Helix Reports Second Quarter Results

Helix Energy Solutions (NYSE: HLX) reported second quarter net income of $65.8 million, or $0.70 per diluted share, excluding three non-recurring items recorded by its majority owned subsidiary, Cal Dive International, Inc. Including the non-recurring items, Helix reported second quarter net income of $57.7 million, or $0.61 per diluted share.

The non-recurring items recorded by Cal Dive in the second quarter include $11.8 million in non-cash equity losses and a related asset impairment charge in connection with Cal Dive's investment in Offshore Technology Solutions Limited ("OTSL"), a Trinidad and Tobago entity in which Cal Dive owns a 40% minority interest, and a $2.0 million cash settlement, subject to final negotiation of a court-approved settlement agreement, to be paid for a civil claim by the Department of Justice related to the Stolt and Torch acquisitions in 2005. Cal Dive also reported a $1.7 million gain on a sale of a portable saturation diving asset during the second quarter.

                              Summary of Results
           (in thousands, except per share amounts and percentages)

                          Second Quarter    First Quarter     Six Months
                           2007      2006        2007      2007       2006

    Revenues            $410,574  $305,013     $396,055  $806,629   $596,661

    Gross Profit         141,765   131,692      135,615   277,380    233,958
                              35%       43%          34%       34%        39%

    Net Income            57,702    69,139       55,820   113,522    124,528
                              14%       23%          14%       14%        21%

    Diluted Earnings        0.61      0.83         0.60      1.21       1.51
    Per Share

Martin Ferron, President and Chief Executive Officer of Helix, stated, "We expected Q2 earnings to be similar to those reported for Q1 and actually posted an improved result, even after the negative impact of the non-recurring items described above. This improvement was also achieved despite another very busy quarter for marine asset maintenance, with the Intrepid and several key Cal Dive vessels undergoing regulatory drydockings during the period. That maintenance work is now largely behind us, except for the planned upgrade to the Q4000, and we are anticipating a strong second half of the year for Contracting Services.

"In our Oil and Gas business unit we had another very successful quarter with the drill bit, going six for six with exploratory wells. This takes our success record to 12 for 12 for the first half of the year and improves our proven reserve base by around 140 bcfe. On the production front we plan to bring several key shelf development projects onstream in the second half of the year, and our deepwater development projects remain on schedule to boost output next year.

"We have updated the assessment of the key variables that drive our earnings for the year and this will be covered in the conference call tomorrow. Based on our analysis we are comfortable with the present consensus earnings estimate for 2007 of $3.26/share, subject to no further significant deterioration in the natural gas price. We have created very meaningful future value in our deepwater development projects portfolio and, as set out in our initial earnings guidance, we may monetize part of that value, in order to reduce debt and contribute to near term earnings."

    Financial Highlights
     *  Revenues:  The $105.6 million increase in year-over-year second
        quarter revenues was driven primarily by an increase in oil and gas
        sales of $61.0 million due primarily to the production added from the
        acquisition of Remington Oil and Gas Corporation.  The remaining
        increase was due to improvements in contracting services revenues due
        to much better market conditions.
     *  Margins:  35% is eight points less than the year ago quarter due
        primarily to significant out of service days for Cal Dive's vessels in
        regulatory drydocks (373 days in 2Q 2007 vs. 89 days in 2Q 2006) and
        an increased DD&A rate for oil and gas production due to the Remington
     *  SG&A:  $33.4 million increased $6.0 million from the same period a
        year ago due primarily to increased overhead to support our growth.
        This level of SG&A was 8% of second quarter revenues, down from the 9%
        in the year ago quarter.
     *  Equity in Earnings:  Net losses of $4.7 million is comprised of the
        $11.8 million impairment / equity losses in Cal Dive's minority
        interest in OTSL offset by $7.0 million for our share of earnings for
        the quarter of Deepwater Gateway, L.L.C.'s earnings relating to the
        Marco Polo facility and demand fees relating to the Independence Hub
     *  Income Tax Provision:  The Company's effective tax rate for the
        quarter was 35%, compared to 34% for last year's second quarter due
        primarily to the nondeductibility of the OTSL charges and the DOJ
     *  Balance Sheet:  Total consolidated debt as of June 30, 2007 was $1.4
        billion.  This includes $140 million under Cal Dive's revolving
        facility which is non-recourse to Helix.  This represents 43% net debt
        to book capitalization and with $735 million of adjusted EBITDAX
        during the last twelve months, this represents 1.8 times trailing
        twelve month adjusted EBITDAX.