Helix Producer 1 FPU, image (c) Robert Almeida/gCaptain
Helix Energy Solutions Group (NYSE: HLX) announced yesterday they are now a pure-play offshore invention and robotics company after having sold off their oil and gas production subsidiary, Energy Resource Technology GOM (ERT), to Houston-based Talos Energy.
A company with a long history in offshore well intervention and commercial diving, Helix established their offshore oil and gas businessin a series of exchanges, taking on wells in the twilight of their production in exchange for taking on the responsibility to plug and abandon them at the end of their life. This catalog of producing fields was expanded in the mid-2000’s with the acquisition of Remington Oil and Gas, adding new exploration to the mix.
This deal is a landmark change for Helix as it provides a significant influx of cash to help reduce debt and focus on the core strategy of their business, offshore well intervention and robotics services.
Cameron Wallace, Marketing Director at Helix comments, “This deal allows us to focus our efforts on our core strengths in the offshore services industry. That focus, combined with the additional capital from the sale, enables Helix to put emphasis on fleet expansion plans that will open new markets, and reinforce our leadership position in others.”
The selling price involves a base purchase price of $610 million plus contingent consideration in the form of overriding royalty interests on ERT’s Wang exploration prospect as well as certain other exploration prospects. In addition, the parties have agreed to adjust the purchase price at closing, upward or downward, depending upon the results of the Wang exploration well.
The estimated value of the transaction is approximately $700 million if the Wang exploration prospect is successful and meets expectations. If the Wang exploration prospect is determined to be unsuccessful, the estimated value of the transaction to Helix is closer to $600 million. ERT is currently drilling the Wang well and expects to evaluate the results in the next few days.
Jefferies & Company, Inc. served as the exclusive financial advisor to Helix in conjunction with the transaction. The transaction has an effective date of December 1, 2012 and is expected to close in the first quarter of 2013, subject to customary closing conditions.
Unlock Exclusive Insights Today!
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.