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» Helix Energy Solutions Group's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Hopefully, you have had an opportunity to review our press release and the related slide presentation released last night. If you do not have a copy of these materials, both can be accessed through the Investor Relations page on our website at www.helixesg.com. The press release can be accessed under the press releases’ tab and the slide presentation can be accessed by clicking on today's webcast icon.Before we begin our prepared remarks, Alisa Johnson will make a statement regarding forward-looking information. Alisa? Alisa B. Johnson Thank you. During this conference call, we anticipate making certain projections and forward-looking statements based on our current expectations. All statements in this conference call or in the associated presentation other than statements of historical facts are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual future results may differ materially from our projections and forward-looking statements due to a number and variety of factors, including those set forth in our Slide 2 and in our Annual Report on Form 10-K for the year ended December 31, 2011. Also during this call, certain non-GAAP financial disclosures maybe made. In accordance with SEC rules, the final slides of our presentation materials provide a reconciliation of certain GAAP measures to comparable GAAP financial measures. The reconciliation, along with this presentation, the earnings press release, our annual report, and a replay of this broadcast are available on our website. I will now turn this over for some opening remarks to Tony Tripodo? Anthony Tripodo Yes. Owen, did you want to take slide 5 or you want me to start on slide 5? Owen E. Kratz I am here now Tony, I will go ahead. We are moving on to slide 5 which is the high-level summary of second quarter results. Quarter two’s revenues decreased from $408 million in Q1 to $347 million this quarter with most of the decrease attributable to the Q4000 and the Seawell being out of service for a good part of the quarter as they underwent the regulatory dry docks as well as lower oil and gas revenues resulting from lower production levels. Both dry docks ran longer than we had planned, and consistent with the decrease revenues we also reported lower earnings and operating cash flow. Nevertheless, given the fact that our two historically best contributing assets the Q4000 and the Seawell experienced a lot of non-revenue producing base, we still managed to generate $152 million of EBITDA.
On the slide 6 and 7, Quarter two’s reported EPS is $0.42, which is inclusive of absorbing $15 million of impairment charges or $0.09 after tax associated with the decision to cold stack our oldest pipe lay vessel, the Intrepid. The Intrepid was due to for its regulatory dry dock in April and based on the lack of contract visibility in the amount of expenditures that we projected would be required by the regulatory dry dock, we determined that it was better economic decision to cold stuck the vessel. The Intrepid has not really contributed anything to the bottom line for us lately. Canyon, our robotics business unit, as well as our subsea construction continue to put up good numbers in the second quarter. The Express, our other real pipe lay vessel made a nice contribution to our results in Q2 from a Subsea construction project offshore Israel.Our oil and gas production in the second quarter totaled 1.7 million barrels of oil equivalent, down from 2 million barrels of oil equivalent in Q1. Quarter two’s production declined was impacted by a prolonged shutdown of our South Marsh Island 130 deal for repairs as well as natural declines. We continue to benefit from our oil production being sold at Louisiana light sweet prices, which is at a significant premium to the West Texas intermediate prices, realizing $107 plus a barrel net of our oil hedge contracts. In addition, natural gas liquid production along with our natural gas hedge contracts allowed us to realize $5.76 for our natural gas production in Q1. Additionally, we are very pleased to report last week that success from drilling the Danny II well. Johnny will speak to that later. Tony? Read the rest of this transcript for free on seekingalpha.com