Offshore energy services provider, Helix Energy Solutions Group, Inc. HLX announced that it has entered into a new multi-year contract with Royal Dutch Shell plc RDS.A to provide well intervention services in the U.S. Gulf of Mexico with the help of Helix Energy’s Q4000.
The Q4000 is a deepwater well intervention semisubmersible which has been working for Shell since 2011 under a Master Service Agreement. The contract has a duration of three years, from 2015 through 2017-end.
Helix Energy, headquartered in Houston, TX, is an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations. The company seeks to align the interests of the producer and contractor by investing in mature offshore oil and gas properties, hub production facilities and proven underdeveloped reserve plays where Helix Energy Solutions adds value by deploying vessels from its diverse contracting fleet.
In recent times, Helix Energy saw its margins and Well Intervention utilization decline. Well Intervention declined 67% in the fourth quarter of 2014 and margins dropped to 8.6%, much below the trailing four-quarter average of 35.7%.
Further, the company’s Q4000 (Well Intervention vessel) was hit by a supply boat in the fourth quarter, which led to a reduced day rate and increased support costs for the company. Helix Energy’s robotics margins suffered as well, dropping to 10% from 21.6% in the sequentially prior quarter.
The company currently carries a Zacks Rank #5 (Strong Sell). Better-ranked players in the energy sector include Sprague Resources LP SRLP and Western Gas Equity Partners LP WGP, both sporting a Zacks Rank #1 (Strong Buy).
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