Helix Increases Presence In Gulf Of Mexico Decom Market

Helix Increases Presence In Gulf Of Mexico Decom Market
Helix Energy Solutions has entered into a definitive agreement to acquire Alliance for $120 million cash at closing.

Helix Energy Solutions has entered into a definitive agreement to acquire 100 percent of the equity interests of Alliance for $120 million cash at closing.

Alliance is a Louisiana-based privately held company that provides services in support of the upstream and midstream ‎industries in the Gulf of Mexico shelf, including offshore oil field decommissioning and ‎reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift, and commercial diving services.

The purchase price is equal to $120 million of cash at closing, plus the potential for post-closing earnout consideration payable in 2024, in the event the Alliance business achieves certain financial metrics in 2022 and 2023.

Helix has the option to pay any earnout consideration in cash, Helix stock, or a combination thereof. The agreement contains customary terms and conditions, including representations, warranties, and covenants including buyer-side protections.

The acquisition is expected to close in mid-2022 and is subject to regulatory approvals and other customary conditions.

Helix made note that there was no guarantee that the transaction would be consummated on the terms or timeframe ‎currently contemplated, or at all.

As for the rationale for the acquisition, this aligns with Helix’s energy transition business model by expanding its decommissioning presence in the Gulf of Mexico and advancing the company’s ESG initiatives by supporting end-of-life requirements of oil and gas projects.

The Alliance buy also augments Helix’s decommissioning and life-of-field maintenance service capabilities through the addition of the accompanying shallow water assets, including a fleet of Jones Act-compliant lift boats, offshore supply vessels, a heavy lift derrick barge, and diving vessels as well as plug and abandonment systems, coiled tubing systems, and snubbing units.

With this addition to its portfolio, Helix can further increase its presence in the North American decommissioning market, with published reports forecasting nearly $3 billion of decommissioning expenditures between 2022 and 2025. This also gives Helix the potential to expand into the global market.

“Based on several market and regulatory drivers and our current expectations, we fully believe that the offshore oil and gas decommissioning market will grow significantly in the near term,” said Owen Kratz, Helix’s President and CEO.

“This acquisition complements Helix’s present deepwater abandonment offerings by adding shelf and facility abandonment capabilities and significantly enhances our position as a full-field abandonment services provider, both in the Gulf of Mexico and globally.

“We also see possibilities to expand our opportunities within our existing late-life production business. We are thrilled at the prospect of adding Alliance to the Helix family, and we believe this acquisition is a meaningful step in Helix’s responsible participation in this age of energy transition,” Kratz added.

“This transaction represents the culmination of many years of hard work, as we have grown Alliance from the ground up,” commented Steve Williams, owner of Alliance. “Our recent successes in acquiring and developing businesses and assets to establish Alliance as an offshore shallow water energy services company has led us to Helix, who we see as the industry standard in deepwater energy services. We are excited for the potential combination of Helix and Alliance and the value proposition we can bring to our customers.”

To contact the author, email bojan.lepic@rigzone.com


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