Helix Updates O&G Divestment Efforts, Mid Year Reserves
Earlier this year, Helix announced the engagement of advisers to evaluate strategic alternatives for a potential divestment of its oil and gas business. The Company remains committed to the pursuit of this objective as it is consistent with its long-term business strategy. While the evaluation process has progressed, the Company believes that based on the situation in the Gulf of Mexico related to the oil spill from the Macondo well, any potential divestment is likely to take longer than was anticipated before the oil spill.
The Company is finalizing its proved reserve estimate for June 30, 2010 in conjunction with its regular mid-year review as well as its evaluation of the Company's oil and gas assets in preparation of any potential divestment of its oil and gas business. In connection with these efforts, the Company has retained independent petroleum reservoir engineers to prepare a mid-year reserve report. The Company believes that the evaluation of mid-year reserves will reflect a significant downward revision in proved reserves mainly related to updated well performance data for its Bushwood field as well as revised field economic assumptions for certain of its other Gulf of Mexico oil and gas properties. The reductions in the estimated volume of proved reserves include certain reclassifications out of the proved reserve category to the probable reserves category at June 30, 2010. The Company expects the final estimated proved reserves to be approximately 400 billion cubic feet of natural gas equivalents.
The Company expects the Securities and Exchange Commission PV-10 value of proved reserves as of June 30, 2010 to approximate $1.3 billion, which is comparable to the SEC PV-10 value at December 31, 2009. The Company cautions that its estimate of the SEC PV-10 value may not be necessarily indicative of the market value of its oil and gas assets.
In connection with the expected downward revision of proved reserves associated with certain of its oil and gas fields, the Company expects to record non-cash, pre-tax impairment charges in the range of $160 million to $180 million.
- Helix Inks Petrobras Deal Offshore Brazil (Feb 11)
- Jurong Shipyard Bags $346M Deal to Build Well Intervention Rig for Helix (Sep 12)
- Helix to Build Additional Newbuild Semisub (Jul 31)