August 29, 2011 - Helix Energy Solutions Group, Inc., (HLX-NYSE) together with its subsidiaries, operates as an offshore energy company. It provides reservoir development solutions and other contracting services to the energy market, as well as to its oil and gas properties.

The company also offers various production services comprising inspection, repair, and maintenance of production structures, risers, pipelines, and subsea equipment; well intervention; life of field support; and intervention engineering. In addition, it provides reclamation services, such as reclamation and remediation services; plugging and abandonment services; platform salvage and removal services; pipeline abandonment services; and site inspections.

Further, the HLX sells oil and natural gas processing services to oil and natural gas companies. Additionally, it engages in the exploration, development, and production of oil and gas properties located in the Gulf of Mexico. As of December 31, 2010, the company had estimated proved reserves of approximately 376 billion cubic feet equivalent.

It markets to oil and gas companies, oil and pipeline companies, and independent oil and gas producers and suppliers. The company was formerly known as Cal Dive International, Inc. and changed its name to Helix Energy Solutions Group, Inc. in March 2006. Helix Energy Solutions Group, Inc. was incorporated in 1979 and is headquartered in Houston, Texas.

Sales took a dive in 2009 and 2010, going from $2.148 billion in '08 to $1.462 billion in '09, then $1.199 billion last year. Earnings followed, only tanked faster: $2.01 in '08, then 37 cents in '09. In 2010, they bounced back a little to 47 cents. It looks like this year, both revenues and profits will show improvement, then really increase next year.

Earning should pop to $1.29 this year, up from 47 cents last year. That's the consensus from 8 analysts. The range is 77 cents to $1.57. Next year, they're guessing $1.62. For the third quarter, look for 38 cents a share, well above the 26 cents made last year in the third. For the fourth period, expect 32 cents compared to 6 cents last year in the final quarter.

Second quarter results reflect the better business climate. Earnings finished at 39 cents, more than double the 18 cents from last year's second period. Sales in the Oil and Gas segment soared to $172 million. a full $70 million more than last year's second quarter revenues Oil volume jumped by 81% as production rates held steady in the Gulf region. Price per barrel went up 40% to $101.43, but natural gas sales were down in the same period. Also showing weakness was the Contracting Services group.

The third quarter should show strong results (as mentioned above, earnings should be 38 cents vs 26 cents last year) due to full pipeline production coming back on line. During July, scheduled pipeline maintenance led to downtime, but that's over. Pricing, however, has been a little lower than the second quarter, ranging between $90 and $100 a barrel. To further help, the weak showing in Contracting Services has turned with stronger demand building a backlog for this segment. Certain vessels are back cruising the gulf after regulations held them in harbor until they could comply. The growing sales in Europe for trenching vessels, a service offered by HLX's Robotics group, is part of the recent surge in renewable energy markets that will add to the top and bottom lines.

Of course, most of HLX's well being depends on the prices of oil and gas. If they go down, demand for drilling lessens as do production volumes. But there are several new areas that are emerging that should help, no matter where prices go, ones like pipelaying, well services in Southeast Asia, renewable resources and technologies, and the conversion of oil reserves into production assets. To further bolster business, Helix just got permission for one new well in the Gulf and has requested another permit for a new one.

Essential numbers: Market Cap is $1.68 billion. Forward P/E is 9.85. Price to book is 1.20. Book value is $12.68. Operating margin for the last 12 months was 12.83% and Profit margin was 3.28%. Return on assets was 2.97%. Total cash is $414.19 million for $3.91 a share. Total debt is $1.25 billion. Current ratio is 2.19. Beta is an extraordinary 3.12. The stock is up 70.58% in the last 52 weeks. There are 105.94 shares Outstanding with a Float of 98.69 million. Insiders have 8.71% of the stock and Institutions have 83.80% of the Float. There is no dividend.

Helix is coming back. As long as oil and gas prices stay relatively high, earnings will continue to grow. New wells, new products and services as well as new markets should help offset some of the recent weakness in oil prices.

- Company Web site: www.helixesg.com

   Ted Allrich