energy
services company that provides innovative solutions to the oil and gas
industry worldwide for marginal field development, alternative development
plans, field life extension and abandonment, with service lines including
diving services, shelf and deepwater construction, robotics, well
operations, well engineering and subsurface consulting services, platform
ownership and oil and gas production.
FORWARD-LOOKING STATEMENTS
This press release contains 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; any statements regarding the anticipated results
(financial or otherwise) of the merger of Remington Oil and Gas Corporation
into a wholly-owned subsidiary of Helix; 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, with respect to the
Remington merger, actual results could differ materially from Helix's
expectations depending on factors such as the combined company's cost of
capital, the ability of the combined company to identify and implement cost
savings, synergies and efficiencies in the time frame needed to achieve
these expectations, prior contractual commitments of the combined companies
and their ability to terminate these commitments or amend, renegotiate or
settle the same, the combined company's actual capital needs, the absence
of any material incident of property damage or other hazard that could
affect the need to effect capital expenditures, any unforeseen merger or
acquisition opportunities that could affect capital needs, the costs
incurred in implementing synergies and the factors that generally affect
both Helix's and Remington's respective businesses. Actual actions that the
combined company may take may differ from time to time as the combined
company may deem necessary or advisable in the best interest of the
combined company and its shareholders to attempt to achieve the successful
integration of the companies, the synergies needed to make the transaction
a financial success and to react to the economy and the combined company's
market for its exploration and production. We assume no obligation and do
not intend to update these forward-looking statements.
Key Variables
Revised 2006 Previous 2006
Contracting Services: Low High Low High
Revenues (millions) $930 $970 $900 $1,000
EBITDA Margins (A) 36% 40% 35% 40%
Production Facilities:
Equity in Earnings
(millions) $18 $22 $20 $24
Oil & Gas:
Oil Price (per bbl) $55.00 $65.00 $60.00 $70.00
Natural Gas Price
(per mcf) $4.00 $7.00 $5.00 $7.00
Production (BcFe) 52 55 57 62.5
Dry Hole Expense
(millions) $42 $35 $35 $25
Corporate:
SG&A % of Revenue 9% 8% 9% 8%
Effective Tax Rate 35% 34% 35% 34%
Average Shares
Outstanding (millions) 91 90 91 90
(A) See GAAP reconciliation at http://www.HelixESG.com .
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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