Helix Announces Decommissioning Contract Extension with Trident Energy and other Commercial Updates
- Extension of decommissioning contract with Trident Energy do Brasil Ltda for 12 months
- Six-year charter extensions for Siem Helix vessels
- Extension of Helix Producer I (HPI) contract by one year
- None.
Insights
The extension of Helix Energy Solutions Group's decommissioning contract with Trident Energy do Brasil Ltda is a positive signal for the company's future revenue streams and operational stability. The continuation for an additional 12 months aligns with the improving well intervention market, indicating a potential increase in demand for such services. This could suggest a favorable outlook for Helix's business segment involved in subsea services and well decommissioning, which is often seen as a growth area in the energy sector due to the aging infrastructure in oil and gas fields.
Moreover, the six-year charter extensions for the Siem Helix vessels ensure long-term asset utilization, which is critical for maintaining a steady cash flow and reducing the volatility of earnings. The specific mention of rates being 'in line with the improved well intervention market' implies that Helix is able to command competitive pricing, reinforcing the company's market positioning within the industry.
From a financial perspective, the contract extension and charter renewals provide a clearer visibility into Helix's future earnings, which is an important factor for investors. The extended use of the Helix Producer I (HPI) until June 2025 also underscores the company's ability to retain key contracts, potentially contributing to a more stable and predictable revenue stream. These developments could be seen as a mitigating factor against the inherent risks associated with the cyclical nature of the energy sector.
It is also worth noting that long-term contracts, such as the ones Helix has secured, generally provide a buffer against short-term market fluctuations, enabling the company to plan and allocate resources more effectively. This strategic positioning might lead to improved investor confidence and could be reflected in the company's stock performance over time.
The extension of contracts for decommissioning services in the Campos Basin, offshore Brazil, is indicative of the strategic importance of the region for oil and gas operations. The Campos Basin is a prolific hydrocarbon-producing region and the demand for decommissioning services is expected to grow as assets reach the end of their productive life. Helix's ability to provide fully integrated plug and abandonment well services, in partnership with SLB, highlights its integrated service model, which could offer a competitive advantage in winning similar contracts in the future.
The mention of the Helix Producer I's capabilities in producing and exporting hydrocarbons suggests that Helix is not only involved in decommissioning but also in the production phase. This diversification of services can help cushion the company from downturns in specific market segments and allows for a more resilient business model in the volatile energy market.
Helix and Siem Offshore have signed six-year charter extensions for both the Siem Helix vessels, with the Siem Helix 1 term extending through December 2030 and the Siem Helix 2 term extending through December 2031. The Siem Helix vessels are purpose-built advanced well intervention vessels capable of performing a wide range of subsea services including production enhancement, well decommissioning, subsea installation, offshore crane and Remotely Operated Vehicle (ROV) operations, offshore construction and emergency response.
The Helix Producer I (HPI) contract has also been extended by one year, to June 1, 2025. Since 2016, the HPI, a ship-shaped dynamically positioned (DP2) floating production unit, has been located at Green Canyon Block 237 producing oil and gas through the existing Phoenix Field subsea infrastructure. The vessel is designed to produce hydrocarbons and export to shore via pipeline or tanker.
Scotty Sparks, Helix’s Executive Vice President and Chief Operating Officer, stated, “We are pleased to announce that Helix has successfully executed these contract extensions, reflective of improving market conditions and increased demand for Helix’s assets and services.”
About Helix
Helix Energy Solutions Group, Inc., headquartered in
For more information about the Subsea Services Alliance, please visit its website at www.subseaservicesalliance.com.
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 “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any statements regarding the current market or demand for our services; our ability to enter into, renew and/or perform commercial contracts and/or charter agreements; our current work continuing; any impact on our financial and operating results and estimates; any statements regarding our strategy; any statements regarding our business model or the global energy transition; and any statements of assumptions underlying any of the foregoing. The forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that could cause results to differ materially from those in the forward-looking statements, including but not limited to the terms of the charters, contracts, and/or extensions thereof; actions by governments, regulatory authorities, customers, suppliers and partners; market conditions; results from acquired properties; demand for our services; the performance of contracts by suppliers, customers and partners; operating hazards and delays, which includes delays in delivery, chartering or customer acceptance of assets or terms of their acceptance; our ultimate ability to realize current backlog; employee management issues; complexities of global political and economic developments; geologic risks; volatility of oil and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including Helix’s most recently filed Annual Report on Form 10-K and in Helix’s other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements, which speak only as of their respective dates, except as required by the securities laws.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240206228147/en/
Erik Staffeldt, Executive Vice President and CFO
Ph: 281-618-0465
email: estaffeldt@helixesg.com
Source: Helix Energy Solutions Group, Inc.
FAQ
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