HOUSTON, Dec. 14 /PRNewswire-FirstCall/ -- Helix Energy Solutions
(NYSE: HLX) today announced that following the completion of its annual
budgeting process and the pricing of the Initial Public Offering (IPO) of a
minority stake in its subsidiary - Cal Dive International, Inc. (NYSE:
DVR), it now expects 2007 earnings to be in the range of $3.35 -
$4.75/share. See attached "Key Variable" slide for the general range of
assumptions embedded in the updated and preliminary earnings estimates.
Martin Ferron, President and Chief Executive Officer, of Helix stated,
"Our main strategic objective is to achieve long term sustainable earnings
growth, linked to a superior return on capital. Based on the market
opportunities open to us we have crafted a capital allocation plan that
could generate at least 25% earnings growth in each of the next three
years. For 2007, in particular, we reallocated capital between our
Contracting Services and Oil and Gas business units to take advantage of
recently announced marine asset investment opportunities (e.g. a second
Well Intervention vessel for the North Sea) while achieving a more
measured, lower risk, growth in our oil and gas production.
"Upon the closing of the Cal Dive IPO, we expect to receive net
proceeds of around $345 million which does not include any proceeds from
the potential exercise of the over-allotment option by the underwriters.
These proceeds will allow us the balance sheet capacity to continue
investing in marine assets that have a significant impact on the reduction
of deepwater field finding and development costs, both for external
customers and for our own activities. The IPO should result in a boost to
our Q4/06 earnings of around $1.30/share. Our earnings guidance includes
100% of Cal Dive's estimated earnings. Due to transaction constraints at
this time we cannot give specific guidance with respect to Cal Dive's
earnings assumptions. The mid point of our earnings guidance represents an
approximate 40% increase over current street estimates for 2006. It should
also be noted the primary reason for the reduced upper end of the range
compared to the initial preliminary estimate is lower commodity price
assumptions."
Further details will be provided in a presentation and conference call
on Friday, December 15th at 9:00 AM Central Standard Time. The call will be
webcast live and can be accessed, along with the presentation at the
Investor Relations page of http://www.HelixESG.com . A replay will be
available from the Audio Archives page.
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 and attached presentation 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.
Key Variables
Updated 2007 Preliminary 2007
Estimate
Contracting Services: Low High Low High
Revenues (millions) $1,060 $1,200 $1,000 $1,100
EBITDA Margins (A) 35% 40% 35% 40%
Gross Profit Deferral
(from internal projects -
millions) $25 $20 $15 $10
Production Facilities:
Equity in Earnings (millions) $35 $45 $45 $55
Oil & Gas:
Oil Price (per bbl) $55.00 $65.00 $55.00 $72.64
Natural Gas Price (per mcf) $7.00 $8.00 $6.00 $9.18
Production (BcFe) 85 95 90.5 109.5
LOE (per MCFe) $1.30 $1.20 (B) (B)
DD&A (per MCFe) $2.90 $2.80 (B) (B)
Dry Hole Expense (millions) $35 $30 (B) (B)
Corporate:
SG&A % of Revenue 8% 7% 10% 8%
Effective Tax Rate 35% 34% 35% 34%
Interest Expense (millions) $70 $60 (B) (B)
Average Shares Outstanding
(millions) 96.5 96.5 98 96
Capex (millions):
Contracting Services $435 $580 $225 $450
Oil & Gas $415 $470 $400 $550
(A) See GAAP reconciliation at http://www.HelixESG.com .
(B) No previous guidance disclosed
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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