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NEW ASSETS. NEW PRODUCTION. NEW OPPORTUNITIES. 2009 ANNUAL REPORT LETTER TO SHAREHOLDERS 2009 The letter to our Shareholders last year pointed to 2009 as a year As successful as our efforts were on the divestiture front, to better position Helix for refinement, reinvention and ultimate challenges continued with industry conditions. Efforts were growth. It was to be a year to refocus on the company’s core ongoing throughout 2009 to divest the company’s Gulf of strengths and to improve our financial strength while positioning Mexico shelf production assets. However, the soft market and the company for future growth. Key to this were our plans to sell lack of a healthy credit market for potential buyers made it a non-core assets, complete major ongoing capital projects and difficult goal to accomplish. deliver these new assets to the market. The second half of the year was forecast to be soft for our 2009 began with the need to replenish liquidity following Contracting Services business as reduced demand for service the impacts of the 2008 hurricanes and a global economic work usually lags commodity price declines. Indeed, the collapse with the accompanying softening in commodity volume of work fell below even our low expectations. With the prices. During 2009 we focused on cost reductions and capital low volume of construction work available, our construction project spending deferrals while at the same time continued assets were deployed for internal use to develop the necessary our efforts to sell non-core assets. infrastructure for the Danny and Phoenix oil fields. While this validates the concept underlying our hybrid model, it negatively The sale of non-core assets was subject to difficult and impacted profitability for the Contracting Services business as uncertain market conditions. 2009 was not a seller’s market the intercompany profits are required to be eliminated. and we were determined to minimize value loss while at the same time restoring liquidity levels. Despite the unfavorable For our oil and gas business, the third party pipeline servicing market conditions, we succeeded in selling the following: our Noonan gas field that was damaged by Hurricane Ike remained out of service well past the anticipated date for its 1. Several Gulf of Mexico Shelf producing properties. return to service. The Noonan gas field was expected to be 2. Part of our Bass Lite deepwater field. our largest oil and gas producing field in 2009 and therefore 3. Helix RDS – our reservoir consulting services company. key to generating substantial cash flows. The pipeline finally 4. Almost 100% of our remaining interest in Cal Dive, our returned to service in early 2010. shallow water construction business. Looking forward, we have a bit more of the same to come. These efforts allowed the company to build liquidity to close We expect to see a continuing soft Contracting Services to $700 million and reduce debt from a peak of $2.1 billion to market in the early part of 2010. Some of our assets will $1.3 billion. As our financial position improved, we were able continue to be deployed to complete the infrastructure for to restart deferred capital projects and deliver new assets to Danny and Phoenix oil fields. By midyear, we expect all major the market. capital projects to be completed and Danny and Phoenix online. We expect the service market to begin to recover 1. The Q4000 upgrades were completed and the vessel late in 2010, in which case our timing should be right to be returned to the market in March. positioned to participate in the opportunities inherent in a 2. The Well Enhancer, our newest state-of-the-art well recovering services market. intervention vessel, went to work in the fourth quarter. 3. The Caesar, our long awaited deepwater S-lay pipelay We recently announced that we were engaging advisors vessel, was delivered from the shipyard and began transit to assist us with evaluating alternatives for the complete to the Gulf of Mexico at the end of the year. disposition of our oil and gas business. With the new 4. Work progressed on the HP1, our floating production deepwater service assets delivered, and once we are able vessel. to complete a divestment of our oil and gas business, we 5. Work progressed on the Danny and Phoenix oil field will have accomplished the transition to becoming a pure developments. deepwater Contracting Services company and can then focus on growing this core competency. The road has been long Capital spending for the year was managed at a level and certainly hard, but with industry conditions improving, we consistent with cash flow and therefore some project work believe that our goal of positioning Helix as a vibrant growth was deferred into the beginning of 2010. service company focused on the deepwater is the right strategy. SHAREHOLDERS INFORMATION Corporate Headquarters 400 North Sam Houston Parkway East, Suite 400 Houston, TX 77060 Office: 281-618-0400 Fax: 281-618-0500 Common Stock Listing New York Stock Exchange Symbol: HLX Stock Held In “Street Name” The company maintains a direct mailing list to ensure that shareholders with stock held in brokerage accounts receive information on a timely basis. Shareholders wanting to be added to these lists should direct their requests to Investor Relations at the Corporate Headquarters or call 281-618-0400. Stock Transfer Agent Wells Fargo Shareowner Services 161 North Concord Exchange P. O. Box 64854 St. Paul, MN 55164-0854 1-800-468-9716 www.wellsfargo.com/shareownerservices Communications concerning the transfer of shares, lost certificates, duplicate mailings or change of address should be directed to the stock transfer agent. Independent Registered Public Accountants Ernst & Young LLP Houston, TX Website www.HelixESG.com Our website includes a profile of your company, the services we offer and a review of each of our business units. The Investor Relations section enables you to access the most recent quarterly and annual reports as soon as they are issued. All shareholders are invited to participate in the quarterly conference calls with analysts. Conference call announcements will appear under Upcoming Events on the main page; replays of the conference calls are also available by clicking on Audio Archives on the left-hand side of the page. Investor Relations Shareholders, securities analysts or portfolio managers seeking information about Helix Energy Solutions Group, Inc. are welcome to contact Investor Relations at 281-618-0400. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) 5 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2009 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 95-3409686 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 400 North Sam Houston Parkway East Suite 400 77060 Houston, Texas (Zip Code) (Address of principal executive offices) (281) 618-0400 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock (no par value) New York Stock Exchange Securities registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 5 Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes 5 No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 5 Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer 5 Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 5 No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant based on the last reported sales price of the Registrant’s Common Stock on June 30, 2009 was approximately $1.0 billion.