Helix's Q1 Net Income Up to $74.3 Million

Helix Energy Solutions reported first quarter net income of $74.3 million, or $0.79 per diluted share, compared to $55.8 million, or $0.60 per diluted share reported for the first quarter of 2007.

Owen Kratz, President and Chief Executive Officer of Helix, stated, "A few months ago we laid our budget assumptions for 2008. I am pleased to report first quarter was a strong operating quarter for us. Services performed better than our budget assumptions and production rates as well as commodity prices exceeded our budget assumptions. We also executed the first of the budgeted production sales in this quarter with others progressing as planned. "

Financial Highlights

--Revenues: The $54.7 million increase in year-over-year first quarter revenues was driven by increases in revenue from both Oil and Gas production and Contracting Services due primarily to continued market demand in the deepwater and an increase in year-over-year commodity prices.

--Margins: Margins of 27% for the first quarter 2008 were 7 points lower than 34% in the first quarter of 2007 as Cal Dive experienced a seasonal margin decline, the Q4000 was out of service for upgrades, and we experienced a $14 million impairment at our Devil's Island field.

--Sale of Oil and Gas Interests: The Company sold 30% working interests in its Danny Noonan discoveries in two separate transactions for total cash consideration of approximately $165 million, an obligation of the purchaser to pay their 30% share of all related future capital expenditures and an obligation to pay up to an additional $20 million based on reaching production milestones. The first transaction for 20% closed March 31, 2008 and resulted in a gain of $61.1 million in the first quarter. The second transaction for 10% closed on April 23, 2008.

--SG&A: $47.8 million increased $17.2 million over the same period a year ago due primarily to increased overhead to support our growth (particularly Cal Dive) and severance relating to the resignation of our former CEO. Excluding the severance, this level of SG&A was 9% of first quarter revenues, compared to 8% in the year ago quarter.

--Equity in Earnings: $10.9 million is comprised of our share of earnings for the quarter relating to the Marco Polo facility and the Independence Hub facility.

--Income Tax Provision: The Company's effective tax rate for the quarter was 36.6%, compared to the 34% effective rate for last year's first quarter due primarily to provision of deferred taxes relating to Cal Dive's earnings.

--Balance Sheet: Total consolidated net debt as of March 31, 2008 was $1.7 billion. This includes $335 million outstanding under Cal Dive's term loan that was used to fund the cash portion of its acquisition of Horizon Offshore, which loan is non-recourse to Helix. Total consolidated net debt as of March 31, 2008 represents 46% net debt to book capitalization.